Policy & Compliance


BIFA’s Customs Policy Group supports the overall direction of the White Paper, because it retains something as close as possible to membership of the Customs Union and Single Market, which has been the Association’s position for some time.


at the border to each other’s markets or goods”. The White Paper proposes that this can be achieved by the establishment of a free trade area for goods as part of a wider economic partnership agreement. The wider economic partnership agreement for


customs purposes comprises: • A common rulebook for goods, including agri- food, covering only those rules necessary to provide frictionless trade at the border. The UK would commit by treaty to ongoing harmonisation with the relevant EU rules.


• The UK would participate in those EU agencies that provide authorisations for goods in highly regulated sectors such as chemicals, aviation and medicines.


• The phased introduction of a new Facilitated Customs Arrangement (FCA) between the UK and EU. Effectively this means that there would be a combined customs territory between the UK and EU in which the former would apply the EU’s tariffs and trade policy for goods intended to be sent to the latter. The UK would apply its own tariffs and trade policy for goods intended for consumption in the UK. It is argued that this arrangement would remove the need for customs interventions, including customs declarations for goods moving between the two territories,


September 2018


BIFAlink


because the UK has applied the correct tariffs and rules of origin for all goods known to be destined for the EU at the time of import. Where the final destination is unknown, the higher of the UK or EU rates will be applied and a drawback process utilised to recover any overpaid taxes, if the goods are to be shipped to a lower tariff jurisdiction.


• The FCA would be introduced in conjunction with a free trade agreement which would remove the need to impose tariffs on any goods moving between the UK and EU. In addition, there are references within the document to


arrangements covering services (including financial) and digital commerce with a new framework to cover border controls. The government has stated that such a partnership would


allow the UK and EU to meet its commitments to Northern Ireland and the Republic of Ireland. Also, it is argued that the proposal meets the outcome of the referendum by allowing the UK to take back control of its frontier activities, including controlling the movement of people, and to conduct its own trade policy. BIFA’s Customs Policy Group supports the overall direction


of the White Paper, because it retains something as close as possible to membership of the Customs Union and Single Market, which has been the Association’s position for some time. Members, particularly those engaged in intra-EU road freight movements, have specifically stated that they do not want to see the re-introduction of customs declarations for shipments moving between the UK and EU. The White Paper meets both of these ambitions.


Significant concern A significant concern about the White Paper is that whilst it covers customs and trade policy in considerable detail, references to transport policy are very brief. It has to be remembered that if you cannot transport goods, then the


importance of customs and trade policy are significantly diminished. Also, there is apprehension regarding the White Paper’s unprecedented, almost experimental approach to customs. Specifically, Members have concerns regarding the


drawback system proposed under the FCA, and reference to introducing a trusted trader scheme. It should be remembered that drawback is unpopular in the EU and the facility was removed under the UCC. Also, it is unlikely to accept anything other than the


authorised economic operator (AEO) as a trusted trader scheme. From the EU’s viewpoint, the biggest stumbling point is likely to be that the White Paper’s proposals weaken certain elements of the Single Market and Customs Union. In effect the UK could be seen as cherry picking. As the document points out, the UK will leave the EU,


including the Single Market and Customs Union. By doing so the UK will regain control of its frontiers, be able to follow its own independent trade policy and end the free movement of people. The hope has to be that the White Paper, however flawed, can be seen to have merits which the UK and EU can discuss with a view to concluding a negotiated settlement for the UK to exit the EU.


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