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We posted a blog last year on the HMRC project to upgrade the ageing CHIEF system which handles import and export declarations, detailing how this project has taken on extra significance in the face of Brexit.

Since then we have attended several CDS workshops with the project stakeholders, several association meetings and started developing the required changes in our own software. We now understand the ability to process export declarations will now not be ready by the July go-live, but with the new Brexit transition agreement, how will this effect you?

The UK leaving the European Union (EU), once materialised, will bring a brand new scenario for both the UK and the EU. From a Customs point of view this presents a number of challenges and opportunities to modernise Customs, commerce and logistics in line with international guidelines and best practice. Among many other implications, this means an increase in the volume of Customs declarations, impacting both UK business and government (HRMC).

Today the UK & the EU have agreed a Brexit transition period, beginning on 29th of March 2019 (Brexit day as laid out under article 5) ending on the 31st of December 2020.

The deal, which needs to be ratified in October, is designed to smooth the path to future arrangements and avoid the potential 'cliff edge', but what does the deal mean for importers and exporters in the UK?

More than 50% of UK business involves trade. And when the dust finally settles on Brexit, one thing seems certain: more of it will be with non-EU countries. 

So what does it entail from a risk point of view? And how should small businesses plan for this brave new world? 

Peter Quintana, director of the High Growth Knowledge Company put this to a panel of leading business people at our recent International Business Round Table hosted in association with Bluefin Insurance, Milsted Langdon and Royds Withy King. They broke the risk down into two areas – financial risks and physical risks.

On the 15th of August the Government released their policy paper 'Future Customs Arrangements: a future partnership paper' on proposed customs arrangements with the EU post-Brexit. They proposed a 'limited-time interim period' where both UK and EU business would benefit from time to fully implement the new customs arrangements, in order to avoid a cliff-edge.

The document identifies two broad approaches to a border with the EU. The first approach 'a highly streamlined customs arrangement' involves utilising the UK’s existing third country processes (NES export declarations to HMRC) for UK-EU trade. The second approach 'a new customs partnership with the EU' would seek to align customs with the EU in a way that removes the need for a UK-EU customs border. 

On the surface, option one seems the most likely of these two options and would certainly be the fallback position, should the 'alignment approach' fail. Under this scenario port infrastructure would look to be improved for 'as frictionless a customs border as possible', but Export and Import goods would need to be declared to HMRC, as per current third country rules.

HMRC has estimated there are 192,000 exporters in the UK who ship goods to EU countries, but have never shipped outside the EU to third countries. If your company fits into this category, read the guide below to find what you would need to do to declare goods for export.

The Government has today published a paper – Future customs arrangements: a future partnership paper. This is the first in a series of papers on the new deep and special partnership the government wants to build with the EU.

Supply chain between the UK and Europe is an area that will be greatly affected over the coming years by the UK's withdrawal from the EU.

Though the exact nature of the changes will not become apparent for some time, mapping supply chains can help companies understand both the risks and the opportunities these changes might bring.

Whatever the outcome of Brexit negotiations, it is wise to start that planning now, to ensure you remain competitive in the changing market. Early and effective scenario planning combined with analysis of the potential consequences of a post-Brexit economy might even improve your position.

According to the Chartered Institute of Procurement & Supply (CIPS) A survey of 2,111 supply chain managers found that 32% of UK businesses who work with suppliers on the continent are actively looking for alternative suppliers based in the UK as a response to Brexit.

Is 'onshoring' an option for you?

Having called a snap election, the Conservative Party is currently 21 points ahead in the first election poll since the announcement. On news of the election, the pound rose to a six-month high, largely due to speculation that five more years until the next election would lead to a 'softer' Brexit. How would a 'Soft' Brexit effect UK importers and Exporters?

CDS stands for the 'Customs Declaration Services' programme and is a large scale implementation currently being undertaken by HMRC to replace the CHIEF servers (these are the servers which currently process all import, export & freight declarations). The new CDS system is due to be rolled out in December 2018, but the project has just been given an unofficial amber-red status by HMRC.