Customs Safety and Security Procedures (EU Exit) Regulations 2021
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Lord Agnew of Oulton
That the Grand Committee do consider the Customs Safety and Security Procedures (EU Exit) Regulations 2021.
Relevant document: 4th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Cabinet Office and the Treasury (Lord Agnew of Oulton) (Con)
My Lords, this statutory instrument is part of the Government’s package to extend the staging in of customs controls in Great Britain. The instrument concerns safety and security declarations and will come into force on 1 July 2021. Noble Lords will be aware that the Secondary Legislation Scrutiny Committee reported the regulations as an instrument of interest in its fourth report, published on 10 June 2021.
In June 2020 the Government announced that full customs controls would be introduced in stages in Great Britain after the end of the transition period to allow businesses affected by Covid-19 additional time to meet new customs requirements. In March, after discussion with industry stakeholders, the Government decided to extend the staging in of customs controls to allow businesses additional time to prepare to meet new customs requirements.
The measures in this instrument concern the safety and security declarations aspect of that extension and should be understood in the context of our existing safety and security regime. Safety and security declarations are a standard customs process and are used, along with intelligence from other sources, in the UK’s safety and security regime.
The UK approach to safety and security is guided by the World Customs Organization’s SAFE framework of standards, which is designed to manage the risks associated with the movement of goods between customs territories. Risks in the international supply chain are mitigated by following minimum standards for customs administrations set out in SAFE. This includes the collection and risk assessment of pre-arrival and pre-departure data.
The EU implemented safety and security requirements through the UCC, which has been retained in UK law since the transition period ended on 31 December 2020. While the UK was part of the EU’s safety and security zone, safety and security declarations were required only for goods entering or leaving the EU. Since the transition period ended on 31 December 2020, there has been a requirement for safety and security declarations for goods moved between Great Britain and the EU, as well as the rest of the world.
To give businesses additional time to prepare for new customs requirements, in November 2020 the Government introduced a six-month waiver on the requirement to submit safety and security declarations on goods imported from the EU and other territories from which such declarations were not required before the end of the transition period. This waiver is in place until 30 June 2021.
The Government also introduced a statutory instrument granting time-limited powers to issue a public notice waiving or altering the requirements for safety and security declarations on goods exported from Great Britain. These powers were put in place as a contingency option to mitigate any border disruption as a result of the introduction of the new requirements.
Since the beginning of 2021 there have been public notices in force waiving the requirement for safety and security export declarations for two categories of movements. The first category is empty pallets, containers and modes of transport, where they are being moved under a transport contract to places where such movements did not attract a safety and security requirement before the end of the transition period. The second category is all roll-on roll-off movements of goods where an exit summary declaration would otherwise have been required.
As part of the extension to the staging in of customs controls, the instrument we are discussing today will extend the current waiver on the requirement for safety and security declarations for goods imported from the EU and other territories where such declarations would not have been required before the end of the transition period. This means that safety and security entry summary declarations will not be required for these movements until 1 January 2022.
Having listened to businesses’ concerns about the impact of Covid-19 on their ability to meet new customs requirements, this extension to the waiver is being introduced to give them additional time to meet these new requirements. As was the case before the end of the transition period and has been the case during the period of the first waiver, Border Force will undertake intelligence-led risk assessments of goods movements into Great Britain. There is no change to the requirements for entry summary declarations for goods imported from the rest of the world as a result of this instrument. This waiver does not create a significant increase in the security risk to the UK.
In most cases, the data that is risk-assessed in relation to goods leaving Great Britain is contained in a customs export declaration. Where such a declaration is not submitted, a stand-alone safety and security exit summary declaration is required. In response to industry feedback, since the beginning of the year safety and security declaration requirements have been waived for the two categories of movements that I discussed earlier. This has been done by the issuing of public notices, using time-limited powers introduced in December 2020. These allow the commissioners of HMRC to waive or alter the requirement for pre-departure safety and security declarations. The public notice powers that were used to introduce this waiver can be used only with regard to requirements between 1 January 2021 and 30 June 2021. As such, the Government are introducing this instrument to extend this waiver until 30 September 2021. As with imports and exports during the current waiver, Border Force will undertake intelligence-led risk assessments of goods movements out of Great Britain. As such, there is no significant short-term security risk due to the introduction of this waiver.
The Northern Ireland protocol means that there are no safety and security requirements for goods moved between Northern Ireland and the EU, and that Northern Ireland remains aligned with EU customs rules. As such, this instrument does not affect safety and security requirements in Northern Ireland. Goods moved between Northern Ireland and the rest of the world will be subject to existing safety and security requirements. Northern Ireland businesses moving goods into Great Britain benefit from unfettered access and are not required to submit pre-arrival or pre-departure safety and security declarations. Businesses moving goods from Great Britain to Northern Ireland are not required to submit pre-departure safety and security declarations.
In conclusion, these temporary waivers from safety and security declaration requirements for goods moved between Great Britain and the EU strike an appropriate balance between supporting businesses affect by Covid-19 and maintaining safety and security. Therefore, I beg to move.
Lord Agnew of Oulton (Con)
My Lords, I thank the Committee for this debate. I will seek to address the questions and observations raised, starting with those of the noble Lord, Lord Tunnicliffe.
I acknowledge that there have been some very dramatic movements in trade flows over the last few months, but I suggest that there have been exceptional circumstances, with some stockpiling, and it is hard to get a run rate at the moment. However, overall, we are encouraged by the process so far.
On the noble Lord’s query about the extension of waivers and assurances that we gave last year, we always wanted to have the flexibility to extend. I think the biggest event that has occurred since then which we were not aware of in December is the emergence of the much more virulent strain of Covid. This caused us to extend lockdown and restrict businesses’ ability to operate for longer than we would have hoped at the time.
In terms of the noble Lord’s concerns about the customs phone line, I am pleased to say that the customs and international trade helpline has been working well since the beginning of the year. The helpline has answered 97% of its calls since January, with an average speed of answer of 23 seconds. HMRC is offering this service over the weekend and on weekdays until 10 pm.
On customs agent capacity, the Government do not have a specific target or number of customs agents, because the sector is varied and made up of a number of different business models. For example, in the lead- up to the end of the transition period, we saw large investment in technology by a number of the larger intermediaries, which meant that their ability to handle declarations was well beyond that of simply adding more people. When thinking about readiness, it is helpful to think of the capacity to make declarations instead of the number of staff involved. We know that the intermediary sector has significantly increased this capacity to meet demand following the end of the transition period. The Government helped it to do this by making over £80 million in support available, including flexible grants that can be used for IT and training and recruitment. We are running an intermediary register on GOV.UK at the moment—for example, in the last two weeks, there have been 1,400 views of that page. There are 1,300 intermediaries listed on the register, of whom 93% say they have capacity, 92% say they are able to help small traders, 54% can support SPS checks and 309 can help with roll-on roll-off. We are improving the register all the time following feedback from traders and intermediaries.
The noble Lord asked whether we are likely to grant further extensions. The Government originally intended to introduce the full customs controls by 1 July but, given the impact of the pandemic, they are extending these facilitations to September and December. The Government do not plan to extend these waivers any further. Traders will need to comply with full safety and security declarations on exports from 1 October 2021 and on imports from 1 January 2022.
The noble Lord asked whether the customs issues have been kept under review during the current waiver period. With regard to any risks created by the waivers, Border Force has continued to undertake intelligence-led risk assessments and interventions on imports and exports since the beginning of the year, as it did before the end of the transition period. The noble Lord asked whether any of the risks have become a reality. During the period covered by the waivers, Border Force will continue to do as it has done up until now to protect the security of the UK, but I am happy to write to the noble Lord with figures expanding on the interceptions and work that it has been doing.
The noble Lord, Lord Bradshaw, asked about the cost of the safety and security process. Our EU exit is an opportunity for us to increase the amount of data we collect and thus the range and effectiveness of our interventions and the security of our borders. The collection of safety and security data on movements from the EU will allow Border Force to undertake additional targeting and checks on potentially dangerous goods movements from the UK. While we expect importers to face some increase in costs as a result of safety and security declaration requirements, these can vary depending on the businesses, how much they trade, and whether they use an intermediary. We do not know yet how importers will choose to manage declarations, which is often just one part of a wider customs process, and costs will also depend on factors such as the mode of transport and who the carrier is. Due to this uncertainty, an estimate of the administration burden costs for S&S declarations is not currently available.
Having listened to the feedback from businesses affected by Covid, we are providing them extra time to meet the requirements. This supports efficient customs arrangements and ensures that goods originating in the EU or UK are not subject to tariffs. Therefore, I commend these regulations to the Committee.