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The Taxation (Cross-border Trade) Act 2018 comes into force from the start of next year as a direct replacement for Union Customs Code. Here BIFAlink looks at how the new legislation will work – and some of the potential problems to be prepared for


Eleven months after the UK left the European Union, and with only one month before we leave the Single Market and the Customs Union, it is time to review the customs legislation that will replace the Union Customs Code (UCC) with its delegated and implementing acts. After years of detailed discussions and negotiations, the


UCC was adopted on 9 October 2013 as Regulation (EU) No 952/2013 of the European Parliament and of the Council. It entered into force on 30 October 2013, although most of its substantive provisions applied from 1 May 2016. Interestingly that also happened to be the referendum year, which has now brought us to the moment when the UCC and the EU legislation in general will not apply in the UK any more. The code will be replaced by a UK act that was passed by


parliament on 13 September 2018 as the Taxation (Cross- border Trade) Act 2018 (TCTA 2018). TCTA 2018 is a direct replacement of the UCC, but traders


familiar with the EU legislation will immediately notice that its structure is significantly different from that of the UCC. The Act consists of six parts, 58 sections and nine schedules, which contrasts with 288 articles and multiple annexes in the UCC. Still, anyone familiar with the UCC will immediately recognise that the majority of policy provisions in TCTA 2018 are very similar to the UCC. This is obviously no coincidence as the intention of the regulators was to provide an environment that will not differ radically from the existing one that traders operate within today, in order to avoid unnecessary confusion.


Familiar concepts TCTA 2018 makes use of all the familiar concepts found in the UCC, including rules of presentation of goods to customs, special procedures, establishment or representation. But there are a number of differences as well. Most importantly, TCTA 2018 only applies in the customs territory of the UK. This automatically impacts the rules of establishment which, unless specified otherwise, only applies to traders established in the UK. The requirement to be established in the UK and not in the


EU, as in the UCC, carries a number of very important consequences. Most importantly as per SCHEDULE 1 (2), it limits the eligibility of persons to make customs declarations to those persons established in the UK or a specified place outside the UK. This concept is very similar to the approach


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found in the UCC Article 170 (2) where ‘The declarant shall be established in the customs territory of the Union’. This approach has further consequences impacting eligibility


of non-established persons to apply for guarantees, special procedures authorisations, duty deferment account or, particularly important from the customs agent’s point of view, the ability to represent non-UK established businesses using direct representation. This requirement will also mean that already existing guarantee or special procedure authorisation holders established in the EU, but not in the UK, may effectively need to cancel their guarantees or lose their ability to use special procedures, unless they establish themselves in the UK.


Supplementary regulations Going further, it is important to remember that the UCC is not a standalone piece of legislation and is supplemented by inter alia the Delegated Act (DA) and Implementing Act (IA). In the post-transition legislation, these two acts will be broadly replaced by a number of statutory instruments that specify detailed policies relevant to various customs processes – in other words SI 2018/1248, The Customs (Import Duty) (EU Exit) Regulations 2018, or 08, The Customs (Export) (EU Exit) Regulations 2019. These regulations provide guidance specific to individual processes or procedures and should be read in conjunction with the TCTA 2018. An incomplete list of customs-related statutory instruments


can be found on gov.uk, but disappointingly at present there does not seem to be a comprehensive body of customs- related legislation, which makes navigating the legislation relatively difficult. This is probably the biggest difference from the EU


legislation which, although imperfect, is easy to understand and embrace. The post-transition UK legislation at this moment in time is dispersed and difficult to follow. However, the policy continuity is largely retained so traders should be able to re-adjust quickly. Over the coming weeks the Secretariat will analyse specific


policy details but Members are encouraged to familiarise themselves with the new legislation and apply it accordingly.


• www.legislation.gov.uk/ukpga/2018/22/contents/enacted • www.gov.uk/government/publications/statutory-instruments- relating-to-eu-exit/customs-statutory-instruments


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