Bill Jamieson Customs apocalypse?

CommeNT

BILLJAMIESON | Executive Editor of The Scotsman

Customs apocalypse?

New systems could actually make things easier.

OF all the scare stories that have chilled UK exporters to the EU, arguably the most bloodcurdling have been warnings of a customs gridlock at key ports such as Dover. The introduction of customs checks could bring gridlock to the south-east of England, with lorries queueing for up to 30 miles in Kent to get across the channel, senior transport industry figures have warned.

Short of cutting into the famous Cliffs of Dover, the busy cargo port has no room to expand to accommodate paperwork checks for the 2.6m trucks that pass through the port every year.

As if this prospect was not scary enough, drinks industry chiefs have weighed in with dire prognostications of a massive wine bottleneck at UK ports.

The Wine and Spirit Trade Association has warned that if Brexit negotiations do not reach a deal on frictionless borders, gridlock will become commonplace at ports and encourage the resurgence of alcohol smugglers.

It predicts that Brexit red tape will bring customs to a standstill and cause key ports to be hit with delays.

Around 1.8 billion bottles of wine are imported to Britain each year. Of those, 55 per cent come from the EU, according to the WSTA.

While imports from, and exports to, countries from outside the European Union are subject to customs controls, goods from the EU are free to be moved on with no extra checks. When the UK leaves the customs union, it could mean more than double the volume of cargo that would be subject to inspection.

As for the bigger picture, Eurotunnel, which caters for another 1.6m lorries a year at its Euroshuttle transporter a few miles inland, is facing similar problems.

John Keefe, its spokesman, told CityAM’s Rebecca Smith that the problem for business is not just the prospect of tariffs in a new customs regime but the disruption to the free flow of goods. “There are no warehouses any more, everything is about ‘just in time’,” says Keefe. And a bottleneck in Dover would affect businesses from the car industry in the Midlands to farmers in Wales and fisheries in Scotland. “If you are looking at stopping trucks, you are looking at stopping the economy.”

Michael Lux, a customs trade lawyer, said the paperwork alone was going to add administration time to businesses, with all cargo required to have a customs licence or ‘export declaration’ form.

Asked by CityAM if the UK would be ready for a reintroduction of customs in two years, Lux replied: “You make me laugh. You will need at least double the number of customs officials than you have now. They will need to be recruited and trained and this takes time.”

Nonsense

However, not all business chiefs go along with the ‘chaos at Dover’ headlines – and there are ways in which this could be avoided. John Longworth, former director general of the British Chambers of Commerce, describes the ‘apocalyptic prediction’ as ‘complete nonsense’, exposing little knowledge of how customs procedures actually work.

His report, ‘Brexit and a Future UK Customs System: A Blueprint for Frictionless Trade’ just published by Leave Means Leave, attacks the notion that Dover would be clogged up.

It sets out how Britain’s exit from the customs union is a huge opportunity for Britain to become a more effective force for trade when we leave the EU. “Exit,” he argues, “fits very well with a vision for a post-Brexit Britain as a truly enterprise economy and a free-trading nation.”

If customs procedures are to continue as smoothly as possible, the government must ensure that relevant procedures are in place in advance of Britain’s formal exit from the EU.

A vital part of future customs clearance lies in utilising technology to create a frictionless, virtual border to ensure that trade can continue without undue obstacles. This will enable vehicles to pass through ports at ease.

To remove the need for UK customs clearance on goods which will be processed and then shipped outside the UK, the report recommends creating an Export Processing Zone which would serve as a Free Trade Zone or free port.

The report recommends allowing businesses with Authorised Economic Operators (AEO) status to complete self-assessment on customs duties and other import charges themselves, which would support the virtual border concept and work to speed up the current customs declaration process.

Customs clearance outside of the UK can often be time consuming, particularly for traders who have not got AEO status. To tackle this, the report recommends a trusted third party such as the Chambers of Commerce overseeing a new Trusted Trader accreditation process. This would relieve a significant strain on businesses – particularly on SMEs.

The report also proposes a new UK Customs Code to change several elements of the existing Union Customs Code. This would help to simplify cross-border business for UK firms, lower costs, reduce regulatory burdens and support businesses.

“With robust and long-standing systems in place for aspects such as export documentation, as well as the opportunity to streamline customs procedures on our own terms, the government can immediately implement several procedures to facilitate our trade with the EU and the rest of the world.” Failure here would truly be scary – but can be avoided. n