Border model could leave the UK between a rock and a hard Brexit

By Jo Gilbert

Published: 27 July, 2020

At more than 200 pages long, the government’s new policy document on the UK’s Border Operating Model (BOM) promised nuts-and-bolts guidance on what cross-border trade will look like at the end of transition on 31 December.

Michael Gove called the document – announced in parliament on 13 July – the blueprint for what will be “the world’s most effective border by 2025”.

But less than two weeks after its release, question marks still hover over many aspects of the model, while throwing a stark light on the ever-evolving package  of red tape set to meet UK businesses at the 1 January start-line.

For alcohol, the biggest change will undoubtedly be the introduction of a customs declaration for all goods coming in from the EU.

As a controlled-goods industry, alcohol importers and exporters working with the UK are already well-versed in this process. Businesses have been filling in customs declarations for years with alcoholic shipments coming in from outside the EU’s member states.

But as this process widens to cover all standard goods, it’s clear how those long-talked-about gridlock nightmares could become a reality.

“There will be 250,000-plus businesses in the UK having to make complicated declarations that didn’t have to make them before, and a similar number on the other side of the Channel,” says David Richardson, regulatory & commercial affairs director at the Wine & Spirit Trade Association (WSTA).

“I’m more concerned about the [knock-on effect] from other industries. If there are traffic jams at ports, it probably won’t be of our making, but we [as an industry] will still suffer,” he adds.

Anticipating tailbacks and teething problems, the BOM revealed several measures aimed at combating delays.

Pre-lodgement, for example, is part of the government’s plans for roll-on roll-off (Ro-Ro) trade, allowing importers/exporters to fill out customs declarations in advance of hitting the border.

However, we still don’t know what electronic systems will be used to facilitate this, or which of the selected ports will be participating (see bottom of page).

Then there’s the mysterious Goods Vehicle Movement Service (GVMS), which hasn’t been finalised. There is talk of just licensing the French system. There is also mounting concern around the Excise Movement & Control System (EMCS). Coupled with mounting secrecy inside the cabinet office over the past few years, these things have understandably resulted in some handwringing at the WSTA.

With less than five months from the – now concrete – 1 January deadline, particular umbrage is being taken at Gove’s calls for businesses to plan ahead of time. A phased process for customs declarations is being brought in for most industries to defer until July. But this won’t help the alcohol industry, which is expected to be fully compliant on 1 January.

“The fanfare around preparations for 1 January has stuck in everyone’s collective craw,” says Simon Stannard, director of policy at the WSTA. “We’ve been desperate for detail on future operations, but in a 200-page document it’s still less than half the picture.”

Degrees of frustration are in evidence when speaking to members of the WSTA. But, comprised as the organisation is of mainly ex-government workers and former civil servants, bafflement persists that after all these years the government doesn’t seem to ‘get’ just how important both the alcohol industry and a smooth transition are to the UK’s wider health and wellbeing. Similar bemusement surrounds offers to collaborate on workable solutions which have largely fallen on deaf ears.

At least we now have clarity that the transition period will definitely come to an end on 1 January. Customs declarations for all EU goods are also as set in stone as it’s possible for them to be, regardless of whether we come to the end of this time frame without a free-trade deal.

The advice for now is to get as many goods as possible past the border before 1 January – as much as the rest of a strange and costly year will allow.

Tightening borders: The nuts and bolts

When the UK’s transition from the EU ends on 31 December 2020, a new era of customs and checks on goods moving between the UK and EU will be ushered in. Here’s what we know – and don’t know – about how it will work.

Customs pre-lodgement

What we know

As customs declarations are set to be introduced from 1 January, pre-lodgement is a new measure aimed at allowing importers/exporters to fill out forms in advance to allow for roll-on, roll-off trade.

What we don’t know

Which ports are participating. Pre-lodgement and temporary storage for goods will only be in use at some ports – probably the major ones such as Dover and Southampton. There are expected to be differences between ports, so businesses will have to review the routes they use. The advice is to move stock now, before the deadline, to avoid upheaval.

Northern Ireland

What we know

Not a whole lot. The Border Operating Model (BOM) is for Great Britain only. We still don’t know how cross-border movements with NI will work.

What we don’t know

The Customs Declaration System (CDS), the new version of HMRC’s Customs Handling of Import & Export Freight (CHIEF), is up and running and will have to be used for trade with NI. Only a few businesses are on the CDS so far, though. The rest will have to migrate at some point, causing further upheaval.

What IT systems will be responsible for what

What we know

All customs duty will be collected via CHIEF/CDS. The Excise Movement & Control System (EMCS) will be switched off for receipts from the EU, meaning goods will have to leave the EU’s corner of EMCS and enter the UK system in a three-step process.

What we don’t know

The UK government has still not built its Goods Vehicle Movement Service (GVMS) IT system, despite the end of transition looming. The GVMS is intended to allow trucks to declare goods ahead of reaching the border, suggesting it could be used for pre-lodgement, but it remains to be seen.

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