Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the White Paper, The future relationship between the United Kingdom and the European Union, Cm. 9593, published on 12 July 2018, what types of goods will be excluded from the proposed Facilitated Customs Arrangement with the EU.

The Facilitated Customs Arrangement (FCA) would remove the need for customs processes between the UK and the EU, while allowing the UK to set its own tariffs for goods imported from non-EU countries.

Where a good reaches the UK border, and the destination can be robustly demonstrated by a trusted trader, it will pay the UK tariff if it is destined for the UK and the EU tariff if it is destined for the EU. This is most likely to be relevant to finished goods.

Where a good reaches the UK border and the destination cannot be robustly demonstrated at the point of import, it will pay the higher of the UK or EU tariff. Where the good’s destination is later identified to be a lower tariff jurisdiction, it would be eligible for a repayment from the UK Government equal to the difference between the two tariffs. This is most likely to be relevant to intermediate goods.

The government is seeking to maximise the number of traders who will not need to interact with a voluntary repayment mechanism. It is estimated up to 96 per cent of UK goods trade would be most likely to pay the correct or no tariff upfront.