November 2018: Customs SI package


Overview presentation Joint Alcohol and Tobacco Consultative Group: Excise Brexit Sub Group




• Overview

• Summary of SI first tranche package

• Overview of each SI

• Questions and comments



• The Withdrawal Agreement and Political Declaration on the future relationship between the UK and EU was endorsed by leaders at a special meeting of the European Council on 25 November. The government will lay these before Parliament ahead of the parliamentary debate and vote on the approval of these documents.

• The government does not want or expect a no deal scenario. It is however the duty of a responsible government to continue to prepare for a range of potential outcomes including the unlikely event of no deal.


Customs SIs expected to be laid shortly.

• The Customs (Import Duty)(EU Exit) Regulations 2018

• The Customs (Special Procedures and Onward Processing (EU Exit) Regulations 2018

• The Customs (Temporary Storage Facilities, Approval Conditions and Miscellaneous Import Amendments ) (EU Exit) Regulations 2018

• The Customs Transit Procedure (EU Exit) Regulations 2018

• The Statistics of Trade (Amendment) (EU Exit) Regulations 2018

• The Customs (Contravention of a Relevant Rule) (Amendment) (EU Exit) Regulations 2018

• The Wharves and Temporary Storage Facilities (Approval Conditions) Regulations 2018

• The Wharves, Airport Examination and Temporary Storage Facilities (Approval Conditions) 2018

• Also the VAT (Disclosure of Information Relating to VAT Registration) EU Exit Regulations 2018

The Customs (Import Duty)(EU Exit) Regulations 2018 (slide 1 of 2)


Will ensure that goods can continue to arrive, without interruption from lengthy customs controls, at UK entry points before being made available to the UK market. In particular, it regulates:

• the arrival of goods in the UK;

• the presentation of goods to UK customs;

• the making of declarations to customs procedures and temporary storage declarations;

• existing approvals and authorisations – for example those UK-established operators who currently benefit from certain simplified import procedures and facilitations (such as authorised economic operators) and in doing so ensure that they can continue to do so;

• new approvals and authorisations – for example UK-established operators who do not currently have access to simplified import procedures and facilitations and ensure that they can apply for these facilitations by reference to the relevant eligibility criteria;

• customs agents;

• how goods are valued;

• guarantees, and other forms of payment and in doing so ensure that those that can be used currently can continue to be used under UK legislation;

• how liability to import duty will be notified and discharged by HMRC;

• repayment and remission of liability by HMRC (where appropriate);

• the importation of parcels;

• the importation of goods in personal baggage;

• the imposition of fees by HMRC and Border Force when asked to fulfil its duties outside normal working hours.


The Customs (Import Duty)(EU Exit) Regulations 2018 (slide 2 of 2)

• This SI also implements a core part of our plan to avoid potential queues at certain Roll on Roll Off (RoRo) locations and to help trade flow. It does so by mandating that all traders going through those locations must complete customs declaration in advance of arrival.

• The locations where these obligations apply have been chosen in consultation with individual RoRo ports, based on criteria aimed to target RoRo ports where customs formalities would be impeded if declarations were not pre- lodged, and will be clearly set out in a public notice.

• Another part of the instrument follows the principles of the Interpretation Act 1978 that were adopted when the UK joined the EU. This means that goods underway prior to exit, and the procedures that relate to the goods, will continue to be subject to EU rules until they are declared to the UK customs authorities, or they enter the UK’s domestic market.

• Union goods dispatched from the EU before the UK’s exit but arriving after this time will not need to be declared to customs.


The Customs (Special Procedures and Onward Processing (EU Exit) Regulations 2018

This SI broadly replicates the effect of UCC legislation in relation to the outward processing and special Customs procedures. These procedures are facilitative and allow, in certain cases, for the suspension or reduction of import duty that would otherwise be due when goods are brought into the UK. This instrument sets out eligibility requirements, and rules governing the operation of, the following procedures:

• a storage procedure, under which imported goods can be kept in a premises approved by HMRC (customs warehouse) without import duty being due;

• inward and outward processing procedures, which provide for import duty advantages in cases where goods are imported to the UK for processing and then exported, or where domestic goods are exported outside the UK for processing and then returned to UK;

• an authorised use procedure, under which goods imported to the UK for a qualifying use will be subject to a lower rate of duty than would otherwise apply if the goods were imported for a non-qualifying purpose;

• a temporary admission procedure, under which certain goods can be imported to the UK with full or partial relief from import duty.

In addition, what EU legislation refers to as ‘end-use procedure’, is being replaced with the term ‘authorised use procedure’.


The Customs (Temporary Storage Facilities, Approval Conditions and Miscellaneous Import Amendments ) (EU Exit) Regulations 2018

• This SI will ensure that temporary storage facilities are only approved where the facilities are able to carry out their function effectively. Operators of those facilities need to be able to satisfy HMRC that the facilities are appropriate and setting out conditions in regulations clarifies what needs to be done for approval to be granted. The conditions introduced by this instrument broadly reflect the conditions for approval currently required under the UCC.

• For goods to be imported legally, they must be presented to customs authorities upon their arrival and must remain under customs control until they are released either to free circulation or a special procedure (such as temporary admission). The mechanisms for such presentation vary between modes of transport (road, rail, air etc). The various mechanisms are covered by specific CEMA based regulations and this instrument is required to update those regulations to ensure that they are consistent with current requirements.


The Customs Transit Procedures (EU Exit) Regulations 2018

• The UK is currently a member of the Common Transit Convention (CTC) as an EU member state, and a member of the International Road Transport (TIR) convention. The UK wishes to continue to benefit from the cross border trade facilitation offered by these conventions after EU exit.

• Negotiations on the UK’s accession to the CTC are ongoing.

• This SI is designed to broadly replicate the effect of the EU legislation referred to above to deliver the required legal framework.

• The instrument sets out various rules that will apply when goods are moving in the UK under a transit procedure, including the CTC or the TIR Convention. This includes • a requirement to present goods to HMRC at the start and end of the transit journey in the UK • rules about declaring goods to the procedure

• the obligations on a person who has declared goods to the procedure or a person who is carrying these goods, and rules concerning the discharge of the procedure • requirements on HMRC in relation to the exchange of information and the provision of assistance to other customs authorities in relation to goods moved under the procedure • Providing for the existing simplifications under the procedures


The Statistics of Trade (Amendment) (EU Exit) Regulations 2018

• In the event of a no agreement being reached, when the UK leaves the EU, trade statistics relating to imports and exports of goods will in most cases be collected from customs declarations.

• This SI preserves the right to collect trade statistics both through customs declarations and also through intrastat declarations should customs declarations not be required.


The Customs (Contravention of a Relevant Rule) (Amendment) (EU Exit) Regulations 2018

• This SI will ensure that HMRC will be able to operate an effective customs civil penalties regime after the UK exits the EU. The SI will apply the existing customs civil penalties approach to UK-EU trade and is consistent with the approach taken to trade with the rest of the world.

The Wharves and Temporary Storage Facilities (Approval Conditions) Regulations 2018

• HMRC considers it necessary to require particular locations handling such goods to meet certain conditions related to basic import and export customs rules before being granted the necessary approval to operate as such a place. (As set out in a separate notice).

• Any processes at the border for day one would represent a stepping stone to a technology-based solution, to be delivered over the longer-term. HMRC are discussing with RoRo ports how best this can be delivered. It is envisaged that this SI will be the mechanism by which HMRC could deliver a technology-based solution with ports.

• This SI places no new obligations itself, and will only be used once we have concluded our longer- term no deal policy in consultation with ports.


The Wharves, Airport Examination and Temporary Storage Facilities (Approval Conditions) 2018

• Current requirements for amenities and facilities (such as parking for official cars, office space and toilet facilities) that ports, airports, etc. are expected to provide, free of charge, are contained in guidance that was agreed in 2007. These have formed the basis of negotiations for the relevant approvals since that time.

• The aim of placing the requirements in legislation is to make the process clearer and more effective. The instrument sets out the full set of requirements, but enables HMRC and the applicant to agree which of them are actually required, and at what scale, on a case by case basis to avoid unnecessary burdens on business.

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