BREXIT: Chaos and Confidence

568 companies are set for preferred HMRC treatment after BREXIT, while civil servants predict that HMRC’s new processing system launch will result in ‘chaos’

If companies are to avoid physical Customs checks at borders under a new UK-EU Customs regime  they, or their agent, will need to be AEO accredited, the new Customs Bill confirms.

Despite identifying Authorised Economic Operators (AEO) place in keeping the supply chain moving at this critical time, less than 600 companies have actually been accredited. That is a small fraction of those UK firms involved in international transport and Customs clearance.

The government have confirmed that they will look at options to reduce the pressure and risk of delays at ports and airports by negotiating mutual recognition of Authorised Economic Operators to enabling faster clearance of goods.

AEO shipments experience fewer or no inspections and certain Customs regimes are only available to AEO’s.

“MIQ Logistics have been AEO accredited for many years and will work tirelessly to keep our customers goods moving without interruption through Brexit”

Becoming an AEO-certified operator is an extensive and detailed process, with 95% of initial AEO applications failing.

The application process takes months and companies need to prepare carefully for months prior to submitting their applications, so non-accredited forwarders are running out of time.

The chaos that civil servants fear

Replacement of the HM Revenue and Customs declaration processing service CHIEF, has been due for years. It is long past its shelf-life and incapable of integrating forthcoming international trade changes.

The Customs Declaration Services programme (CDS) has been established to replace the current CHIEF service and integrate the International trade supply chain process changes needed by the Union Customs Code (UCC) and the EU Multi Annual Strategic Plan (MASP).

The problem with the implementation plan is that HMRC didn’t take into consideration Britain voting to leave the EU. In fact the contract for CDS was signed just days before the vote.

Operation Stack

Operation Stack

CHIEF was designed to handle 50 million transactions a year, and it’s successor, 180 million. If the Government are unable to negotiate borderless trade, those transactions could increase five-fold from 55 million to 255 million.

CDS is due for launch in January 2019 just two months before we leave the EU.

The UK’s customs chief says there is no “guarantee” that CDS will be ready for a no-deal Brexit.

Asked if it would be “catastrophic” for the system to fail, if Britain has crashed out of the EU with no new customs arrangements, he replied: “Yes.”

Despite the critical importance of achieving deadlines and implementing these changes efficiently it was reported in March 2017 that the CDS planning team had 67 vacancies!