Making social science accessible

30 Jan 2024

Economy

UK-EU Relations

Following a long series of delays, the government has implemented the first phase of its post-Brexit border controls on animal and plant products coming from the EU.

This explainer sets out why controls are needed at the GB-EU border, what controls the UK is introducing, and why they have been delayed.

What changes did Brexit necessitate at the GB-EU border?

On 31 December 2020, UK officially left the single market and customs union. As a result, the UK and the EU are now in separate customs and regulatory regimes.

On 1 January 2021, the EU applied its usual third-country customs and regulatory regime to goods imported from Great Britain (GB) to the EU, to ensure the correct taxes (e.g., tariffs, VAT and excise duty) are paid, safety and security obligations are fulfilled, and that they meet relevant standards in areas such as food safety as well as disease control. This means that businesses in Great Britain exporting their goods to the EU currently face border checks. These checks are particularly intrusive in the case of food exports.

But although the UK introduced some new customs formalities, it has repeatedly delayed applying its own third-country customs and regulatory regime to goods entering from the EU. That means GB businesses have been subject to certain paperwork and costs which EU businesses exporting to the UK largely avoid.

Does the UK have to implement full border controls on EU imports?

There has been pressure on the UK government to implement full import controls on EU imports for a variety of reasons.

First, the UK’s failure to control EU imports in the same way as it does on other trading partners could be deemed as giving the EU unjustified preferential treatment and, therefore, violate WTO rules.

Second, there has been alarm among some industries, such as the veterinary sector and domestic food producers, that the absence of full controls is making the UK vulnerable to food fraud and animal disease.

“Stricter controls on UK exports to the EU compared to EU imports into the UK has put British domestic industries and suppliers at a disadvantage.”

Third, stricter controls on UK exports to the EU compared to EU imports into the UK has put British domestic industries and suppliers at a disadvantage. This is because it creates an ‘uneven playing field’ for British traders, such as farmers, as they are subject to expensive and time-consuming checks on their exports to the EU, while competing businesses in the EU can export to the UK without similar barriers.

Why has implementation been delayed?

The implementation of full border checks of imports from the EU had previously been officially delayed five times (in March 2021September 2021December 2021April 2022 and August 2023).

A variety of different reasons have been given, including giving businesses more time to prepare following disruption caused by the pandemic, and avoiding further disruption while the Northern Ireland Protocol remained unresolved. The reported explanations for the most recent delay were to give businesses more time to adapt to the new rules, and concern that introducing the controls now would add to the already high inflationary pressure.

Some predicted that a delay to the introduction of the controls planned for October 2023 was inevitable because of the lack of awareness among EU businesses about the controls, possibly due to a false sense of security on account of the UK’s slow introduction of post-Brexit border controls, and the absence of a government support service for importers to give firms guidance on new regulations.

What changes have been implemented so far?

Since January 2022, imports from the EU have had to be accompanied by relevant customs declarations and upfront payment of necessary tariffs, but most import controls remained un-implemented.

In August 2023, the government announced the final draft of its Border Target Operating Model (BTOM). This sets outs how the UK will introduce full controls on imports coming into GB from the EU, in three phases:

  • 31 January 2024- Health certificates and phytosanitary certificates will be required for imports of ‘medium risk’ animal products, plants, and plant products (such as raw/chilled/frozen meat and dairy products, and some fruit and vegetables) as well as ‘high risk’ food (predominantly live animals) and feed of non-animal origin from the EU.
  • 30 April 2024- Documentary checks (ensuring goods have correct paperwork e.g., health and phytosanitary certificates), physical checks (ensuring goods meet sanitary and phytosanitary rules), and identity checks (verifying that the goods in the consignment are those that are on the documentation) will be made on ‘medium risk’ animal products, plants, and plant products as well as ‘high risk’ food and feed of non-animal origin from the EU.
  • 31 October 2024- Safety and Security declarations will have to be made for EU imports.

The government estimates the cost to businesses from dealing with the new border controls to be £330m per year, though it argues that this is less than half the cost of its previous plan (on account of reduced complexity and paperwork).

For example, it includes plans for some controls to be carried out away from borders, the launch of a pilot trusted trader scheme to allow regular importers to avoid full custom checks (with plans for this to be extended to some SPS checks after trials), and for minimal routine border controls to be applied to ‘low risk’ consignments such as fruits and vegetables, processed foods, and shelf-stable products.

This is backed by a commitment for £1 billion in the current spending review period to ‘transform’ the UK border, by investing in technological advancement such as around data collection, many of which are also part of the UK’s wider 2025 Border Strategy.

A key part of this are the plans for the UK’s new Single Trade Window, which aims to streamline the process of collecting data on goods moving between borders. The government says that the window will mean that traders will only once have to submit necessary information relating to imports and exports to a single digital hub. Currently, many traders have to upload forms to multiple different systems, which are managed by different border agencies.

However, some industry leaders have expressed doubt about the extent to which some of these new measures will prevent disruption. For example, some have been critical of the proposed timeline for the trusted trader scheme, suggesting that it will only be effective in alleviating disruption after at least a year. Others have pointed to the fact that ‘low risk’ consignments already have relatively light touch requirements, thus limiting the extent of disruption really being avoided by the new border model.

How will the new controls impact imports from the EU?

Three potential outcomes of the new border controls have been predicted:

First, foods industry bodies have predicted that the controls, as currently set out, will lead to an increase in food prices. This is due to the costs to businesses of meeting certification and custom declaration requirements as well as the increase in the flat-rate inspection fee (from £20 to £43) to be charged on each consignment of food coming from the EU. It is expected that businesses and traders will then pass on these costs to consumers, causing food prices to rise.

The Cabinet Office stated last August that the plans will have a ‘minor’ impact on headline inflation, estimating that it would increase the rate by less than 0.2% over three years.

“Some expect that many EU businesses will stop or reduce their exports to the UK”

Second, some expect that many EU businesses will stop or reduce their exports to the UK due to the increased time and cost required to provide all of the newly required paperwork. When the EU implemented their full border controls on goods arriving from Great Britain, many UK businesses reacted in that way – and the UK is a less significant market for EU suppliers than the EU is for UK ones.

Some sectors are particularly exposed to the risks of supply disruption, for instance the British meat industry, which imports around half of its pork from the EU. Trade associations warn that a lack of vets in the EU (who are needed to sign off consignments) could curtail supplies.

The new controls are also likely to be especially challenging for small EU businesses, who may lack the resources to complete the necessary paperwork and face the same flat-rate inspection fee as bigger firms exporting much larger consignments. This could mean that goods from many smaller EU producers disappear from British shelves.

The Chilled Food Association has also warned that, for certain products, the new UK health certificates do not meet industry standards. This means goods such as liquid eggs mixed with sugar – of which UK businesses imported 20,000 tonnes from the EU in 2022, for use in things like sauces and baked goods – are no longer importable from the EU.

Third, the new controls could lead to delays in moving goods through the GB border, which poses a particular threat to perishable supplies. The new requirement to pre-notify UK authorities about a shipment by 24 hours could – if not done properly – leave highly perishable meat produce waiting almost a day for inspection. The new physical inspections of plants at border control points (rather than at delivery point) could also lead to them perishing as they wait to be inspected – affecting both flower sellers and agricultural businesses which import seedlings from the EU.

Are businesses now ready for the new import controls?

The Institute of Export and International Trade reports that just over half of the businesses it questioned are apprehensive about the new checks, though participation in this survey appears to have been self-selecting. The group also reports that the level of preparedness among those it questioned has decreased in recent months.

Key uncertainties for businesses are whether they will be able to shoulder the costs of the new administration, find the necessary vets to complete paperwork, and the risk of produce perishing or being damaged during extended processing.

They were also taken by surprise when, a week before the new model took effect, the government re-classified a range of fruit and vegetable produce as medium-risk (rather than low-risk) rendering them subject to the new paperwork requirements. One industry group says this will add £200m to the cost of imports. Moreover, on the eve of controls taking effect, the UK still hadn’t decided what risk group certain other goods would be placed in, making it likely that some EU producers will not have the necessary paperwork or processes ready for day one of the new regime.

Belfast harbour

Does this affect the operation of the GB-NI border?

The movement of goods from Great Britain to Northern Ireland are covered by the NI Protocol/Windsor Framework, so are not affected by the Border Target Operating Model.

For goods moving from Northern Ireland to Great Britain, the UK unilaterally committed to unfettered access for NI goods moving into the GB market in the Internal Market Act. However, this applies only to ‘qualifying Northern Ireland goods’ and, for now, the system for those goods remains unchanged.

The definition of ‘qualifying Northern Ireland goods’ also largely remains the same. But new arrangements will apply for traders moving food and feed products, which will need to be owned or processed in Northern Ireland by a NI registered food or feed business to be considered a qualifying good.

The new proposals make clear that unfettered access applies both to goods coming into GB directly from Northern Ireland and for NI goods coming to GB via Ireland. But the document also sets out how controls will be phased in on non-qualifying goods in two stages next year. It also notes the government will need to take measures to ensure that the scheme is not abused.

By Joël Reland, Research Associate, and Peter Jurkovic, researcher, UK in a Changing Europe.

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