At a Customs, International Trade and Excise Committee workgroup, HMRC reported to the excise industry on their current contingencies for Brexit and the likelihood that the EMCS (Excise Movement Control System) will remain in place.
For many people involved in the excise industry, with the current EMCS system being a pan-European system, the biggest Brexit question has been "how will it be possible to move duty suspended goods from one premises to another?". Many people we spoke to even entertained the idea that we may see the return of the old AAD documents.
During a meeting of the Customs, International Trade and Excise Committee on the 28th February, Mike Gilmore from HMRC stated:
"HMRC was not yet permitted to speak in detail with business as this could undermine the UK’s negotiating position." However he said that "HMRC was working on the basis that on exiting the EU the same broad principles that currently apply would continue, for example, duty-suspended movements and drawback. At this stage it should be assumed that EMCS would only be permitted for movements wholly with the UK – future UK SEED would need to be considered." He added that "there could be flexibility if the UK is not bound by EU directives, for example on excise structures. HMRC excise policy will work with Customs policy on ‘Brexit’. HMRC has set up an EU Transition Unit (led by Director Cerys McDonald) and would work closely with the Department for Exiting the EU (DEXEU)."
What would a UK only EMCS system look like?
Reading further into Mike Gilmore's comments, especially 'we can assume the same broad principals would apply' & 'only be permitted for movements wholly with the UK' we can assume:
- Goods moving to a UK port for permanent export would still require an EMCS ARC.
- Goods moving from a UK port to a UK excise warehouse would still require an EMCS ARC.
- Goods moving between UK warehouses or to a UK registered consignee would still require an EMCS ARC.
The main difference to the current system would likely be, with a new UK border in place, goods passing it would officially be classed as exports or imports, so the same rules which currently apply to shipments to and from non-EU countries would apply to EU countries. For example, UK excisable goods bound for Germany would require an ARC to cover the suspension of UK duty for the transit to the UK port. Once the goods reach the EU border, HMRC would issue a S8 report as legal proof the goods have existed the UK, they would become liable for excise duty in the EU, presumably the consignee could then raise an ARC to move the goods from the EU border to their warehouse.
How will warehouse and consignee validation occur?
Currently a list of all EU companies/entities which are authorised to send or receive excise goods in duty suspension, called 'SEED', are maintained on the EU commission's Europa server
, each member states EMCS system validates against this list before approving movements. Mike Gilmore (HMRC) stated "a future UK SEED would need to be considered." those of us involved with the rollout of EMCS may know that HMRC ran out of money allocated to the project during functional stage 3.2, but this should not be a barrier to any new undertakings.
If you have only shipped excise goods in suspension to EU countries before, we recommend you take some time to read through HMRC's guidance.
If you have any questions you can ask here or in the forum.