Brexit and the Customs Union

A Customs Update on Brexit

Keith Robe

Senior Customs Adviser

North East England Chamber of Commerce

Brexit and the Customs UnionThe UK is seeking;

• A “highly streamlined customs arrangement”. This proposal would involve a customs border between the UK and the EU but seek to make it as invisible as possible — and try to cut down or eliminate waiting times

• A new customs partnership with the EU, aligning our approach to the customs border in a way that removes the need for a UK-EU customs border and allows us to forge new trade relationships with our partners in Europe and around the world’

• Frictionless as possible trade

Mrs May’s Mansion House Speech

“It would use technologies such as high-tech sensors and online form-filling to reduce the need for physical customs checks. It would also seek to expand an existing “trusted trader” status, which allows qualifying companies to cut down on inspections and be cleared faster at customs.”

In the UK and across the EU the “trusted trader” is Authorised Economic Operator (AEO) status

Brexit and the Customs Union

Future customs arrangements (15th August 2017)

• A Future Partnership Paper

Customs Bill – White Paper (9th October 2017)

• legislating for the UK’s future customs, VAT and excise regimes

Taxation (Cross-Border Trade) Bill

• introduced in the House of Commons on 20 November 2017 (Bill 128)

The Bill will allow the government to create a standalone Customs regime

The Authorised Economic Operator (AEO) programme

• The AEO programme is based on the WCO SAFE Framework and provides a workable solution to

improve the security of international supply chains. It addresses the risks to those supply chains

without obstructing the flow of goods across customs borders.

• The volume of international trade is increasing year on year so there is an economic need to improve

efficiency and reduce the costs of international trade. The AEO programme provides facilitation and

benefits to businesses who meet the criteria so allowing custom's resources to target specific risk

areas.

• Customs authorities issue authorisations to traders who can show that they meet the criteria.

• If a trader holds an AEO authorisation this indicates that they have efficient and compliant

customs controls and procedures.

• AEO authorisation may also indicate the trader operates within a secure supply chain.

What is an Authorised Economic Operator (AEO)?

“An Internationally recognised quality mark which indicates that a business operates within a secure supply chain and their internal controls and procedures are efficient and compliant”

A Trusted Trader

• Qualifying criteria

• Record of compliance with customs and taxation

• Satisfactory system of managing commercial and transport records

• Proven solvency

• Practical standards of competence or professional qualifications

• Security & Safety standards

Types of business that can apply for AEO

Any business can apply for AEO status as long as they are involved in the international supply

chain. Here are some examples.

Manufacturers – who want to ensure a safe and secure manufacturing process for their products exported to third countries.

Exporters – persons on whose behalf the export declarations are made.

Freight forwarders – who organise the transport of goods on behalf of an exporter, importer or other party.

Warehouse keepers and other storage facility operators – persons authorised to operate a customs warehouse or a

person operating a temporary storage facility, or free zone facilities.

Customs agents – a customs agent/representative acting either on behalf of a person who is involved in customs related business

activities or in the agent's own name.

Carriers – the person who actually transports the goods or who operates the means of transport.

Importers – operators on whose behalf an import declaration is made.

Others – for example, terminal operators, stevedores and cargo packers and others not covered by the previous categories.

AEO and the Union Customs Code (UCC)

• Two types outlined in UCC:

Holding both is equivalent of current AEOF status

AEOCCustoms

Simplifications

AEOSSecurity &

Safety

Authorised Economic Operator

The process of applying for AEO can be quite lengthy, often daunting and also time consuming, so with this in mind the North East England Chamber of Commerce has a number of commercial offers around assisting businesses to achieve AEO status including;

• Comprehensive support in the form of 1-2-1 visits, advice, assistance and suggestions with the aim of working towards the final goal of being able to submit AEOS and/or AEOF applications, and to undergo the HMRC AEO audit process.

• Ad-Hoc support on a day basis for those businesses going through the process themselves but requiring some support and advice

If you are interested in this service and would like to find out more, please email Jacqui Tulip Jacqui.Tulip@neechamber.co.uk

or contact Jacqui on 07887622725.

Brexit and the Customs Union

Current imports and exports will be impacted by the outcome of any UK/EU trade agreement

• World Trade Organisation duty rates

• Most Favoured Nation (MFN) rates

Intra-EU movements will become imports and exports with a requirement for customs formalities

• Customs declarations required

• Duty and VAT applicable

Brexit toolkit;

http://www.brexittoolkit.co.uk/

Brexit and the Customs UnionCustoms Special Procedures

• Inward Processing - allows businesses to obtain relief from customs duties and import VAT on goods imported from outside the EU to be processed and exported outside of the EU

• Customs Warehousing - can benefit traders who import goods because it offers a storage facility that delays duty and/or import VAT payments until the goods leave the customs warehousing procedure

• End-Use - can assist certain industries and trades by providing favourable rates of duty on certain imported goods provided they are put to a prescribed use

• Entry in Declarants Records - allows you to enter goods to a customs procedure without the need to provide a full customs declaration at the point of release

• Guarantees/waivers - a guarantee is required if you want to hold a customs authorisation that defers or suspends the payment of duty. Reductions/waivers subject to meeting AEO criteria

Other possible facilitations

• Freeports

• Self Assessment

AEO is the major platform for facilitation and can provide;

• Compliant & trustworthy economic operator status with enhanced reputation & image

• Reduced risk rating with HMRC resulting in reduced physical & documentary checks

• Fast stream when applying for Special Procedures

• Quick release of intra-EU goods post Brexit?

• Preferential treatment for global import/export via Mutual recognition (AEOS)

• Waiver or reduction of guarantees for Duty in suspense and Authorisations with considerable financial implications

Brexit and the Customs Union

Thank you !