‘A lot of bad peo­ple will make money from Brexit’

A poor Brexit deal threat­ens to make smug­gling a growth in­dus­try in Ire­land, Anna Isaac re­ports

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When, in the Seven­ties, the Euro­pean Union in­tro­duced pay­ments for the ex­port of live­stock, trans­port­ing pigs over the Ir­ish bor­der be­came valu­able busi­ness. So valu­able in fact, that it be­came a wheeze; the same pigs would be wheeled round re­peat­edly in what be­came known as the “pig carousel”.

From try­ing to cir­cum­vent the ra­tioning regime in North­ern Ire­land in the af­ter­math of the Sec­ond World War – by smug­gling ev­ery­thing from but­ter to stock­ings from the South – to con­tem­po­rary ef­forts to shift heat­ing oil and to­bacco, in or­der to un­der­cut the Repub­lic’s higher kerosene prices, the black mar­ket of goods mov­ing cooks,” says Ja­son Sul­li­van, an im­mi­gra­tion lawyer in Portsmouth, New Hamp­shire, who has seen the im­pact the labour short­ages have had on lo­cal busi­nesses. “The econ­omy is start­ing to pick up, peo­ple are more op­ti­mistic and are able to go out, but restau­rants can’t find the peo­ple to serve them. If they crack down on the sea­sonal work­ers’ visas, some will go out of busi­ness.”

Norman Du­four, chef and man­ager of MC Perkins Cove, an up­mar­ket restau­rant in the idyl­lic Maine re­sort of Ogun­quit, has seen the prob­lem first hand. “We have been un­der­staffed since we opened and we are still un­der­staffed,” he says. “We have placed ads but no­body re­sponds. Ev­ery­one I speak to is in the same boat.”

Maine, a state heav­ily de­pen­dent on tourism, asked for 2,877 H2B visas, but only 700 were ap­proved.

Such is the des­per­a­tion for these visas that the ad­min­is­tra­tion was across the Ir­ish bor­der has al­ways en­joyed brisk trade.

And it could soon get brisker still. Mark Daly, a sen­a­tor with Ir­ish party Fianna Fáil, be­lieves a poorly ex­e­cuted Brexit could act as a “smug­glers’ char­ter”. He adds: “A lot of bad peo­ple are go­ing to make a lot of money out of Brexit.” Daly points out that there were only 20 bor­der cross­ings open dur­ing the Trou­bles; now there are more than 275 routes across the bor­der.

“Dur­ing the Trou­bles peo­ple made a for­tune on smug­gling, es­pe­cially with diesel,” says Daly. “It’s fore­see­able that if re­stric­tions on food change you could have the same prob­lem with Ar­gen­tinian beef.”

Since the Good Fri­day Agree­ment in 1998, the bat­tle against smug­gling has been fought col­lab­o­ra­tively by the Po­lice Ser­vice of North­ern Ire­land, the Garda (the Ir­ish po­lice) and the tax col­lect­ing au­thor­i­ties on both sides.

In a joint re­port on or­gan­ised crime, the North­ern and South­ern Ir­ish au­thor­i­ties re­vealed that fuel fraud re­mained one of the big­gest smug­gling rack­ets. Il­licit diesel was es­ti­mated to make up 8pc of the mar­ket share in re­port­edly pre­pared to of­fer more if Maine’s Repub­li­can sen­a­tor Su­san Collins backed moves to re­peal Oba­macare. She de­clined the of­fer, as did Lisa Murkowski from equally tourist-de­pen­dent Alaska.

The ex­tent of the prob­lem is dif­fi­cult to gauge. “You have to take a re­gional North­ern Ire­land in the 2013-14 fi­nan­cial year, re­sult­ing in £50m of lost taxes. The UK’S vote to leave the EU has raised the prospect of a harder bor­der in or­der to po­lice the move­ment of peo­ple and goods. Benny Gilse­nan, a Dublin shop­keeper and mem­ber of the Re­tail­ers Against Smug­gling as­so­ci­a­tion in Ire­land, is deeply con­cerned about how such changes could hurt his busi­ness: “[A per­spec­tive,” says John Quelch, dean of Mi­ami Busi­ness School. “There is a sig­nif­i­cant grey econ­omy in the US which is barely spo­ken about.” While the grey econ­omy may be plug­ging some of the gaps, in­dus­tries such as agri­cul­ture are strug­gling badly, es­pe­cially in Cal­i­for­nia.

De­spite Trump’s in­sis­tence that the US needs a wall to keep Mex­i­can im­mi­grants out, fig­ures from the Pew Re­search Cen­tre show that the num­ber leav­ing and go­ing home is higher than the num­ber ar­riv­ing to take their place. Farm­ers in Cal­i­for­nia are find­ing that they are hav­ing to com­pete for work­ers with the bur­geon­ing man­u­fac­tur­ing in­dus­tries back in Mex­ico. It has left the agri­cul­ture in­dus­try strug­gling to find enough im­mi­grants to help fill around half a mil­lion jobs.

“The farm labour con­cerns here in Cal­i­for­nia have been ris­ing mostly be­cause, as the econ­omy im­proves, po­ten­tial farm work­ers have other

‘We are not rais­ing this be­cause peo­ple find it dif­fi­cult to come, but be­cause the US econ­omy will find it hard to cope’

dis­par­ity in cus­toms du­ties] will open up a mar­ket again for the smug­gler.” He al­ready suf­fers from ex­ist­ing smug­gling ac­tiv­i­ties: “I sell a packet of cig­a­rettes at €12 (£10.68). [Smug­glers] sell it at a third of the price,” he says.

Chris Smyth, an Ul­ster Union­ist Party coun­cil­lor in Fer­managh, is also con­cerned. “Smug­gling will be­come our big­gest in­dus­try if [Brexit] goes badly. But we live in the 21st cen­tury. We’ve put men on the moon. I’m con­fi­dent that HMRC can use tech­nol­ogy to come up with a so­lu­tion,” he says.

In its North­ern Ire­land Brexit po­si­tion pa­per, the De­part­ment for Ex­it­ing the Euro­pean Union was clear that it be­lieved goods and peo­ple must be al­lowed to flow seam­lessly over the bor­der.

Neil Gib­son, the chief econ­o­mist at EY Ire­land, be­lieves fears about the po­ten­tial for fric­tion and smug­gling be­tween the UK and Ire­land post­brexit risk be­ing overblown. So­lu­tions will be found and com­mon sense is re­quired, he ar­gues. “Keep scale in mind,” he says. “Think of a bor­der in­fra­struc­ture that’s ap­pro­pri­ate to what non-com­pli­ance costs.”

Ro­bust leg­is­la­tion and on-the-spot checks, with a clear set of penal­ties, could be sim­ple and ef­fec­tive ways to en­sure com­pli­ance with any new tar­iffs, Gib­son ar­gues. How­ever, he’s clear that this would re­quire sig­nif­i­cant in­vest­ment in polic­ing.

Should the UK leave the cus­toms union, it will re­quire a big ad­just­ment at all its bor­ders just as HMRC is re­plac­ing its creak­ing CHIEF (Cus­toms Han­dling of Im­port and Ex­port Freight) im­port sys­tem.

David Davis, Brexit Sec­re­tary, has claimed that ev­ery­thing is on track for the new com­puter sys­tem to go live in Jan­uary 2019. That does not quite tally with warn­ings from the Na­tional Au­dit Of­fice this sum­mer, that “the time­line for com­plet­ing the Cus­toms Dec­la­ra­tion Se­cu­rity pro­gramme … al­lows very lit­tle flex­i­bil­ity should the pro­gramme over­run or un­ex­pected prob­lems oc­cur.”

The stakes of fail­ure are high. The 2001 foot and mouth out­break, which dev­as­tated swathes of farms, was likely caused by con­tam­i­nated meat be­ing il­le­gally im­ported in pigswill. The cost of that out­break has been es­ti­mated at some £8bn, ac­cord­ing to a Na­tional Au­dit Of­fice re­port.

Head­line costs on smug­gling fail to il­lus­trate the full dam­age on an econ­omy it can wreak. Keep­ing a func­tional bor­der with Ire­land, which al­lows for the safe and proper move­ment of peo­ple, live­stock and goods, fol­low­ing Brexit is a chal­lenge that must be ad­dressed.

Wages are on the up as Don­ald Trump’s re­stric­tions on work visas are af­fect­ing all sec­tors of the econ­omy fight­ing to fill jobs

De­mon­stra­tors dressed as cus­tom of­fi­cials set up a mock cus­toms check­point at the bor­der cross­ing in Killeen, near Dun­dalk to protest against the po­ten­tial in­tro­duc­tion of bor­der checks

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