The UK Government has announced that new border controls on imports from the EU scheduled for July 2022 are being postponed. In the short term, many (but not all) businesses are likely to welcome this move, as it reduces the risk of disruption to supply chains and will ease cost pressures. But at some point, the UK Government will have to decide on its post-Brexit approach to border controls – so what's the plan in the longer term?
UK border controls on imported goods: what's the plan?
The story so far
The UK Government's approach to border controls on goods imports from the EU has seen a series of postponements since the end of the Brexit transition period on 31 December 2020 – even though UK goods exporters have been required to comply with EU border controls in full since 1 January 2021. The latest position on EU imports is as set out in the textbox below:
- From 1 January 2022, all businesses importing goods from the EU have been required to provide customs declarations and pay any applicable tariffs "upfront". Until that point, it had been possible to deal with these matters "in arrears"; for example, most goods from the EU could enter the UK without the relevant paperwork (which could be provided to HMRC later), whereas now they face being refused entry if customs documentation is absent or incorrect.
- It had been envisaged that from 1 July 2022, all goods imported from the EU would need to be accompanied by safety and security declarations and agri-food products would need to enter via a Border Control Post to allow physical checks to be carried out (as is the case for goods from the rest of the world). However, these requirements are now being postponed out of concern that they will lead to increased costs at a time of significant inflation and possibly also disruption (particularly as a result of the proposed physical checks on agri-food products).
The overall effect of these measures is that it will remain significantly cheaper and easier for EU businesses to export goods to the UK than for UK businesses to export to the EU. That is not to say that only EU businesses will benefit from the postponement – because obviously many UK businesses rely on EU imports and will benefit from lower costs and reduced risk of disruption. However, UK producers may feel understandably aggrieved at the lack of a level playing field. Meanwhile, other businesses, including port operators, are aggrieved about wasted costs they have incurred in preparing for the changes expected in July, which is particularly unwelcome at a time when they are facing a range of other headwinds.
What's the longer term plan?
The Government has stated that it plans to introduce a new controls regime "at the end of 2023", which implies that the current arrangements will continue for at least another 18 months. Reference is made to building on the existing 2025 UK Border Strategy, which suggests a move towards greater reliance on data, technology and trusted trader schemes (effectively a form of self-regulation) in order to minimise and streamline border formalities. However, the target date of the end of 2023 would imply a significant acceleration of certain elements of the 2025 Border project. This may prove challenging to deliver – particularly if the new regime is heavily reliant on new technology.
In designing the new regime, the Government will need to be mindful of the following:
- Whilst streamlining processes and reducing the number and frequency of physical checks can produce substantial savings for business, it may also increase the chances of unsafe products entering the UK market. Most developed economies maintain some level of physical checks and documentation requirements with a view to minimising this risk.
- If the new regime results in EU imports being treated significantly more favourably than those from non-EU countries, the UK could face accusations of discrimination from the latter.
- If the EU perceives the UK as having dropped its standards as regards e.g. food imports, this is likely to make it more difficult to agree changes that would benefit UK exporters to the EU.
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