Britain sketches out customs powers if Brexit deal fails

A 'vintage' border post at Strabane, which straddles Ireland and Northern Ireland. [@LeftFootFwd Twitter]

Britain on Monday (9 October) outlined proposals for new laws to set tariffs and quotas including if Britain leaves the European Union with no agreement in place, as it prepares for a post-Brexit customs system.

The government said the draft legislation to be put forward this autumn would allow for “a standalone customs regime from day one” in case there is no deal between British and EU negotiators by 2019.

The rules would allow the government to set tariffs and quotas and establish a goods classification system in line with the government’s obligations as a member of the World Trade Organisation (WTO).

The proposals for a customs bill were published alongside those for new trade legislation that would allow Britain to enter into new international free trade agreements once it has left the EU.

Speaking to parliament, Prime Minister Theresa May said the proposals “pave the way for legislation to allow the UK to operate as an independent trading nation” and establish an “innovative” customs system.

“While the UK hopes and expects to achieve a negotiated settlement that is in the interests of all parties it is only prudent that the government prepares for every eventuality,” the proposals said.

The government warned that businesses that currently only trade with the EU would be subject to customs declarations and customs checks for the first time after Brexit if there is no negotiated agreement.

“Imported goods would be liable to customs duty and import VAT. Certain goods may require import or export licences, and traders exporting to the EU would have to submit an export declaration,” it said.

The government said it was “actively considering” ways in which to mitigate the impact in such a scenario and said its priority was ensuring that UK-EU trade would be “as frictionless as possible”.

It also said the new customs rules should avoid a hard border between Ireland and Northern Ireland and establish an independent international trade policy.

In a foreword to the customs paper, Finance Minister Philip Hammond also underlined the importance of a transition period after Brexit to allow businesses to adjust to new rules and avoid a “cliff-edge” scenario.

May has raised the prospect of a two-year transition.

“It takes time to negotiate trade deals and even more time to build new trading relationships; and adjusting to different customs, VAT and excise systems cannot happen overnight,” Hammond wrote.

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