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Policy & Compliance


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Lockdown and the government response to the challenges


The Covid-19 crisis has taught us that within the legislation we know today, there exists room for flexibility that can be utilised not only in a pandemic but also in individual cases if businesses can convincingly justify the use of emergency measures


Over the past three months, businesses and authorities have been presented with a number of very unusual operational scenarios. The lockdown has affected operations in a variety of ways, starting from the physical inability to handle cargo to a wide array of issues linked directly or indirectly to the legal or procedural requirements. At the time of writing this article, it is clear that the government response in many cases has met the industry’s expectations, while in others the industry still feels the response has been inadequate.


The enquiries the Secretariat received during the first weeks in lockdown focused on three main policy areas: • Specific measures to help importers of PPE and medical equipment,


• Customs debts and guarantees, • Procedural easements, particularly in the area of document presentation and proof of origin.


European response


Since the UK is still subject to EU law and the response had to be coordinated on the European level, BIFA together with other freight forwarder associations in Clecat sent a letter to the European Commission explaining the challenges and requesting a prompt response. The response from the European Commission was swift and addressed most areas of concern, but what was of particular interest was that the reaction to the industry’s concern was not new legislation but the use of already existing regulations and emergency powers included within them. Taking customs debt and


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guarantees as an example, the response was based on a number of the UCC (eg Art 45, 112) and/or DA (eg 89, 91) articles allowing customs authorities to refrain from requiring a guarantee or charging interest on arrears in specific cases if public interest demanded it. While it was not possible to allow for exceeding the guarantee limit, the EC introduced a number of easements allowing for duty and VAT waivers, particularly in areas directly linked to the Covid-19 relief procedures. This approach determined the response on the national level. The guidance the UK government issued to the trade was a mix of blanket sector easements like duty/VAT waivers and individual approaches, as in the case of guarantees or duty deferment accounts handling. An area where the response, at least initially, fell short of meeting the industry’s expectations was original document requirement and handling. What seemed like an obvious candidate for simplification took the authorities a long time to establish. It took the EC and UK government around a month to provide guidance allowing for authorised use of copy documents certifying origin or preference, even though this issue was highlighted as a priority at the early stages. But, surprising as it may sound, it is a logical consequence of the fact that these


documents need to be recognised and authorised by trading partners on both the issuing and receiving end of the chain. And this takes us to the opportunities the new


situation presents. The Covid-19 crisis has taught us that within the legislation we know today, there exists much room for flexibility that can be utilised not only in extreme situations like pandemics but also in individual cases if businesses can convincingly justify the use of emergency measures. This is particularly true with matters related to guarantee requirements or potential flexibility in payment arrangements.


Paperless certification What is more, the drive towards paperless certification of origin or preferential treatment has gained a new momentum, and even those countries widely known for their reluctance to embrace e-documents are now shifting their stance.


The new normal, the phrase now commonly used, is showing the authorities and trade that what seemed unimaginable before March 2020 can work in real life and may provide tangible benefits to all involved in international trade. List of facilitations and easements available to British traders can be found at: www.bifa.org/news/articles/2020/apr/update-on- covid-19-customs-response?l=y


June 2020


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