Day 1 easements Stakeholder concerns In a no

Day 1 easements

Stakeholder concerns • In a no deal scenario: • businesses won’t have necessary skills and capacity to comply with full customs obligations on Day 1 • agent capacity is unlikely to meet demand • agents reluctant to take on inexperienced traders • risk that businesses could cease to trade rather than fail to meet legal requirements

Package of day 1 easements HMG objectives for the border • Maintaining security • Facilitating the flow of goods (including animals, food and plants) and people • Protection of revenue and compliance with standards Day one easements • Ro. Ro locations – a recap and where we’re going further • Transitional Simplified Procedures • Intermediaries’ liability • Guarantee relaxations Longer term • UK government is working on data driven solutions, use of technology for smarter borders and sharing more data

Ro. Ro Day One Model - recap Traders should either lodge declarations electronically in advance with HMRC systems or make an entry in their own records, to avoid congestion at the frontier, and hauliers/ferry operators have to do the same with safety and security declarations. In previous conversations with stakeholders, under NDA, concerns were raised about the capacity of traders, hauliers or carriers to meet the new day 1 Ro. Ro requirements. HMRC have listened to these concerns and will be introducing new easements to address them. 4

Importing your goods on Day 1 CUSTOMS Pre-border Register for EORI Pre-lodge import declaration to UK Government or complete entry in own records At UK border En route • All companies need an EORI number to trade across UK borders • Apply now on gov. uk Master Reference Number (MRN) or EORI provided to haulier/freight forwarder After arrival in UK, update status of declaration by close of business next working day Update status of customs to show goods arrived in UK Goods free to leave Risk-based checks, no change from current approach Goods held Businesses can defer payment if: • Paying customs in monthly payments Duties paid or deferred • Using special relief schemes Key: Responsible parties Business Haulier UK Government

Transitional simplified procedures • Traders can register to use TSP to delay full declarations at Ro. Ro locations • TSP will be reviewed 3 to 6 months after 29 March 2019 • 12 months’ notice will be given when HMG decide to withdraw or amend To be eligible, traders must: • Be established in the UK • Have the intention to import goods into the UK from the EU • Have an Economic Operator Registration Identification (EORI) number Traders will not be eligible if: • They are an intermediary or acting on behalf of someone else • They have a history of non-compliance Goods will not be eligible if they are: • imported from outside the EU • subject to a Customs Special Procedure Details about TSP registration process will be published on Gov. uk guidance shortly

TSP Declaration Process • There are two declaration procedures and traders will be guided to one or both depending on the type of goods they are importing: • TSP Controlled Goods process • • The trader submits a simplified frontier declaration before arrival at the border, and ensure all necessary certificates and licences are available • The reference number for this declaration is given to the haulier as proof customs formalities have been entered into • On arrival in the UK, the trader updates the declaration to arrived before the end of the working day following the crossing • This is followed by a supplementary declaration by the 4 th working day of the month following the arrival of the goods in the UK. • If the trader is already using this process, they can choose to use it for standard goods as well. TSP Standard Goods process • The trader makes a declaration directly to their commercial records when the goods cross the border • The trader will provide the haulier with their EORI number as proof the goods are subject to a TSP process • This is followed by a supplementary declaration by the 4 th working day of the month following the arrival of the goods in the UK.

Intermediaries and CFSP • • EU rules mean that: • intermediaries using their own Customs Freight Simplified Procedures authorisation on behalf of a trader who isn’t authorised are also liable for duties and import VAT. This discourages intermediaries from taking on new EU/UK clients. • new EU/UK traders are now unlikely to receive authorisation to use CFSP themselves before Day 1 easements: • allow intermediaries to act in a direct capacity whilst using their own CFSP authorisations on behalf of a trader who isn’t authorised • the trader would be solely liable for any duties or import VAT • helps intermediaries to take on a ‘one to many approach’ – catering for a myriad of traders at any one point • this policy is intended to be time-limited but we will give businesses a 12 month notice period when changing this. • this will apply to all ports, Ro. Ro and non-Ro. Ro and extends to Ro. W trade too. HMRC is not proposing to change the eligibility criteria or current exclusions for CFSP, but the intention is to limit it to goods released to free circulation

Duty Deferment • • • If a trader will have duties or import VAT to pay, they must have a duty deferment account to use TSP or an agent’s CFSP: • in practice, this is a direct debit mandate • it allows HMRC to take a monthly payment of duties • the direct debit is taken 15 days after the supplementary declaration is made EU rules require a customs comprehensive guarantee (CCG) to defer duty: • this covers multiple debts under one financial guarantee • traders must meet competence and compliance criteria to give a CCG • can take up to 120 days Day 1 easements: • traders will not be required to meet the CCG criteria • traders will have until 30 June 2019 to submit a financial guarantee to HMRC to back their deferment account • traders can still choose to apply for a CCG, as those with AEO C status can seek a reduction in the level of guarantee required to defer duty

Other guarantee relaxations • Special procedures allow traders to suspend duties and VAT: • in some cases duties will not become due, e. g. if goods are re-exported • EU rules require a customs comprehensive guarantee (CCG) to obtain a full authorisation for a special procedure • Day 1 easements: • most traders will not be required to meet the CCG criteria nor provide a financial guarantee for: • Inward processing • Outward processing • Temporary admission • Authorised use (a. k. a. end use) • Customs warehousing • still need to meet criteria for the special procedure • this policy will be monitored, and traders will be given 12 months’ notice of changes

Guarantees for transit • The requirements for transit are governed by the CTC • A CCG will still be required to cover several transit movements, but an individual guarantee can be used for single movements • An individual guarantee can include a guarantor undertaking from a bank or financial institution and a cash deposit • The level of guarantee depends on the territories that the goods are moving through • Guarantees can take several weeks to set up, so traders should contact their bank or insurer about this as soon as possible

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