UK seafood companies shipping to the European Union are being advised to outsource as much of their customs paperwork requirements as possible with the deadline looming for the United Kingdom's departure from the trading block.
The adoption of new customs regulations following the United Kingdom's expected departure from the EU on Oct. 31 is expected to be an operational headache for seafood companies both exporting to and importing from the EU.
"For companies with less experience or which simply do not feel comfortable to deal with border formalities, I would certainly advise to outsource as much as possible. Customs formalities can be highly complex and risky," Dominique Willems, senior manager at the European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT), told IntraFish.
This may be especially important in the case of fisheries because of special rules and regulations where origin, sanitary and phytosanitary (SPS) checks may be involved.
No deal Brexit a significant challenge
"Unless we leave with some sort of transitional period, the EU will treat us like any other third country from day one," Andrew Kuyk, director general of the UK Seafood Industry Alliance trade group said. "That means a range of new paperwork, including permits for lorry drivers, export declarations, health certificates and (for fish) IUU certificates as well."
Getting the right customs code for individual products is part of this – and something people won't necessarily know if they have previously only traded with the EU, Kuyk added.
Customs clearance specialists should be able to help with much (but not all) of this, although Kuyk, among others, warns they are already in short supply and simply may not available.
"This is a significant challenge for dealing with a no-deal Brexit because over the past few years there has already been an increase in the demand for services provided by customs brokers and freight forwarders, leading to a shortage in employees with sufficient skills and knowledge − putting additional pressure on an already-demanding operating environment," Willems said.
For fish in particular, 80 percent of what the UK fleet catches is currently exported, mostly to the EU. The majority of those operators are unlikely to have had direct experience exporting to other destinations, and they will face a steep learning curve, said Kuyk.
"It is also unlikely they will find alternative markets in the UK, at least in the short term. So there will be a significant problem, especially for live or short shelf-life products where delay could make them unsaleable," he said.
The UK's Road Haulage Association (RHA) says the government is facing a huge challenge preparing business in time for a no-deal Brexit.
Its warning coincides with UK Finance Minister Sajid Javid's pledge to provide funding and additional staff at the border to ease the transition.
RHA chief executive Richard Burnett said that action from the government is welcome but warned that it will be a tall order to get businesses ready and new border staff recruited and trained in time for Oct 31.
“This is big picture, and what we badly need is detail. We need a complete, practical how-to guide to ensure traders know what they have to do to get across the borders after Brexit.”
As delays and disruption are almost a certainty, companies are being advised to face that fact and prepare themselves, their customers and other partners for those delays and extra costs.
"Even if it is just mentally," Willems said.
Assessing the options
Companies already familiar with third-country trade and the accompanying border procedures, should assess how much more capacity would be needed and what additional efforts should be taken to keep goods moving, according to CLECAT's advice.
For example, where goods now move by truck with a ferry, companies may want to consider moving goods in a container with short-sea shipping. At the same time, it is also important to take into account local procedures at ports and terminals because it is not just customs or other border authorities that have requirements and procedures.
While procedures can be dealt with within a few minutes electronically, in order to be able to deal with the formalities this requires substantial investment in knowledge, IT systems, permits and financial guarantees.
An intermediary such as a customs clearance still remains reliant on the information provided by its customers, meaning, should information be incorrect or incomplete, things can still go very wrong.
Businesses will need to have incoterms (International Commercial Terms) in place from day one. Although not an official contract, these set out who holds responsibility for consignments at various stages of a product's journey, including if it is rejected, as well as costs and risks.
Over the past two years, various measures have already been taken to soften the blow of a no-deal Brexit by both government authorities and the private sector.
Port operators, transporters and freight forwarders have started "good" cooperation initiatives to ensure that, for example, any delays at ferry terminals or the Eurotunnel can be minimized or at least managed in the best possible way, Willems said.
UK seafood consignments arriving in France from the United Kingdom may benefit from a new fast lane customs system designed to ease the passage of goods to the continent, once the United Kingdom leaves the EU, IntraFish has learned.State of readiness
Officials on the European side at the ports of Calais and Boulogne-sur-Mer, Europe's main seafood processing hub, have been expressing their preparedness for Brexit since before end of March when then former British Prime Minster Theresa May requested an extension to try to get lawmakers to finally agree on the terms of her country's departure.
Provided paperwork checked electronically or manually during the nearly 2 hour journey across to France is in order, seafood consignments arriving in the French port of Calais will be given a green light because all customs and phytosanitary checks will be done at the Border Inspection Post in Boulogne sur Mer, 35 miles (22 km) away, and not Calais.
Once they have cleared customs and passed the health checks in Boulogne-sur-Mer, consignments are then in free circulation meaning they can be distributed to anywhere in the European Union.
Third-country imports into the EU are subject to 100 percent documentary checks. In terms of physical checks, the check rate varies depending on the seafood product.
Bigger impact than Brexit
UK officials are seeking clarity on a requirement on the French side for all containers to carry bolt container seals, because not all British trucks have the capacity to use the seal.
While goods can be declared, (automatically) checked and released within a few minutes, procedures actually rarely take place at the physical border, most are done inland or at a distance electronically. But this still requires substantial effort for preparedness, Willem said.
What remains worrying in Willems' view is the preparedness of smaller, traders and haulers who have limited experience in trading with third countries and dealing with customs formalities.
Often border procedures are depicted as they were 30 years ago when the borders opened and paper-based procedures were completed manually at the external border.
Many of these companies still expect customs formalities to work like this, sending their drivers to border points with a stack of papers, expecting to find a customs officer who will manually process the declaration and inspect the goods leading to fears of delays and disruption at borders.
To combat this in Rotterdam, for example, companies will simply be turned away from port terminals if they have not yet fulfilled their customs formalities electronically in advance. There will not even be a possibility to fulfill the requirements at that port. Special parking spaces have been created around Rotterdam for these cases.
Trade has become more complex in the past few years with developments such as trade-wars and new EU trade agreements such as those with Japan and Canada and much stricter measures covering, for example, anti-terrorism or food health and safety or environmental protection.
All of this requires increased human resources, while at the same time all fundamental legislation in the EU concerning trade of goods across borders is “under construction."
"For example, the EU is currently fundamentally renewing Customs, VAT and SPS legislation, changes that might have an even bigger impact than Brexit. And then on top of all of this, there is Brexit. Again requiring thousands of customs and trade specialist, which simply do not exist today," Willems said.Import rules
Back on the United Kingdom side, one thing is clear. In the event of a no-deal Brexit, any businesses currently moving goods freely between the United Kingdom and the EU will have to comply with new rules and regulations. Declarations must be made to Her Majesty's Revenue and Customs (HMRC), and duty payments must be made on any applicable goods and services.
Filling in a full declaration can be time consuming, and could cause goods to be delayed at the border as declarations are processed. Under regular import processes, goods are not released from customs control until all duties are paid and a full import declaration is made.
- Have an EORI number
- Have a Unique Taxpayer Reference (UTR)
- Be established in the UK
- Be importing goods from the EU into the UK – this includes goods from outside the EU which have cleared EU customs formalities on the way to the UK
Among measures being put place aimed at reducing congestion at customs checkpoints Transitional Simplified Procedures (TSP) are being introduced by HMRC, allowing businesses to defer full import declarations until a later date.
Duty payments can also be deferred under TSP, providing businesses with a way to manage their finances more effectively when dealing with unexpected costs associated with customs declarations.
If tariffs apply to the goods being imported, companies must apply to defer any payable duties as well as have a financial guarantee in place by Sept. 30 2019, according to customs clearance experts Langdon Systems.
Duty payments can be deferred, allowing companies to make all their payments in one transaction.
- The only goods you are importing are coming directly from outside of the EU
- Your business uses a customs special procedure when importing goods
- You are acting on behalf of a trader
- You have unpaid tax or duty, you have had overdue tax returns, or your business is insolvent