On 12 July 2018, the government published an additional white paper to discuss its vision for a future relationship with the European Union.
It follows a major cabinet reshuffle and the resignation of several key ministers involved in the Brexit process.
What new information does it contain?
It represents a revised vision for the future relationship. From a movement of goods perspective, it is very similar to a previous iteration.
In it’s own words…
14. The UK’s proposal is to agree a new Facilitated Customs Arrangement (FCA) with the EU. As if in a combined customs territory with the EU, the UK would apply the EU’s tariffs and trade policy for goods intended for the EU. The UK would also apply its own tariffs and trade policy for goods intended for consumption in the UK.
It mentions that ‘trusted traders’ will have a role to distinguish the ultimate destination of goods. This is vital for business to note. If this vision comes to pass, trusted trader status will be of vital importance to businesses that require smooth processing of movements of goods.
It also suggests a refund scheme for UK destined goods imported into the EU-27. This would also apply for goods imported into the UK where the ultimate destination is unclear.
What happens next?
Negotiations with the EU resume next week. An agreement must be reached in principle by October 2018 to give sufficient time to ratify. At the moment, EU officials are keeping their cards close to their chest as to their thoughts on the content of the white paper.
Initial thoughts on the white paper
From a movement of goods perspective, I personally see some flaws and loopholes if this idea were to pass. It would require a lot more detail in terms of management of processes, reliefs from duty and rules around originating status.
In my opinion, the majority of businesses are far from ready to manage this increased complexity in importation processes.
The white paper also talks of a major role for ‘trusted traders’ – this is very interesting. Authorised Economic Operator (AEO) is the EU’s definition of a trusted trader and currently, only 630 UK companies are registered as an AEO. Theoretically we could develop our own definition, but lets not forget that the white paper also talks of harmonisation of some standards – could AEO be one such standard?
Ultimately, there will be a lot of pressure on business to achieve ‘trusted trader’ status, and to develop the processes and procedures required to identify the ultimate destination of goods and originating status.
Where to find more information
Follow this link to read the Customs White Paper July 2018 in full
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