A couple of updates from the last couple of weeks.

There has been some surprise at the UK Government decision not to seek to be members of the EU’s “safety and security zone” as part of the ongoing trade negotiations. Many trade bodies are pushing for this and many believed this would be a logical common sense move to avoid unnecessary burden on carriers and trade. Whether the UK government is just in negotiation posturing mode remains to be seen.

Without being a member of the zone, carriers (or hauliers in the case of RoRo traffic) would need to lodge safety and security declarations before the goods arrived at the border of the importing customs territory; for short sea and rail journeys the deadline is just 2 hours prior to arrival and for road 1 hour. As part of the withdrawal agreement this would also apply to traffic between mainland UK and Northern Ireland. Whilst it is true the data required is less than for a full customs declaration it is still data that the short sea carriers or rail operators do not necessarily collect today.

The trade is pushing for a UK waiver, but even if the UK were to unilaterally decide to waive the need for safety & security declarations on imports this would benefit EU exporters and hauliers more than it would UK companies, with the requirement for imports into Europe still requiring security notifications. Whilst the lodging of a full customs declaration or transit movement prior to arrival should technically waive the need for a safety and security declaration this is not guaranteed (especially in the case of Transit where not all Member States are able to use the safety and security data even if it is declared).

Companies should therefore be investigating ways they can capture this data and submit it to the national authorities, not forgetting that a UK company will need an EU EORI number to submit an EU ENS declaration and an EU company will need a UK EORI number to submit a UK EORI.

On a positive side, the UK has opened its consultation on Freeports. Closer reading of the proposal would sound very similar to existing procedures with a mix of customs warehousing / inward processing, entry in the declarants records (with C21s used to move between Port and Freeport) and simplified procedures with the main difference that the authorisation and systems employed are the responsibility of the person operating the Freeport rather than the individual business inside it (although they will still probably need some form of simple authorisation). Whether the current port inventory systems would want to expand their services into duty management and customs warehousing remains to be seen. This type of functionality is usually outside of their normal domain expertise and whether customs requirements would be high enough to fit the normal type of consignment flow of a maritime or airport, rather than the SKU level control a Freeport would require to allow for processing and sub consignment removals. The main difference with freeports, apart from their centralised record keeping system, is that businesses could take advantage of other tax incentives or regulatory relaxation designed to promote trade or investment. Unfortunately as the proposal mentions a competitive bidding process the number of freeports is likely to be limited, meaning individual business would continue to use existing procedures and simplification, including temporary storage, if no long term storage or processing / picking is required.

On the good news excise duty on alcohol products has been frozen in the UK 2020 budget and there is also a commitment to introduce VAT Postponed Accounting From 1 January 2021 on all imports of goods, including those from the EU.

For further information and the best way to keep up-to-date on Brexit visit our Brexit Resource Center.

Written by Martin Meacock

Director, Product Management