How Will Brexit Affect Our Borders?

In: Brexit
17th January 2020

Actions to take ahead of January 31

Transition Period
SUMMARY: No changes expected during transition period. Check out BCC’s Business Brexit Checklist for information on possible longer-term changes.

During the transition period it would be business as usual for customs arrangements, declarations and procedures. There would be no change in the way customs operates and no new border requirements. There would be no customs or regulatory border between the UK and the EU. As the UK would still de facto be in the Single Market, no paperwork or checks would be required for trade with the EU27 countries.

Post Transition
After the transition period, the UK would no longer be a member of the EU’s customs union and the Single Market. This means there will be a customs border between the UK and the EU. UK businesses would no longer be able to circulate goods freely throughout the EU and vice versa. The UK and the EU would be required to apply the same customs rules to goods moving between the UK and the EU, as they would to goods coming from, for example, China or the USA. The only exception to that would be if the UK and the EU signed a free trade agreement (FTA).

By default, full customs formalities, forms and checks would be required for goods traded between the UK and the EU. Companies importing from the EU would need to provide a range of customs information including a commodity code of the product they are importing, its customs value and country of origin. Similar information would be required when making an export declaration. Same procedures will be required in the EU for goods imported from the UK.

Pre-arrival notifications known as entry/exit summary declarations or safety and security declarations would also normally be required before the goods arrive in the UK or the EU. These are normally submitted by the carrier, not the trader. Exit/entry declarations are different to customs declarations.

They are submitted before goods are imported/exported as a pre-arrival/ pre-departure notification. This allows authorities to control what’s moving across borders from a safety and security perspective. This information is mainly used for risk analysis and not to calculate the amount of duties due or apply other trade policy measures as in the case of customs declarations. For imports, this means submitting the notification up to two hours before the arrival of the goods (the deadline changes depending on the mode of transport used). On export, it is usually done at the same time when submitting a customs export declaration. The procedure here is less strict as the goods are leaving the territory.

As part of the transitional procedures in the event of a no-deal scenario, the UK Government announced a gradual phase-in of the entry/exit declarations. The requirement has been temporarily waved for six months for goods imported from the EU. It is uncertain whether similar simplifications would be available after the end of the transition period.

Customs declarations would also be required. They would be identical to the customs declarations currently used for exports and imports to all non-EU countries. It is uncertain whether the UK Government would introduce any simplifications on the UK side of the border. Back in February 2019, the UK Government set out a programme of simplifications for customs formalities for goods imported into the UK from the EU under the no-deal scenario. UK-established companies trading via roll-on-roll-off locations were eligible to register for Temporary Simplified Procedures (TSPs). These simplifications would have allowed registered companies to provide only a small amount of data at the point of import into the UK and defer the payment of customs duties and submission of full import declarations.

Border checks and inspections would normally take place for some shipments on both sides of the border. For certain types of goods, additional requirements would apply. Products of animal origin, plants and plant products as well as some other food of non-animal origin would be subject to safety and phyto-sanitary (SPS) checks. Licences, requirements, permits and other checks will apply to other products, such as chemicals, medicine and controlled goods.

There would also be changes in regard to the movement of excise goods, with the Excise Movement Control System (ECMS) no longer being used to control suspended movements between the UK and the EU. However, it will continue to be used for moving excise goods within the EU. The UK will implement its own version of EMCS. Future UK excise duties or measures have not yet been announced.

The type of customs formalities and inspections on the EU/UK border will to a certain extent depend on what type of arrangement the UK will have with the EU following the transition period. The revised Political Declaration states that towards the end of the transition period, the UK would expect to sign a comprehensive free trade agreement (FTA) with the EU. It refers to an ‘ambitious, broad, deep and flexible partnership across trade and economic cooperation with a comprehensive and balanced Free Trade Agreement at its core’.

If an FTA is negotiated between the UK and the EU, rules of origin would normally come into force. These are conditions that goods need to fulfil in order to be able to profit from preferential tariffs under a trade deal. Origin certification would be required adding to the amount of paperwork and formalities on the border.

Separate provisions would apply to Northern Ireland. After the transition period, The Protocol on Ireland/Northern Ireland (the Protocol) will apply. Northern Ireland would stay in the UK’s customs territory but would at the same time continue to apply the EU’s customs rules, tariffs, quotas and, partially, the EU Single Market rules. This means that NI would continue to apply the EU’s tariffs as external tariffs and the Union Customs Code (UCC) rules. As a result, there would be no tariffs, charges or restrictions on trade between NI and ROI. However, the proposal creates a de facto customs and regulatory border in the Irish Sea between NI and GB. It is understood that NI businesses would have tariff-free access to both the EU and GB markets.

There will also be a ‘consent mechanism’, with the Northern Ireland assembly given an opportunity to vote every four years on whether it wants this set of arrangements to continue. Where the NI assembly votes by a majority to continue to apply the terms of the Protocol, it will continue to apply for a further 4 years. Where the decision has cross-community support, it will continue to apply for a further 8 years. If the Assembly votes to exit the Protocol, it will cease to apply 2 years after the end of the relevant 4-year period.

It is uncertain what customs formalities and checks would be required for goods moving between NI and GB and the other way around. Article 6 of the proposed deal clarifies that nothing should prevent unfettered market access for goods moving from Northern Ireland to the rest of the UK. However, as NI will in effect be the EU’s external border and there might be tariffs in place on some goods as well as regulatory differences, it seems clear that at least some customs formalities would be required. In addition, the UCC would continue to apply in NI and therefore standard provisions for import and export formalities should apply. This will be negotiated by the Joint Committee during the transition period. However, it is likely that both GB and NI exporters/importers would be required to submit additional paperwork.

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