UK Government vision for how trade in movement of goods could work across the Northern Ireland and Ireland border: what can businesses do now to prepare?

18 August 2017

On 16 August, the UK Government published two papers on its vision for how the new border with the EU and the specific border between Northern Ireland and Ireland could be made as seamless and frictionless as possible.  We have discussed the wider EU vision paper in our blog yesterday. Today, we focus purely on the customs border vision in the Northern Ireland and Ireland position paper.

The current Common Travel Area provides for free movement of people across the Irish border. But this does not extend to goods ( personal, own use or commercial). It is widely acknowledged that any form of hard border should be avoided and the UK Government is seeking to enable individuals travelling across the border to continue to be able to move personal goods or goods for their own consumption freely across the border.  But as high volumes of agri-food products cross the border daily let's explore their vision for commercial movements of goods and what you can do now to ensure business continuity.

The UK Government is seeking a flexible and imaginative approach from the EU that goes beyond current EU frameworks for the Irish border.   The UK would like to explore core principles with the EU for Irish customs border management, against which proposals can be tested in the future; the negotiations should focus on the most critical issues to deliver a seamless and frictionless border i.e. customs arrangements, checks and processes on particular goods and phytosanitary (checks) measures for agri-food.

The UK has expressed nine key principles and criteria, seven of which directly affect goods movements across the border:

  • Avoid having a physical border
  • Need to protect everyday movements of individuals, smaller traders and farmers movements of goods and the agri-food industry
  • Frictionless border, no security and safety declarations, no food standards checks or intellectual property checks at the border
  • Transit of goods across the UK from Ireland to mainland Europe should be possible - using community transit principles
  • Protect the integrity of EU Customs Union, Single Market and new independent UK Customs regime by finding flexible and imaginative solutions that go beyond previous precedents
  • Recognise the importance of trade between Ireland and the UK, aiming to avoid economic harm to Ireland
  • Agree a time limited interim period for new arrangements

Recognising the principles above, this paper builds upon the vision for the streamlined border provided in the EU paper discussed previously, whilst recognising additional measures would be needed for the Irish border.  Of particular note is a two tier system: an exemption for smaller traders from having to submit any customs declarations and for larger traders (definition currently unknown), under a trusted trader program, (Authorised Economic Operator regime) who could submit reduced data sets for customs declarations, reporting and paying the customs duty on a more periodic basis.  Alternatively, if a new customs partnership could be reached with the EU, then no customs processes would be required and goods could move across the border freely as they do now.

These new models would require a robust enforcement mechanism which would include advanced tracking mechanisms and repayment processes which will inevitably result in additional costs for business and governments alike.  Our advice to business from our previous blog remains:

  • understand the potential impact of BREXIT on your cross-border trade,
  • explore AEO accreditation,
  • evaluate your  customs data and systems: and
  • consult with the UK and Irish Governments on the potential options described so far.

The strong desire of the UK Government not to return to a hard goods border and,  as far as possible, to maintain the status quo for goods moving between Ireland and the UK will be widely welcomed.

 

Matthew Clark | Head of Customs, Excise & International Trade
Profile Email | +44 ( 0) 77 1833 9388

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