By Giles O’Neill, Brexit Unit Manager, Enterprise Ireland.
Regardless of the outcome of the current negotiations on a Brexit deal, our trading relationship with the UK will change fundamentally and irrevocably on January 1st. While the Brexit process may have been plagued with uncertainty up until now, the only absolute certainty in relation to the trading relationship is that exporting goods to or importing goods from the UK (excluding Northern Ireland) will require a customs declaration from January 1st 2021.
That will present a massive challenge for Irish businesses. To put its scale in context, nearly 100,000 Irish businesses trade with the UK at the moment. At present, Irish businesses generate around 1.7 million customs declarations annually, but that will rise to 20 million next year as a result of Brexit.
Goods won’t move without a declaration. There are around 60 points of data in a customs declaration and these are connected to various aspects of the shipment right down to the pallet. If you get one piece of data wrong, then everything slows down or stops.
While some elements of the customs declaration process will be automated, the new situation will generate a requirement for an additional 2,000 trained people in the area.
The government has put in place a new €20 million Ready for Customs fund managed by Enterprise Ireland to assist Irish businesses to meet this challenge.
The Ready for Customs fund provides grants of up to €9,000 for each new full-time employee engaged in customs work. Businesses which employ a new person to deal with customs on a part-time basis can get a grant of up to €4,500. The grants can be used for recruitment costs, employee costs and the provision of IT infrastructure.
The urgency of the situation cannot be overemphasised. If someone told you that you are not going to be able to do business with your customers in the same way, that it’s going to be more difficult to deliver to them, more costly, and definitely not as easy as it used to be, you’d be concerned. If someone told you that it was going to happen in about 100 days’ time, you’d be very worried indeed.
It is quite understandable that people have become distracted by the minutiae of the Brexit negotiations and the noise surrounding them. It is even more understandable if they have spent most of their energies dealing with Covid-19 for the past eight months.
But that doesn’t remove the stark reality that the United Kingdom will become a third country as far as trade with the EU is concerned from January 1st 2021. And no trade deal, however all-encompassing and liberal, will remove the need for customs declarations.
Of course, many companies use third party logistics providers or freight forwarders to look after customs declarations on their behalf, but they should not rely on that situation continuing beyond January.
Companies need to reach out to those partners and ask them if they have the capacity and the resources to continue to do the customs declarations in 2021. The very last thing businesses want to see is shipments stuck at ports in January because logistics and freight forwarding partners have been overwhelmed by the sheer volume of extra work created by Brexit.
Businesses who wish to avoid such a situation or want to ensure they can continue to provide customs services to clients should apply now for the Ready for Customs grant.