As the end of 2023 comes into view, it’s natural for thoughts to turn to next year, but also to look back on the year just gone. This reflective period is particularly important this year for businesses that trade internationally from or into the UK.
The last year saw the introduction of the Windsor Framework, the announcement of the new Border Target Operating Model (BTOM), the passing of the Electronic Trade Documents Act, further announcements on the implementation of the new Customs Declaration Service (CDS) and plans for new voluntary standards for customs intermediaries.
In all, it was quite the year for the industry and quite a year for updates to the control of the UK border, as the government edges ever closer to the deadline for realising its 2025 UK Border Strategy.
The Windsor Framework
In late February there was some positive news for traders, with the announcement of the Windsor Framework, replacing the existing Northern Ireland (NI) Protocol and removing uncertainty for those sending goods into NI.
It was a deal that British prime minister, Rishi Sunak, and European Commission president, Ursula von der Leyen, said would offer a “new way forward” on trade between Great Britain and NI.. It was also intended to get power-sharing restarted, allowing the NI Assembly in Stormont to reopen its doors.
The Daily Update was on hand to run through the main takeaways for traders. Business leaders also gave an initially cautious welcome to the deal, conscious that the devil, as always, would be in the detail of implementation.
October saw the implementation move a step further with the introduction of both the Northern Ireland Retail Movement Scheme (NIRMS) and UK Internal Market Scheme (UKIMS).
If traders got most of what they wanted from the deal, Unionist politicians didn’t, and to date the political aspects of the deal – and its intention to be a means to restart the power-sharing arrangements – have not been as successful. This week, the UK government has offered a new package of funding in the hope of getting the NI Assembly back up and running. Unionists have responded by saying nothing will happen this year but haven’t ruled out negotiations in early 2024.
Border Target Operating Model
From webinars in April, to a keynote address from Cabinet Office minister Baroness Neville-Rolfe at the inaugural Import Export Show in November, via a whitepaper on its implications, IOE&IT has been heavily engaged with government throughout 2023 in spreading the word about the biggest update to UK customs since Brexit.
The much-delayed Border Target Operating Model was announced in April, with an initial six-week consultation period. It succeeded the Target Operating Model which had been developed ahead of Brexit in 2020.
IOE&IT consulted members, ran webinars and fed back thoughts to government at every opportunity. The plan then had been for the new scheme to be up and running in fairly short order, with some checks on imports initially due in October 2023.
But a revised timetable was published in August, which delayed this initial batch of new checks to the end of January 2024. While the extra time to get new systems in place was widely welcomed, the further delays undermined business certainty and led the Labour opposition to write to the government to complain.
But, as Neville-Rolfe confirmed in November when she addressed the IOE&IT’s Import Export Show, there will be no further delays going into 2024. If you are not fully up to speed with the planned changes and how they may impact your business, check out IOE&IT’s handy set of questionnaires and its BTOM and Beyond whitepaper.
CDS delayed
The switchover from the old Customs Handling of Import and Export Freight (CHIEF) system to the new Customs Declaration System (CDS) is another major part of the upgrading of the UK’s customs technology.
It has been long in the planning and, some would argue, too long in the implementation. Already in place for imports, HMRC announced in the summer a new “phased approach” for the switchover of exports from CHIEF to CDS, with the final closure of CHIEF scheduled for March 2024
The news was largely welcomed as a sensible approach, allowing for a more gradual switchover, with some businesses able to use CDS for exports earlier than the new timeline. The government has since reiterated its desire for “most” exporters to be using CDS by the end of March, though “robust” exemptions processes will be in place.
Electronic documents
Another major update to UK customs was more forward-looking, as the government passed the Electronic Trade Documents Act into law. This presents tremendous opportunites for UK traders to adopt a more digital-first approach to trade, reducing the amount of paperwork that need to be completed. The Daily Update ran a mini-series of articles exploring the Act, and what it means for UK trade.
IOE&IT’s director general, Marco Forgione, described the passing of the Act as the “first day of the UK’s new digital trade future”.
Modernising authorisations
The Treasury announced a new series of measures to modernise customs authorisations alongside the chancellor’s Spring Budget in March.
The aim is to draw heavily on industry expertise, from all elements of the customs supply chain, to deliver simplified processes that maintain safety and security while reducing the burden on business.
The project is being run under the Joint Customs Consultative Committee (JCCC) with input from a wide range of industry stakeholders, including government agencies and industry.
Customs Day
If 2023 was a year packed full of updates, major announcements and plenty of consultations for the customs industry, it culminated in early December on what some called “UK Customs Day”, when a series of announcements on transit, temporary admissions, as well as the modernising authorisations project were announced. The Daily Update was again on-hand to report the details.
While it’s clear that 2023 has been a hectic one for UK customs, it is also clear that there is more change and more developments to come in 2024. As the IOE&IT BTOM and Beyond report identified, analysis of UK and EU legislation shows that over 20 separate measures will come into force between the end of September 2023 and the end of 2024.
As Forgione wrote in the foreword to that report:
“Some [of these changes] will have a direct impact on businesses, others may affect them indirectly through supply chains, delivery partners or freight forwarders.
“The UK can only reap the benefits of a world-class digital border if businesses of all sizes are equipped and armed with the right skills and knowledge. Now is the perfect time to prioritise educating people in these businesses on how to trade sustainably, safely and securely and IOE&IT stands ready to provide that help, support and training.”