Monday 21 August 2017

Ambitious e-border plan can help keep trade flowing

Revenue chairman Niall Cody Photo: Tom Burke
Revenue chairman Niall Cody Photo: Tom Burke
Colm Kelpie

Colm Kelpie

Tony Buckley has an unenviable job. As the head of customs at the Revenue Commissioners, he's grappling with the complex issue of how to ensure Ireland's borders remain as open as possible to trade with the UK post-Brexit, while also ensuring that they comply with EU border rules.

In the year since the Brexit vote, Government and businesses alike have stressed the need for a smooth trading relationship between the UK and Ireland once the former leaves the European Union, given the close economic links between the two countries.

There's also the political imperative of ensuring the land Border between North and south is kept open.

Mr Buckley's focus is entirely on trade. He and his boss, Revenue chairman Niall Cody, have struck a relatively positive tone.

Assume there'll be some form of customs controls, they've told businesses. But there will be no return to checkpoints or long delays at the Border, even in the event of a hard Brexit, they say.

Cars will criss-cross the 499km frontier between Derry and Dundalk unimpeded. Commercial traffic will have to declare their goods, but that will be done via an automated system, or e-border. Businesses will pre-register with Revenue to become trusted operators, and physical checks, Revenue expects, will be rare. No Border sites are being identified for customs posts, it insists.

It's an ambitious plan, not least because our borders will become EU frontiers after the UK exits. But Revenue is convinced it can be done. The will is there, the execution, however, has yet to be nailed down.

"I suspect that we will have a very smooth, serene system, but under the water the legs will have to paddle furiously to make it work," Mr Buckley told reporters recently.

Managing the volume of trade across the Republic's land, sea and air borders, if, as feared the UK pulls out of the customs union, will be one of the most significant challenges from Brexit.

Consider the following: about one million roll-on roll-off units arrive into Irish ports each year, with about 90pc of them coming from the United Kingdom.

It's estimated that about one million HGVs, 1.3 million vans and about 12 million cars move between Northern Ireland and the Republic, and vice versa, annually.

About 12,000 businesses in Ireland export to the UK, and more than 60,000 import. In addition, there are unknown numbers that move goods across Northern Ireland and across the UK, bound for clients on the continent.

Delays could significantly hit businesses' bottom lines. Nick Mottram of Irish Ferries recently said that at any moment there could be 400 trucks coming off a ferry from Ireland at Holyhead.

"If there's a 30-second delay for customs, that would be about three hours and 20 minutes. That's seven kilometres of trucks," he told a tourism-related briefing.

Revenue's plans include having as many businesses as possible register goods with them in advance, and that will require enhanced Revenue IT systems and extra staff.

Post-clearance checks already take place, including customs audit, which are carried out at traders' premises. So there is a template there, as such.

These so-called 'Authorised Economic Operators' (AEOs) have a special status in the system and are allowed to operate greatly simplified customs procedures. There are currently 133 AEOs and these account for 82pc of all imports and 89pc of exports.

"It will be very important that the bulk of trade continues to be through AEOs after Brexit," Mr Cody said.

Physical checks are rare, Revenue states. Exports are generally checked only for safety and security reasons and in 2016, less than 0.5pc of export declarations were checked. Customs checks mainly apply to imports. In 2016, 6pc of import declarations were checked and less than 2pc were physically checked. Those that were, were done at approved warehouses.

But questions remain. To what extent would there be co-operation between Irish customs and UK customs, to ensure a vehicle isn't stopped on the UK side? How do you deal with smuggling?

And will Brussels allow Ireland operate a free-flow Border?

And then there are the costs to business, regardless of whether the Border is open or not. A UK outside of the customs union means tariffs if a free trade agreement is not established. And even without tariffs, there's the cost of readying businesses wholly unused to operating in a customs environment.

That there is a desire in Dublin, London and Brussels to keep the Border as open as possible is welcome. If the UK remains in the customs union, in some form, Revenue's preparations may not be needed.

With divorce talks beginning on Monday, clarity on this key issue is sorely needed.

Irish Independent

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