Government Bill confirms AEO priority for importers and HMRC to launch a new computer system, just weeks before the scheduled Brexit date of March 2019, a scenario which Civil Servants fear threatens chaos……
HM Revenue and Customs (HMRC) declaration processing service CHIEF, facilitates the efficient passage of legitimate imports and exports to and from countries outside of the EU, known as third countries.
The current CHIEF service is based on ageing technology and within the next 7 to 10 years, there will be many EU legislative changes to international trade processes.
Integrating these changes within the current CHIEF technology would be expensive and difficult to do.
HMRC wants the right service platforms in place to ensure future changes are made at the right time, in the right way, to ensure that the UK’s international trade community has the best possible operating environment going forward.
The Customs Declaration Services programme (CDS) has been established to replace the current CHIEF service.
International trade supply chain process changes needed by the Union Customs Code (UCC) and the EU Multi Annual Strategic Plan (MASP) are also included within the CDS programme.
The problem with that plan is that HMRC didn’t take into consideration Britain voting to leave the EU.
CHIEF was designed to handle 50 million transactions a year, and it’s successor, 180 million. If the Government are unable to negotiate borderless trade, transactions could increase five-fold.
Now here’s where the collision happens.
CDS is due for launch in January 2019 just two months before we leave the EU.
The head of the National Audit Office, Auditor General Sir Amyas Morse said in July that the Customs Declaration system (CDS), due to replace the legacy CHIEF platform could become a “horror show”.
Despite the critical importance of achieving deadlines and implementing these changes efficiently it was reported in March 2017 that the CDS planning team had 67 vacancies!
The government have issued their Customs Bill to prepare for the UK’s future, with soft or hard European borders, and being accredited as an Authorised Economic Operator (AEO) will play a major part in keeping the supply chain moving at this critical time.
The Chancellor, Philip Hammond, has confirmed that “The government will look at options to reduce the pressure and risk of delays at ports and airports, for example by: negotiating mutual recognition of Authorised Economic Operators (AEOs), enabling faster clearance of AEOs’ goods at the border.”
“Norman Global Logistics are AEO accredited and will use every concession available to ensure we keep our customers goods moving without interruption through and beyond Brexit”
Applying for AEO can be a long and arduous task, having to stand up to meticulous auditing of security and compliance processes before receiving the accreditation from HMRC.
95% of applications are rejected before final approval.
An AEO can expect fewer or no inspections on goods imported or exported and certain Customs regimes are only available to AEO’s.
Clearly each trader will need to consider the implications of these scenarios in 2019 and plan for the worst.