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Policy & Compliance


How prepared is UK trade for 1 January?


Evidence suggests that COVID-19 has not just halted preparations for 1 January, but actually regressed them. And there is huge uncertainty over the reliability of new systems and just how many hauliers will consider it worth their while attempting to cross via the Channel ports


Ever since the UK voted in June 2016 to leave the EU, there have been various visions about what Brexit will entail. We have had two governments with fairly different views on the subject and the UK has gradually moved further away from the closer relationship envisaged by Theresa May to a rather more limited and distant relationship as envisaged by Boris Johnson. At the time of writing, the EU and UK are still


trying to reach agreement on a trade deal, which does cloud the picture. However, the ambition from the UK perspective is limited, which does increase the likelihood of success. The government frequently refers to an ‘Australian deal’, which is a ‘no deal’ but with a series of bilateral agreements on certain goods, etc. The most balanced report on the UK’s


preparedness was the National Audit Office’s (NAO) report published on 6 November. BIFA Members were surveyed earlier in the year and their views were forwarded to the NAO, for which BIFA has been thanked. The most startling finding of the survey was not only that COVID-19 has delayed Members’ preparations, but has actually caused them to regress. However, there is no doubt that in recent weeks and months preparations for 1 January 2021 have been stepped up by all.


Exacerbated delays In its report, the NAO notes that the UK government “has built on the work done for previous EU Exit deadlines, but COVID-19 has exacerbated delays in government preparations and significant risks remain, particularly in relation to implementing the Northern Ireland Protocol, and trader readiness more generally.” Government has taken certain views about


which regimes trade will increase its use of – and there is significant emphasis placed on transit by HM Revenue & Customs (HMRC). The report notes that departments have made progress in implementing systems, infrastructure and the resources required to operate the border in


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relation to Britain at a “minimum operating capability” by January 2021, and that it will be challenging to deliver the programme in its entirety. Referring to HMRC’s plans, especially relative


to transit, the NAO commented: “If all the planned arrangements are not ready, this could have an impact on the ease with which traders can import and export goods.” One point that is highlighted is the lack of time


available to integrate trade with government systems. BIFA is very concerned that the Goods Vehicle Movement Service (GVMS) will not have been tested and be fully available to trade on 1 January 2021. In theory it has to be for transit, but for non-inventory linked ports it provides in effect a ‘virtual’ inventory system controlling movements and releasing shipments. The report highlights “that there is still likely to


be significant disruption at the border from 1 January 2021... The government’s latest reasonable worst-case planning assumptions, from September are that 40% to 70% of hauliers will not be ready for these new controls and up to 7,000 lorries may need to queue at the approach to the short Channel crossings, such as Dover to Calais.” This then leads onto other issues such as how


many truckers will be willing to cross the short straits? Having discussed matters with Members and other trade associations, there is growing concern that many EU hauliers, concerned at delays and unfamiliar processes, have decided


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that they will not do so. This brings us on to a particular concern


regarding what was originally named ‘Smartfreight’ and has now been renamed ‘Check an HGV is ready to cross the border’. Members who have looked at the system are less than complimentary and there is still a lack of clarity surrounding in what circumstances it should be used and how it will be enforced. All have noted that the driver can be fined £300 for non-compliance. However, this penalty only refers to goods moving through Kent. Which now brings us onto perhaps the most


fundamental point that is now crossing BIFA’s desk. What will the routing be for freight? Increasingly we are hearing from Members and seeing reports in the press that trade is at least considering routing cargoes away from the short straits. The reasons are varied, but some traders view favourably landing cargoes closer to where they are to be consumed. From a customs viewpoint, the greatest number of new and untested procedures centre around short straits traffic. Moving cargo through northern and eastern ports, which are predominantly inventory linked, gives a little more time and allows the use of procedures that are more closely aligned with current rest-of-the-world procedures. The other problem is quite simply that much


government thinking is relatively short term, which is reflected in the second edition of the Border Operating Model (BOM). For instance, much is made of the Delayed Declaration regime – but traders can only operate it until 30 June 2021. The BOM is unclear as to what traders should do between 1 January and 30 June 2021 to transfer from this regime to their longer customs solution.


How much business? We do not think anyone in the forwarding/customs intermediary side of the business under-estimates the challenges posed on 1 January 2021. The fundamental question that no-one in government or parliament has taken into consideration is how much business there will still be after the end of Transition? That is the fundamental and as yet unanswered question. This brings the writer to the last point –


Transition really only starts on 1 January and it ends on the 30 June 2021. It is during this period that trade will work out the customs procedures that need to be followed and the best mode and routing by which to move them. As a Member, with a sense of humour recently commented: “The £350 million a week saving due to leaving the EU seems to have become 350 million customs entries per annum.”


December 2020


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