Additional customs formalities after Brexit inevitable

When Roel van ‘t Veld, policy advisor and Brexit Coordinator at the Dutch Customs Administration, spoke at a Brexit event in Netherlands last week, the message was clear: “…additional customs formalities after Brexit are inevitable”.

This is a translated text version of the addeess and a posting on LinkedIn of Mr. van ‘t Velds comments. I fully agree with him.

If the waiting time at Customs at Calais is extended by two minutes, there will be kilometers of traffic jams for the tunnel to the United Kingdom. With the Brexit on the doorstep, these waiting times can increase because the British leave the internal market and the customs union. “This means that free movement of goods is no longer possible,” says Roel van ‘t Veld. “From the moment the Brexit is a fact, the customs rules for third countries will apply, without exception.”

“It is up to the companies to prepare for Brexit”

With this warning, Roel started his presentation during the Brexit session, organized by Nieuwsblad Transport last Thursday. “It is up to the companies to prepare for Brexit,” continued the Customs officer.

He has little faith in the announced transition period. What the deal with the British will look like is still shrouded, in fact it is not even certain that there will be a deal.

In the partial agreement that was presented last month by the negotiators, many parts of the text were shaded green, text to which the EU and the United Kingdom agree. But there were also a lot of white parts about which no agreement has yet been reached. Among other things, the pain points around the Irish border were not shaded.

The British have the premise that there is only a deal if agreement has been reached on everything. “We do not know where we stand in the process, but one thing that is certain is that that the departure of UK from the EU has consequences.

“Dutch customs and UK customs are working on both sides of the North Sea. In the Netherlands several hundred new customs officers are being trained; in the United Kingdom thousands of new civil servants are needed.

“The customs processes are becoming active again,” he continues. This also yields new processes, for example a protocol has to be developed for the ferries. That ball is with customs, but for the companies the consequences are huge.

The pricedures needed for export to a country outside the EU therefore also applies when exporting to the United Kingdom post-Brexit. Although Dutch Customs nowadays work completely digitally, it does generate a lot of work.

This is illustrated by an example of an exporter of ready-to-eat meals. At the moment, the movement to the United Kingdom is simple. “This exporter will soon have to deal with nine additional documents and procedures.” Among others, a phytosanitary / veterinary certificate, trader at exit and the ECS procedure must be followed. “If you are not prepared for this, you have a big problem”. Similar procedures apply to imports from the United Kingdom.

A second factor that requires attention is the import tariffs that will apply. For example, the so-called 0 tariff only applies to products that consist entirely of British ingredients or components. “There is a viper in the grass, because if one ingredient is not British, this rule no longer applies.” Customs expect to process 20 to 33% more declarations after the British have left the Union. This corresponds to millions of extra declarations per year.

The hope that an agreement will be concluded with the British as with other countries is limited. The demands of the British do not match the different options. This means that agreements such as those with Norway, Switzerland, Ukraine or Turkey are out of reach so far. The two options that remain are an agreement such as CETA with Canada or the rules of the World Trade Organization. “Then the United Kingdom will receive a Most Favored Nation status. It sounds like they are winning the jackpot, but it means they are treated like any other country with which no agreement has been reached.”

I think that this is an extremely timely and valid argument. The non-tariff barriers from UK leaving the Customs Union and territory and thus leave the free movement of goods, are the real challenges that need to be addressed – and it is urgent. Companies need to start preparing now.