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Government publishes proposal for post-Brexit customs arrangements

Gareth Bevan 16 August 2017 No comments

The Government has published its long-awaited proposals for future customs arrangements after the UK leaves the EU in March 2019.

In the future partnership paper the Government outlines customs arrangements which it believes will facilitate “the freest and most frictionless trade possible in goods between the UK and the EU”, but which would also enable the UK to agree its own new trade relationships with countries around the world.

The proposals

The two proposals put forward in the paper are:

  • “A highly streamlined customs arrangement between the UK and the EU, streamlining and simplifying requirements, leaving as few additional requirements on EU trade as possible. This would aim to: continue some of the existing arrangements between the UK and the EU; put in place new negotiated and potentially unilateral facilitations to reduce and remove barriers to trade; and implement technology-based solutions to make it easier to comply with customs procedures. This approach involves utilising the UK’s existing tried and trusted third country processes for UK-EU trade, building on EU and international precedents, and developing new innovative facilitations to deliver as frictionless a customs border as possible.
  • A new customs partnership with the EU, aligning our approach to the customs border in a way that removes the need for a UK-EU customs border. One potential approach would involve the UK mirroring the EU’s requirements for imports from the rest of the world where their final destination is the EU. This is of course unprecedented as an approach and could be challenging to implement and we will look to explore the principles of this with business and the EU.”

Interim period

The Government is also seeking to agree an interim period with the EU before any new arrangements enter into force.  This would avoid the “cliff-edge” scenario of moving from the EU customs union relationship to the future partnership overnight – or worse still, having to deal with more than one new customs relationship if a new partnership with the EU is not agreed until after March 2019.  An interim period would give businesses and the Government time to implement the new arrangements and allow for a “smooth and orderly transition”.

The Government is proposing that during this period there would be a continued close association with the EU Customs Union for a time-limited period after the UK has left the EU. It is suggesting a new and time-limited customs union between the UK and the EU Customs Union, based on a shared external tariff and without customs processes and duties between the UK and the EU.  The paper does not state how long this arrangement would last for, only that it would be linked to the time it would take to implement the future arrangement.

It is acknowledged in the paper however that the UK’s ultimate customs arrangements will depend on the outcome of negotiations with the EU.

Dialogue with businesses on the proposals

The Government will be holding discussions with businesses and other stakeholders to discuss the proposals over the summer.  It is keen to get views on whether the proposals for the customs arrangements and interim period will address businesses’ concerns or whether alternative arrangements should be considered.

EU reaction

Initial reaction from the EU to the UK’s proposals however has not been promising.

Guy Verhofstadt, the European parliament’s Brexit coordinator tweeted:

“To be in & out of the Customs Union & “invisible borders” is a fantasy. First need to secure citizens rights & a financial settlement.”

Michel Barnier, the EU’s chief negotiator’s reaction was to tweet:

The quicker #UK & EU27 agree on citizens, settling accounts and #Ireland, the quicker we can discuss customs & future relationship.”

Whilst the paper does include three paragraphs on the matter of the land border with Ireland it seems unlikely that there will be much, if any, discussion on it during the next round on Brexit negotiations which are scheduled to take place at the end of August.