David Miller, customs and AEO Consultant at The Customs People says that businesses involved in importing and exporting should think about registering for Authorised Economic Operator (AEO) status now to minimise any potential delays resulting from Brexit
This article is the view of the authors and not necessarily of Ready for Brexit
Months of meetings, crisis talks and disputes between members of the cabinet that have culminated in a series of high-profile resignations risked overshadowing the actual details of the government’s Brexit plans regarding trade. But this week, the plan for how the country will leave the EU in 2019 has finally been published. This White Paper, referred to as the ‘Brexit blueprint’, has revealed a much softer deal than many expected.
The customs proposals, in particular, seem to cover part of the two arrangements that had previously been shunned by the EU for being ‘unworkable’, a detail which many commentators are claiming casts doubts on whether the EU will agree to these plans in the first place.
In the mere days since the White Paper was published, the Customs Bill element has received a narrow victory in parliament, albeit with amends, and it has been proposed that the EU reciprocally collects taxes on behalf of the UK where goods are imported into the EU, but are bound for the UK. This factor, which wasn’t part of the original plans, was coupled with the need to know the length of time that any ‘backstop’ period will last.
While the finer details of the Brexit deal will take some time to be confirmed, it is imperative that British businesses involved in the international supply chain should take steps to understand exactly what the government is proposing – and start making any necessary preparations as soon as possible.
The government is hoping for the UK to remain closely aligned with the EU when it comes to customs, and while the country will not remain part of the Customs Union, the White Paper suggests a more watered-down version of the Union. So much so, it is almost identical in all but its name.
An integral part of the proposals involves businesses being viewed as a ‘trusted trader’. This means that if an import from non-EU countries into the UK cannot demonstrate that it is trusted, a higher duty rate of the UK or EU duty will be applied to the goods. If this occurs, the business involved in the import or export would suffer financially if they were not deemed a trusted trader.
Although at this point the White Paper does not explain the definition of a trusted trader, there is a hallmark currently available that provides a similar benchmark and a number of additional benefits to trade businesses.
Authorised Economic Operator (AEO) status is an internationally-recognised quality mark that indicates a business’s role in an international supply chain is secure, and that customs controls and procedures are efficient and comply with international legislation. By attaining this accreditation, UK businesses can protect themselves against some of the more negative ramifications of Brexit – in particular, the predicted delays in clearing ports.
Businesses across all industries are urged to find out how AEO status could take the heat off ahead of Brexit sooner rather than later, in order to ensure they are as prepared as possible for any changes that come into play. HMRC already promotes the accreditation as a key way of reducing delays at ports, so its benefits after the UK leaves the EU can’t be doubted.
At the moment, the Brexit blueprint has not been fully agreed in parliament, however, the Customs Bill has just been passed, giving the government the power to build new trade relationships with economies across the globe. Having AEO status in place ahead of the changes will help stand businesses in good stead to prepare for the uncertainty that lies ahead.