1 year ago

Brexit Movement of Goods and the Supply Chain



SPECIAL TRADE COMMISSION 8. PRACTICALITIES OF CUSTOMS CLEARANCE 8.1 The purposes of customs reporting are the monitoring and enforcement of import and export policies such as payment of duties, enforcement and monitoring of quotas, security, sanitary and phyto-sanitary measures, treaty obligations such as CITES, anti-fraud and counterfeiting. If two territories can rely on each other’s respective regulations and border controls from third countries (and especially if they also operate zero tariffs and liberal RoO) border checks can be, and are, minimal. 8.2 This section assumes that, in the short term, the UK will retain the existing customs regulations that it currently applies to imports from outside of the customs union. As a result of integrated systems information sharing processes already in place, and subject to further development already in train as the new UCC is fully implemented between UK and other EU member state customs authorities, the UK and the EU should be able to agree efficient trade facilitation. 8.3 The UCC has undergone modernisation in its latest iteration, and complies with the requirements of the WTO Trade Facilitation Agreement. Electronic submission of data in EU customs operations has been in place for many years. Operators involved in international trade are already required to register for Economic Operator Registration and Identification (“EORI”) status. It is only in the most exceptional circumstances that the registration and the filing of notifications and declarations are done otherwise than electronically. 56 Customs Freight Simplified Procedures, (“CFSP”) for example, allow for electronic pre-notification of freight movements and removes border “choke-points”, by allowing for customs control to take place at the importers’ premises. There are also benefits in prioritising and further simplifying processes for trusted businesses holding Authorised Economic Operator or “AEO” status. 57 To achieve this status, international traders must not only demonstrate satisfactory record-keeping capacity, but also physical security in terms of manufacturing processes and logistical arrangements. A key financial benefit of being an AEO is that a mandatory guarantee for potential debts under customs procedures such as IPR may be reduced or waived. 58 If such customs procedures need to be deployed more widely and in respect of greater sums, funding such a guarantee will be a material financial burden, so AEO status will become more valuable for many businesses in the UK and the EU. 8.4 AEO recognition is not compulsory, and at present relatively few businesses in the UK have applied for it. To date 508 UK businesses have been accepted as AEOs, compared to 5,984 in Germany, 1511 in the Netherlands and 412 in France. 59 As AEO status is a globally recognised accreditation managed by the World Customs Authority, more businesses should be encouraged to consider applying for it, with a view not only to future trade with EU countries but the global trade opportunities that the government will be pursuing. This should be a priority as applications take up to six months to process and could take longer if there is a spike in applications in the run up to the Exit Date. 22 |

SPECIAL TRADE COMMISSION 8.5 Because the imports and exports between the EU and the UK will be subject to customs clearance if the UK leaves the customs union (whether or not tariffs are applied) the HMRC IT system will need to have its capacity expanded accordingly. The incumbent CHIEF system is already being replaced with a system known as Customs Declaration Service (“CDS”) in order to implement the changes to the UCC, due to be completed by December 2018. 60 HMRC have service levels for clearance of imports in different categories 61 (in practice, we understand that the vast majority of entries are cleared automatically based on the data submitted and automated risk assessment in a matter of seconds) but submissions that do not clear the automated risk assessment process will need manual intervention, so additional staff will also be required. Above: Shipping containers ready for loading on to a freight train for delivery to Felixstowe docks for export. Doncaster Rail Port, Yorkshire, July 2016. 8.6 Facilities at ports for dealing with import requiring immediate or real time customs control will need to be attended to. As customs reporting volumes in the main EU ports of entry from the UK will increase, all parties will be incentivised to cooperate to minimise disruption. The UK, France, Belgium, the Netherlands and Germany are all in the global top 10 for | 23

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