The UK’s Customs options

Despite the Home Secretary’s protestations, the government has proposed two options for the UK’s Customs relationship with the European Union post-Brexit.

Partnership
In this scenario the UK would apply EU regulations and tariffs on imports from outside the EU, that are intended for circulation in the Union.

So when goods arrive at UK ports and airports en-route to the EU after Brexit, HMCR would collect the taxes due on behalf of Brussels.

The government last year suggested that new IT systems could be used to track whether goods end up in the UK or cross into the EU, with tariffs charged accordingly.

A less attractive alternative is that importers would pay whichever tariff rate (EU or UK) was higher, and then claim a potential refund once goods reached their final destination.Brexit5

Logically, the EU would have to put the same system in place for goods heading from the EU to the UK, which would mean a lot of additional work in big ports like Calais and Rotterdam.

The government acknowledges that the proposal is both unprecedented and untested and would take a long time to set up such a system.

Brussels are sceptical and have described the proposal as “magical thinking”.

Supporters say it would remove the need for customs processes at the UK-EU border, but would still allow the UK to negotiate its own trade deals around the world.

Brexit hardliners fear it would mean the UK staying in the customs union by default.

Facilitation
Maximum facilitation aims to create as frictionless a Customs border as possible, by employing new technologies including, controversially, some that are still being developed.

Supporters say that automation would streamline procedures and remove the need for physical Customs checks.

It would build on established schemes like authorised economic operators (AEO) and the trusted trader regimes, to introduce unilateral improvements to the UK’s customs regime, to make trade with the EU and the rest of the world easier.

As with the Partnership option, Maximum Facilitation would require the EU to implement equivalent arrangements at its borders. Even if the EU were to consider the option acceptable it could take years to introduce some of the technology needed.

In addition, there are concerns about the Irish border and the risk of smuggling.

Supporters of Brexit tend to prefer this option because they see it as a cleaner break with the European Union.

It’s also worth remembering that the whole border debate isn’t just about customs and tariffs. It’s also about the rules and regulations which apply to products that move around the EU single market.

THE UK’SDSo, even the most innovative customs system in the world will not remove the need for border checks entirely.