There will be a Border with North so act now, warns international customs expert
THERE will be severe consequences if a customs and border solution for Ireland is not designed and developed now to be ready for Brexit, according to a report by a former head of Swedish Customs.
In a detailed study, Lars Karlsson argues that with the UK outside of the customs union and single market, a customs and border solution will be required for March 2019, regardless of any political solution or the outcome of the negotiations.
The Border has emerged as the most contentious issue in the Brexit talks with just weeks to go until a crucial December summit of EU leaders during which it will be decided whether sufficient progress has been made to allow the Brexit talks move on to the next phase.
So far, the Government here has said more clarity is needed from the UK on how a frictionless border without controls or customs can operate.
All the while, businesses and exporters selling their goods into the UK are plagued by uncertainty.
Maintaining as smooth a border as possible is necessary, given the costs and the integrated supply chains, the former director of Swedish Customs adds.
For example, in the course of production of Guinness, 13,000 border crossings between north and south are made each year, the report states. Bombardier, one of Northern Ireland’s biggest employers, engages more than 60 suppliers in Ireland.
But he argues there will have to be some form of Border – a claim backed up by Sweden’s Europe Minister Ann Linde who told Sky News that it was not possible to have frictionless trade outside of the single market and customs union.
Documentation and compliance requirements at a border can increase transaction costs by 2pc24pc, Mr Karlsson says, and the total cost of obtaining a certificate of origin could be more than €450 per consignment.
Border controls can add 30-60 minutes to the border crossing time of a truck and 10-20 minutes for a car, he argues.
“The introduction of border controls along the Border will impact a large number of companies that have never previously made an export and/or import declaration. There are a number of studies that point to the time and cost impacts of border controls and compliance requirements, for example the need to obtain a certificate of origin for exporters,” the report notes.
The study, prepared for the European Parliament’s policy office, suggests the only way to minimise disruption as a result of a border is through the use of technology — even though this has been expressly rejected by the Government — securing a bilateral agreement with the UK on customs co-operation, and the use of mobile technology and patrols.
“Regardless of any form of agreement reached by the UK and the EU, the UK and Ireland, as the only European Single Market land border with the UK, will need to put in place some form of border and customs compliance procedures,” the report notes.
The study points to the Swedish/Norwegian border, and describes it as “the most advanced customs solutions in the world”.
In that case regulations allow for a 15km control zone on either side of the border where customs controls can take place, by either state on either state’s territory.
There are, however, 14 customs border posts, despite heavy investment in technology.
“A small percentage of goods are selected for documentary control or physical control by customs.
“The approach to controls taken by Swedish and Norwegian customs is heavily risk-based, relying on risk-management technology to identify those vehicles to undergo documentary or physical checks.”
The report states that elements of this, tuned to meet the requirements of the Irish border, can be rolled out.
The report states that domestic and crossborder coordinated border management as well as trusted trader and trusted traveller programmes can significantly reduce compliance requirements and make borders “almost friction free”.
The docuement states that there needs to be a greater use of so-called Authorised Economic Operators (AEOs). In those cases, checks are carried out in the facilities owned by those operators by customs officials, rather than at a border or port.
The UK currently has 604 AEO companies, while Ireland has just 139. By comparison, Germany has 6,000, France 1,453 and Italy 1,238.
“Customs and other border control practices that keep the border open, such as release before clearance, deferred duty payments and clearance away from the border, also help keep the border free of traffic and speed up or even remove the need for processing,” the report adds.
“Technologies such as automatic number plate recognition, enhanced drivers’ licences, barcode scanning and the use of smartphone apps can also have a significant impact by reducing paperwork and allowing pre- or on-arrival release, which can reduce or even eliminate the need to stop or undergo checks.”
The report states that at both the Norway-Sweden and the Canada-US frontiers, “low friction” borders have been created through a focus on sharing of both data and facilities, the creation of electronic environments for trade and travel and the use of modern technologies.
Of course, the Government has stressed that it will not accept a situation where what has been detailed in the report would occur.
Both Taoiseach Leo Varadkar and Foreign Affairs Minister Simon Coveney have said they want either the UK to remain in some form of customs union with the EU, or ensure there is no regulator divergence between Northern Ireland and the Republic.
The clock is ticking though and there appears to be little in the way of progress towards acheiving that.
The coming weeks will be crucial.