The government is to introduce customs controls on goods entering Great Britain from the EU in three phases from the start of 2021, Cabinet minister Michael Gove confirmed Friday 12 June.
The move follows lobbying by sectors such as pharmaceutical and agriculture about the potential for import checks to compound the economic impact of coronavirus.
"This flexible and pragmatic approach will give industry the necessary time to make arrangements", the government said today.
The decision reverses the government’s announcement, made in February, that cross-border traders in the EU and Great Britain would have to submit customs declarations at the end of the transition period.
There is, however, still the likelihood of checks on goods going from the UK into the EU from 1 January 2021.
Three phases
Instead of full checks from 1 January 2021, a staged approach to customs declarations and checks will be introduced at Great Britain's main entry points for imports from the EU – regardless of whether the government strikes a trade deal with the EU by the end of this year.
Phase 1: from January 2021
Traders importing standard goods, covering everything from clothes to electronics, will need to prepare for basic customs requirements, such as keeping sufficient records of imported goods, and will have up to six months to complete customs declarations.
While tariffs will need to be paid on all imports, tariff payments can be deferred until the customs declaration has been made.
There will be checks on controlled goods like alcohol and tobacco.
Businesses will also need to consider how they account for VAT on imported goods.
There will also be physical checks at the point of destination or other approved premises on all high risk live animals and plants.
Phase 2: from April 2021
All products of animal origin (POAO) – for example meat, pet food, honey, milk or egg products – and all regulated plants and plant products will also require pre-notification and the relevant health documentation.
Phase 3: from July 2021
Traders moving all goods will have to make declarations at the point of importation and pay relevant tariffs.
Full safety and security declarations will be required, while for SPS commodities there will be an increase in physical checks and the taking of samples: checks for animals, plants and their products will now take place at GB Border Control Posts.
THE DETAILS
Recognising the impact of coronavirus on businesses’ ability to prepare, and following the announcement in February that the UK would implement full border controls on imports coming into GB from the EU, the UK has taken the decision to introduce the new border controls in three stages up until 1 July 2021. This flexible and pragmatic approach will give industry extra time to make necessary arrangements. The stages are:
• From January 2021: Traders importing standard goods, covering everything from clothes to electronics, will need to prepare for basic customs requirements, such as keeping sufficient records of imported goods, and will have up to six months to complete customs declarations. While tariffs will need to be paid on all imports, payments can be deferred until the customs declaration has been made. There will be checks on controlled goods like alcohol and tobacco. Businesses will also need to consider how they account for VAT on imported goods. There will also be physical checks at the point of destination or other approved premises on all high risk live animals and plants.
• From April 2021: All products of animal origin (POAO) – for example meat, pet food, honey, milk or egg products – and all regulated plants and plant products will also require pre-notification and the relevant health documentation.
• From July 2021: Traders moving all goods will have to make declarations at the point of importation and pay relevant tariffs. Full Safety and Security declarations will be required, while for SPS commodities there will be an increase in physical checks and the taking of samples: checks for animals, plants and their products will now take place at GB Border Control Posts.
A new £50million support package will boost the capacity of the customs intermediary sector - including customs brokers, freight forwarders and express parcel operators - providing businesses with further support ahead of the new processes taking effect in July 2021. This funding will support intermediaries with recruitment, training and supplying IT equipment to help handle customs declarations. Rules will also be changed to remove barriers for intermediaries taking on new clients.
In total, the Government has now provided £84m to grow the customs intermediary sector to encompass EU trade after 2020.
Additionally, the Government has committed to building new border facilities in GB for carrying out required checks, such as customs compliance, transit, and Sanitary and Phytosanitary (SPS) checks, as well as providing targeted support to ports to build new infrastructure. Where there is no space at ports for new infrastructure, the Government will build new inland sites where these checks and other activities will take place. The Government is consulting with ports across the UK to agree what infrastructure is required.
From January 2021
Traders importing standard goods will need to prepare for basic customs requirements and will have up to six months to submit customs declarations to HMRC.
While tariffs will need to be paid on all imports from Day One, payments can be deferred until the customs declaration has been made, giving traders time to adjust to the new requirements. Safety and Security declarations will not be required for six months for all goods. Traders will, however, need to consider some other processes, such as how they will account for import VAT.
Traders moving controlled goods such as tobacco and toxic chemicals into GB will be required to complete a full customs declaration when the goods enter GB, in line with the requirements for goods moving into GB from the Rest of the World.
All traders importing live animals and high-risk plants and plant products will be required to have pre-notification and health documentation from the outset. Imports of high-risk animal by-products (ABP) will also need pre-notification. Documentary checks will be carried out remotely, and physical checks of high-risk goods will take place at destination or other authorised premises.
From April 2021
All products of animal origin (POAO) – for example meat, pet food, honey, milk or egg products – and all regulated plants and plant products will also require pre-notification and the relevant health documentation.
From July 2021
Traders moving all goods will have to make full declarations and pay tariffs at the point of importation. Full Safety and Security declarations will be introduced, while for SPS commodities there will be an increase in physical checks and the taking of samples: checks for animals, plants and their products will now take place at GB Border Control Posts.
Training still required
Marco Forgione, director general of the Institute of Export & International Trade, said that “any move to ease the potential delays at ports is to be welcomed”.
However, he added that:
"...it is essential that companies use the time now to acquire the skills and knowledge on customs declarations. Whether it is on 1 January or 1 June next year, companies need to be ready for customs requirements on both sides of the border for all trade with EU."
‘No grace period’ from EU for customs around UK exports
The EU will impose full customs controls and checks on UK goods from the start of 2021, according to Bloomberg.
Speaking on a Chatham House webinar on Thursday 18 June, the EU’s ambassador to the UK said that the bloc won’t reciprocate the UK’s six-month grace period for traders when the transition period ends. Joao Vale de Almeida said that the EU would be `forcible and systematic’ in defending the single market from 1 January 2021.
With thanks to J Mark Rowbotham FCILT - Portcullis for his input.