A highly streamlined customs arrangement

The UK proposes two broad approaches to its future customs relationship with the EU in its August 2017 paper on future customs arrangements. They were

  • Highly streamlined customs arrangement.
  • A new customs partnership.

Outside the EU Customs Union, the UK proposes to fix its own customs arrangements and laws. International rules require the extension of customs processes to all UK trade with EU members in the same way as applies to trade with third-party countries.

The processes would require  business,

  • declare goods for entry on import
  • declare goods on export
  • make returns and documentation to HMRC including declarations, safety and security information, and licenses
  • demonstrate the origin of goods where necessary, particularly if so required by terms of the trade agreement with the EU
  • enable HMRC to verify the declaration and that it corresponds to the goods arriving/departing
  • ensure the customs duties, and import VAT is paid
  • allow HMRC to intervene where necessary.

Under this arrangement outside the customs union, the UK would seek to negotiate trade facilitation with the EU and implement unilateral improvements to the existing regime to make trade with EU and the rest of the world easier.

While the UK government has looked at precedents around the world, it is not seeking to replicate another country’s model and will pursue the approach that works best for the UK

Simplification Proposals

The UK will look at to simplify requirements for moving goods across the border including

  • the negotiation of a continued waiver for the requirement to submit entry and exit declarations for goods being moved between UK and EU
  • through  membership of the common transit convention, allow goods to transit to the rest of the world through the EU

The UK would seek to spare options to reduce pressure and risk of delays including

  • mutual recognition of authorised economic operators.
  • bilateral implementation of technology-based solutions for roll on roll off comprising pre-arrival of notification of consignments on a port IT system linked to customs declarations and vehicle registration numbers so that vehicles are not required to stop at the border.

The UK will seek to negotiate customs cooperation, mutual assistance and data sharing in line with existing cooperation in order to reduce revenue and security risks, improve targeting of inspections and reduced delays for legitimate traders.

  • The UK seeks to reduce the time and cost of complying with customs administrative requirements by exploring the viability of unilateral measures including
  • simplification for business such as self-assessment to allow traders to calculate their own duties and aggregate their customs returns
  • speeding up some authorisation processes, for example through increased automation and better use of data
  • in the longer term streamlining authorisation requirements to reduce complexity in relation to existing duties, suspensions, and reliefs
  • making existing domestic simplified procedures easier for traders to access in a way compatible with UK’s international obligations.

The UK will continue to work, including with businesses, to identify further facilitation.

The UK government pledges to seek to ensure that individuals travelling to the UK from the EU and vice versa will continue to travel with goods for personal use, as freely and smoothly as prior to Brexit and that free movement of small parcels continues to operate effectively.

New Customs Partnership

The alternative proposal proposed is a new customs partnership with the EU The UK government believes that the UK and EU should jointly consider innovative approaches that could support UK / EU trade outside of customs union arrangement while removing the need for customs processes at the border.

One approach, which the UK wishes to explore further with the EU would  involve the UK acting in partnership with the EU to operate a regime for imports that aligns precisely with EU’s external customs border for  goods that will be consumed in the EU market, even if they are part of a supply chain in the UK first. The UK would apply the same tariff and provide the same treatment for rules of origin for those goods arriving in the UK and destined for the EU

This approach was proposed to remove the need to, to reduce customs process between the UK and EU so that all goods moving between UK and EU would be treated as at present for customs purposes. The UK would be in a position to apply its own tariff and trade policy to UK export and import from other countries, destined for the UK market.

The would require a robust enforcement mechanism which would ensure that goods which had not complied with the EU’s trade policies stayed in the UK. This would involve, for instance, a tracking mechanism whereby imports in UK were tracked until they reached an end user or a repayment mechanism when imports to the UK paid the higher of the UK’ or EU’s tariff rates, to claim a refund for the difference between the two rates when the goods were sold to an end user in the country charging the lower tariffs.

Business in supply chains would need to be able to track goods or pass the ability to claim a repayment along their supply chain in order to benefit.

This above approach is in addition to and is not intended to substitute for further approaches which seek to remove a hard border on the island of Ireland.

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