Ready or not, EU Customs rules are about to change

JERSEY businesses will have to cope with rule changes due to Brexit within 45 business days, whether or not there is a final agreement, according to senior Customs officials.

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Speaking at last week’s Beyond Brexit Virtual Event, Paul Ecobichon from Customs said it was a complex issue requiring attention by all companies.

A last-minute deal could mean goods transported between the EU and Jersey could remain tariff-free, but there would still be a lot of paperwork to cope with, he said. If there is not an eleventh-hour deal, then the amount of paperwork is likely to increase and be compounded by tariffs as well.

‘Most goods might be tariff-free but there is still an awful lot of bureaucracy and paperwork that goes with it,’ Mr Ecobichon warned.

Direct trade with the UK will not be affected, but if businesses trade with the EU they need to understand their supply chains and if that includes transit through the UK, then they have to prepare for clearance there. A Customs declaration will be needed and that requires more information than a simple GST declaration and includes the value of the goods and country of origin.

There is an online Customs platform to help, but Mr Ecobichon advised that staff should be trained in the correct procedures or else find a Customs agent in the UK – all of which could lead to extra costs.

If goods from the EU come via the UK, they also have to be cleared at the point of entry in the UK, and then transported down to Jersey using an authorised transit operator so that duty and VAT are suspended on those goods. This could be the importer themselves, as long as it is agreed with Customs in Jersey.

The option of importing through St Malo also needs discussion with local Customs officials to ensure smooth passage, and one acronym local businessmen will become familiar with is EORI, the Economic Operator Registration Identification. Although this is primarily used as a VAT reference in the UK, some traders are using EORIs to identify the business making the shipment. The webinar was told that local Customs do not think this is necessary for Jersey importers, but if there is any doubt then it might be advisable to register online for such an identification.

Several local businesses are also planning to start up as Customs agents, and these will be listed on the Customs’ website.

Simon Blackmore, a senior officer at Customs, said that the priority for local businesses was to speak to their suppliers.

‘They should find out where the goods originate, so if the goods do originate from the EU or a third country, that supplier in the UK is clearly going to have some administrative costs to add to their business model,’ he said.

‘That could then influence the price that traders pays for those goods and that may be reflected in the price the customer pays when the goods are sold in Jersey.’

These implications should be considered now, as businesses do not want to be discovering the impact of the changes on 1 or 2 January, Mr Blackmore warned.

Graeme Smith, the chief executive of Jersey Business, which hosted the webinar, said that businesses would also have to assess the impact of the rule changes on their cashflows. These were already under strain due to the pandemic, he said.

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