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Border Operating Model UK border changes from 1st January 2021 Impact on flow of UK-EU goods AGENDA ❑ How we got here ❑ Trade agreement landscape before and after 31st December 2020) ❑ UK Government’s Border Operating Model – Explained ❑ Importers: phased implementation; facilitations and simplifications; actions ❑ Exporters: no phased implementation; immediate requirements; facilitations and simplifications; actions ❑ Available information and support TRADING IN GOODS CURRENTLY (EXAMPLE) FACTS AND HOW WE GOT TO WHERE WE ARE NOW HOW WE GOT HERE 29th January 2020 30th June 2020 European Parliament gives UK declines to request an its consent to the extension to the transition 22nd October 2019 withdrawal agreement; period by date mandated Revised withdrawal subsequently concludes by in Article 132 of the 23rd June 2016 22nd March 2019 agreement is cleared first the Council of the Withdrawal Agreement. UK votes to leave UK and EU agree on an stage in UK Parliament – European Union on 30th Transition period end 31st the EU initial extension GE election called. January 2020. December 2020 rd st 29th March 2017 11th April 2019 23 January 2020 31 January 2020 UK serves notice of its EU extends the date of the UK Parliament ratifies the UK officially leaves the EU withdrawal to the EU exit until 31st October agreement by passing the and 11-month transition starting a two-year process 2019. This is done at the Withdrawal Agreement Act period began whereby the UK would request of and in automatically leave the EU agreement with the UK on 29th March 2019 IMPACT OF NO AGREEMENT BY 31ST DECEMBER 2020 Withdrawal Agreement ratified 23rd Jan 2020 Transition period expires on 31st Dec 2020 and gained EU consent on 29th Jan 2020 without a Trade deal being agreed ❑ UK officially left the European Union ❑ UK becomes a 3rd country in the eyes of the EU ❑ EU law continues to apply ❑ Access to Single Market & Customs Union is withdrawn ❑ UK and EU content continues to count toward the rules ❑ Use of Free Trade Agreements is withdrawn of origin requirements in EU trade agreements ❑ EU law ceases to apply ❑ UK maintains “de facto” membership of the Single ❑ UK legal framework does not currently include all Market & Customs Union provisions ❑ Transition Period in place until 31st December 2020 ❑ Customs declarations become mandatory for trade with ❑ UK remains bound by obligations stemming from all EU the EU international agreements ❑ Customs Controls are implemented for EU trade ❑ UK is no longer represented in EU institutions, agencies ❑ Rules for third countries apply and bodies ❑ Sanctions, Embargoes, Restricted Party Screening no ❑ Common External Tariff continues to apply longer apply ❑ Customs Declarations are not required ❑ Significant impact as all rules collapse overnight ❑ EU Free Trade Agreements continue to apply, until advised otherwise ❑ Union Customs Code and relevant laws continue to be applied as before ❑ Export Control Law continues to apply ❑ Sanctions, Embargoes, Restricted Party Screening continue to apply TRADE AGREEMENT LANDSCAPE CURRENTLY AS PART OF EU TRADE AGREEMENT LANDSCAPE POST 31ST DECEMBER 2020 Country or bloc Total UK trade with countries, 2019 (£ million) Andean countries 2,904 CARIFORUM trade bloc 3,243 Central America 1,441 Chile 2,148 Cote d’Ivoire 401 Eastern and Southern Africa (ESA) trade bloc 1,626 The Faroe Islands 295 Georgia 178 Israel 5,125 Jordan 534 Kenya (in principle) 1,439 Kosovo 9 Lebanon 820 Liechtenstein 122 Morocco 2,472 Pacific states 178 Palestinian Authority 11 South Korea 11,659 Southern Africa Customs Union and Mozambique (SACUM) trade bloc 12,121 Switzerland 38,579 Tunisia 611 Ukraine 1,533 22 “rolled over” trade deals covering 50+ countries represents just around 10% of total UK trade. In addition to new UK-Japan FTA agreed NEW BORDER OPERATING MODEL PREPARATIONS AND CHANGES BORDER OPERATING MODEL – EFFECTIVE 1ST JANUARY 2021 Principle: “In light of COVID, a phased approach to the implementation of full border controls on imports coming into GB from the EU” In practice: ❑ Updated October 2020 ❑ Phased approach for imports (1st January, April, July 2021) ❑ Export requirements effective from 1st January 2021 ❑ Customs declarations (Imports and exports) ❑ Customs duties (Imports) ❑ VAT (Imports) ❑ Safety and Security Declarations (Imports and Exports) ❑ Additional requirements UK BORDER INFRASTRUCTURE CHANGES Changing infrastructure requirements from January 2021: ❑ Common Transit Convention (CTC) processes: Offices of Departure and Destination to start and end CTC movements, including the issue of Transit Accompanying Documents (TADs), and facilities for Office of Transit compliance checks ❑ ATA Carnet processes: Offices to wet stamp ATA Carnets for temporary imports and exports ❑ CITES processes: Ability to wet stamp CITES permits accompanying relevant goods ❑ Traffic management processes: Lorry holding capacity for use in the event of disruption GOVERNMENT SYSTEMS MAP ❑ Guidance: Resources to help provide relevant border information ❑ Permission: Granting of licenses and permits as required ❑ Notify: Handling of transactional information relating to border movements ADDITIONAL ❑ GB-wide Port Infrastructure Fund (PIF) ❑ Haulier readiness – information and advice sites ❑ Register a Trailer (DVLA) ❑ Check an HGV is Ready to cross the Border (prev. Smart Freight) ❑ Sanctions: Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act) and existing EU sanctions regimes NOTE: ❑ Border operating model does not include infrastructure changes for Wales and Scotland ❑ Flow of GB and NI goods under the Northern Ireland protocol is not covered in the Border Operating model: o See separate guidelines - https://www.gov.uk/government/publications/moving- goods-under-the-northern-ireland-protocol o Sign up to Trader Support Service - https://www.tradersupportservice.co.uk/tss NEW BORDER OPERATING MODEL IMPORTED GOODS STAGE 1: NON-CONTROLLED AND CONTROLLED GOODS NON-CONTROLLED (STANDARD) GOODS ENTRY IN DECLARANT’S RECORDS DATA: Declarations: ❑ Customs procedure code ❑ Declaration unique consignment reference (audit ❑ Full (or simplified if authorised) declaration on entry to GB trail through commercial records) ❑ Delayed declaration ❑ Purchase and sales invoice numbers o Entry In Declarant’s Records – Simplified Customs Declaration authorisation required ❑ Date and time of entry in records – creating the tax (trader or agent) point, which is used for working out VAT payments o Duty Deferment Account (DDA) required and Customs Comprehensive Guarantee later (CCG) if liability over £10K/month ❑ Any temporary admission, warehousing or temporary storage stock account references o Not available when making a Simplified Frontier Declaration ❑ Warehouse approval number o Not applicable for non-Union status goods or goods not intended for free circulation ❑ Written description of the goods in GB ❑ Customs value ❑ Quantity of goods i.e. number of packages and items, o Not available to company’s at risk of insolvency or with poor HMRC compliance net mass Groupage loads ❑ Details of licensing requirements and license Import VAT: numbers ❑ Full (or simplified if authorised) declaration on entry to GB - VAT registered can use ❑ Details of any supporting documents, including the Postponed VAT Accounting; Non-VAT registered can use DDA serial numbers, where appropriate ❑ NB: If an agent making a declaration on behalf of ❑ Delayed Declaration – VAT registered must use Postponed VAT accounting; Non-VAT someone else, details of the person being registered can use DDA represented Consignments below £135: ❑ Import VAT no longer due at border ❑ Low Value Consignment Relied (LVCR) withdrawn ❑ VAT added at point of sale (accounted for in quarterly VAT return) CONTROLLED GOODS Declarations: ❑ Full declaration on entry to GB ❑ Simplified Customs Declaration (if authorised): Entry in Declarant’s Records (EIDR) or Simplified Declarations Procedure (SDP) Import VAT: ❑ Full (or simplified if authorised) declaration on entry to GB - VAT registered can use Postponed VAT Accounting; Non-VAT registered can use DDA STAGE 1: GOODS WITH ADDITIONAL REQUIREMENTS Goods with “Additional requirements” Goods covered by International Conventions / Goods subject to Sanitary and Phytosanitary Controls Commitments ▪ Endangered Species of Wild Fauna and Flora (CITES) ▪ Animal products (Animal By-Products and Products of Animal Origin under safeguard measures only) ▪ Fluorinated Greenhouse Gas (F-Gas) and Ozone- ▪ Additional requirements for fishery products and live bivalve mollusks Depleting Substances (ODS) ▪ High-Risk Food and Feed Not of Animal Origin (HRFNAO) ▪ Rough Diamonds (Kimberley Process) ▪ Live animals and Germinal Products ▪ Temporary import of non-perishables (ATA Carnets) ▪ Live aquatic animals for aquaculture and ornamental purposes ▪ Equines ▪ Plants and Plant Products Measures Measures ▪ CITES permit (APHA), routed through designated point of ▪ High-risk Animal By-Products (ABP): Import pre-notifications; Pre-authorisation by Defra/APHA; accompanied by entry (PoE) official ABP documentation - https://www.gov.uk/guidance/animal-by-product-categories-site-approval-hygiene- ▪ F-Gas goods: Must be registered on GB HFC registry, and-disposal implications on quota, any point of entry ▪ Most imports of marine-caught fish and some shellfish will need to be accompanied by a Catch Certificate (and ▪ ODS goods: Must be registered on GB ODS Licensing other relevant IUU fishing documents as required) System, valid import license, any point of entry ▪ Direct landings
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