Customs: Trading with a Third Country

Customs: Trading with a Third Country


Irish goods exporters and importers are being advised to expect delays at ports once the transition period to establish a future trading agreement between the EU and UK concludes.

At a Brexit Advisory Clinic organised by Enterprise Ireland, Carol-Ann O’Keefe, Assistant Principal Officer at Revenue Commissioners, told business leaders that it is inevitable that Brexit will generate additional costs, administration, and delays at Irish ports but much is being done by Irish authorities to minimise these.

“Once Brexit occurs, and Britain leaves the EU, it will be classed as ‘a third country’, outside the single market,” said O’Keefe. “It doesn’t matter what kind of customs union is in place, or whether there is a free-trade agreement. After Brexit, full customs declarations will be required for all goods imports and exports shipped between Ireland and the UK.

“In theory, the UK has already become a third country during the transition period, however, the UK still operates as if it was an EU member and nothing will change until the start of 2021. If the UK and EU do not establish a free trade agreement the new UK Global Tariffs will automatically come into effect. “


Customs Declarations


As ‘a third country’, goods imported from the UK will require a customs declaration and be subject to controls. Checks by customs officers may be subject to licence requirements and will, generally, be subject to payment of duties and VAT when, and where, they are brought into Ireland.

Similarly, any goods exported from Ireland to the UK will require a customs declaration when leaving Ireland, may be subject to controls and requirements. Depending on the regime implemented by the UK Government, goods may require a customs declaration on entry into the UK and will, generally, be subject to payment of duties and VAT when, and where, they are brought into Britain.

Goods shipped from Ireland to the European continent, via the UK ‘land bridge’, will be classified as transit goods, and require a customs transit declaration. The shipment will require interaction with offices of departure and destination in the EU and with Office of Transit in the UK. Transit goods may be subject to control, leaving and re-entering the EU. Goods in transit are required to provide a financial guarantee to the authorities of the country through which they pass.

Once a business begins dealing with EU customs authorities, it is classified as an economic operator and will need an Economic Operator Registration and Identification (EORI) number. An EORI number, used on all customs declarations, can be obtained online through the site.


Potential Delays at Customs


Control inspections may also be required by other Irish agencies, and their UK equivalents (depending on the regime implemented by the UK Government). These include: the Department of Agriculture, Food and the Marine (who may inspect all food and agricultural supply imports); local authority environmental health offices (who will inspect shipments of waste), and the Department of Business, Enterprise and Innovation (who may inspect dual purpose goods to ensure that they are not being exported for nefarious purposes).

“In the post 9/11 era, customs services have taken on additional responsibilities for safety and security,” said O’Keefe. “Carriers need to provide a declaration about their cargoes, so traders have to provide additional information to their logistics partners in advance of shipment. A manifest that only says ‘full load’ is not acceptable. Exporters and importers will have to engage with their logistics companies and their customs clearance agents.”

To give a sense of the administrative burden involved in making customs declarations, O’Keefe pointed to the single administrative document (SAD), which covers trade with non-EU countries. “This customs clearance document has 54 boxes that need to be filled,” she said.

All the processing is done electronically, with SADs initially entered into the Revenue Commissioner’s automated entry processing (AEP) system.


 Planning ahead for Irish exporters


Irish exporters should use a reputable third-party freight forwarder and customs clearance agency, said O’Keefe. “Generally, only large companies can afford (from a human resource perspective) to have in-house customs clearance expertise. We would advise that you start looking now.”

She also recommended that manufacturing companies examine their logistics flows and the potential impact of Brexit on both the cost of raw materials and the potential for delayed delivery.

“We’ve spoken to companies who didn’t realise that the raw materials they were getting from the UK originated elsewhere in the EU. If you can avoid buying EU goods in free circulation in the UK, you can avoid paying duties on the double.”

There is a possibility of goods being fast-tracked through ports for operators who become an Authorised Economic Operator (AEO). AEO or ‘trusted trader status’ means that shipments aren’t subject to control checks as frequently, and goods in transit do not require financial guarantees. Obtaining AEO status involves developing and maintaining quality-assured procedures that demonstrate a secure international supply chain. “There are currently 144 AEOs in Ireland,” said O’Keefe. “Acquiring AEO status can be costly and it’s not for everyone. If you are a food exporter, your exports may still be stopped for control at UK ports depending on the regime implemented by the UK Government, so AEO is not for you.”

Exporters and importers should understand what their customs obligations will be, said O’Keefe. “There is a lot of information on and you could try opening up communications with HMRC. At the very least, you should obtain your EORI number now and ascertain what tariffs you will pay. InterTradeIreland will help with tariff information and Revenue has a tariff classification unit. Usually tariffs are straightforward, but one economic operator spent years in the Court of Justice arguing over whether Kinder Eggs were toys or confectionary!”

Make sure your business is ready for Jan 1st 2021 and learn the key customs concepts, documentation and processes with Enterprise Ireland’s Customs Insights course.