HMRC’s legacy declaration system Customs Handling of Import and Export Freight (CHIEF) is over 25 years old and should have been replaced by Customs Declaration System (CDS) in 2019, but CDS is behind schedule and experts say it is unworkable.

One of the forwarding sector’s primary software providers, has written to HMRC stating it will not be offering or supporting a software solution that uses the Customs Declaration Service (CDS) for shipments in and out of Northern Ireland (NI), leading some local forwarders to withdraw operations from Northern Ireland amid increasing concern about the capability of UK customs systems to handle dual-tariff procedures post-Brexit.

When it was announced that CDS was the intended solution for delivery of the NI Protocol and would be required to go live on 1st January 2021 the software provider undertook a review of their readiness for that date. They established that with an amount of de-scoping it was possible that they could have a rudimentary solution available for supplementary import declarations towards the end of the year.

However they quickly established that there was no possibility of some critical import and export functions operating, as there are significant gaps in required functionality from the core HMRC CDS system and dual running when both CHIEF and CDS are in use.

They concluded there was no realistic chance of releasing a CDS compliant solution and training users/helpdesk staff before the end of March 2021. 

There are also significant reservations over the level of technical support that HMRC can provide. Supporting ten live users making a few thousand declarations a month is a very different proposition from handling the expected one million inbound NI and 40,000 outbound shipments per month.

CDS is not only a change of computer system it is a change of data elements and Customs regulations. Which means that forwarders, importers and exporters, who are required to provide the additional data that will be required, will need to update their electronic data exchange protocols, that may involve changes to both of their internal systems. These changes can typically take up to 18 months to complete.

It is in taking all of this into consideration that prompted the key software provider to consider that there is a totally unacceptable level of risk in mandating CDS and not having any workable contingency plans. 

There is no benefit to trade in using CDS, it is a decision based on the requirement to operate the UK and the EU tariff concurrently and the requirement to supply the EU with trade movement data. 

The spectre of paralysing the whole NI’s trade movements is real and there is doubt that the TSS [Trader Support Service] can mitigate this to an acceptable level. 

HMRC are being urged to look at viable alternatives, ideally using CHIEF which is currently in use and widely understood by all parties involved in trade with NI.

The final status of HMRC systems or the UK/EU trade deal, will not change the need for import and export customs declarations and other regulatory requirements may also be required, as the logistics landscape with the EU changes dramatically. 

As members of The Association of Freight Software Suppliers, Metro has bespoke, generic and automated solutions to protect your EU trade from the 1st January 2021. For further information contact our post-Brexit Task Team and speak with Andrew White or Jade Barrow.

In two days we have gone from the EU insisting the UK needed to remove part of its controversial Internal Market Bill that breach the withdrawal treaty in order to get the trade deal done, to UK business secretary Alok Sharma insisting the EU and UK “have made progress” and that an agreement could be reached next week.

While both sides have said major parts of the deal are complete, they remain unable to agree on the recurring sticking points of fishing rights and state aid rules.

EU negotiators are reportedly planning to provide envoys of the bloc’s 27 member states with an update on the trade talks on Friday morning, with talks likely to continue, providing Michel Barnier has a belief a deal is still possible.

The key point for business is that whatever type of deal we leave the transition period on, change is coming, and so businesses do need to urgently prepare for customs declarations.

While No.10 are insisting that the departure of advisor Dominic Cummings and Lee Cain, the Downing Street director of communications, will make no difference to EU negotiations, when it comes to the final decisions on whether to accept the deal on the table, the absence of Cummings and Cain could well “make a difference to rally political support in No.10.”

In a significant clarification of the ‘lightouch’ importing regimes announced in July, HMRC has launched a video to promote its new digital tool, that helps traders check if they can apply for authorisations to delay customs payments and declarations. 

The answer to this is a resounding no, unless they are already authorised to manage HMRC simplified procedures, which almost no importers are.

Metro has developed a suite of bespoke, generic and automated solutions to protect your EU trade from the 1st January 2021. This includes our CuDoS (Customs Documentation Services) platform automating and digitalising customs submissions in the new European environment. 

For further information check out our ‘Brexit Ready’ portal or contact our post-Brexit Task Team and speak with Andrew White or Jade Barrow.

After suffering an expected defeat in the House of Lords on Monday over proposed laws which could breach Britain’s EU exit treaty, the government has affirmed its intention to re-table the contentious plan, that has been explicitly criticised by U.S. President-elect Joe Biden.

Despite the President-elect stressing the importance of the Northern Irish peace deal in his first call to The Prime Minister, Boris Johnson insists the controversial clauses act as a safety net in case negotiations with the EU fail to work out how goods can flow between Britain, Northern Ireland, and across the open border with Ireland.

In the ongoing post-Brexit trade and security talks, the European Union has agreed to ring-fence police and judicial cooperation from potential sanctions in the event of any future trade rows with Britain, which is seen as a significant concession in a bid to unlock the wrangling over a post-Brexit deal.

EU negotiators have refused to drop demands for “cross-suspension” in the areas of the so-called level-playing field, transport, energy and fisheries – essentially allowing the EU to clamp down on most sections of the agreement as part of a dispute. 

The discussions over the dispute settlement mechanisms for policing any future deal have been described as a “serious problem”, according to EU sources.

After negotiations in Brussels broke up last week both sides agreed to hold extra sessions between Mr Barnier and Lord Frost’s top deputies dedicated to the governance structures.

HMRC’s new customs IT system, the Customs Declaration Service (CDS), is intended to replace the current Customs Handling of Import and Export Freight (Chief) system and should have been live well before Brexit, but software developers at HMRC have had to focus on the old CHIEF, which has been in place for 27 years, but could only handle around 60 million customs declarations per year, to boost its capacity to 255 million declarations annually.

The Association of Freight Software Suppliers (AFSS), of which Metro are a member, said that “Even if they [HMRC] could deliver a minimum viable product, it is unrealistic to expect that end-users will have sufficient time and knowledge to learn the new processes for January 2021,” he said.

This is particularly true of the Northern Ireland (NI) and Ireland border, where HMRC has mandated that CDS and not Chief will be used.

The association’s members also face challenges beyond CDS, including managing integration to the Goods Vehicle Movement Service (GVMS), HMRC’s New Computerised Transit System (NCTS), which will record and manage goods coming into the UK, and the old Chief system, among others.

The final status of the UK/EU trade deal and HMRC systems, will not change the need for import and export customs declarations and other regulatory requirements may also be required, as the logistics landscape with the EU changes dramatically. 

Members of The Association of Freight Software Suppliers, Metro has bespoke, generic and automated solutions to protect your EU trade from the 1st January 2021. For further information contact our post-Brexit Task Team and speak with Andrew White or Jade Barrow.

Logistics UK, the revamped Freight Transport Association (FTA), has warned that a No-Deal Brexit could have a significant effect on the price of all imported goods and could drive inflation up as a result.

“Everyday household items we import will become more expensive under World Trade Organisation tariffs,” writes David Wells, the association’s CEO, “some by 30% or more.  This will make the household shopping basket much more expensive, particularly in the early part of 2021 when we rely on imports for much of our fresh food. 

“The actual cost of moving goods will also increase,” he continues, “if new vehicles, parts and tyres are also subject to tariffs. This is more than ‘turbulence’, as suggested by Mr Gove recently and logistics businesses, operating on 2% margins, cannot afford to take on these costs.”

Another concern for logistics operators will be obtaining access to the EU market if the talks remain unresolved, as without a deal, UK hauliers will also be restricted by the number of lorry access permits available to enter the EU. “The permit quota available to UK operators will fall short by a factor of four, putting businesses at risk right across the country. We are urging government to keep pressing for a deal with Brussels, to protect not only our industry but the economy as a whole.” 

Elizabeth de Jong, policy director at Logistics UK, added: “Logistics UK has been working closely with the government for some time to highlight the issues which could affect the smooth passage of goods through the supply chain at the the end of the transition period.  

“Much has been achieved but there is still much to be done if disruption is to be avoided from 1st January 2021, with detail still required in order for logistics operators to brief and train staff, and adopt new processes for declarations, tariff calculation and payments. As always, we stand ready to provide all support necessary to make Brexit a success but need the government to provide us with the information we require, in detail and at pace.”

With COVID, Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, efficient supply chains have never been more important.

Metro’s ‘Brexit Ready’ web portal has been designed to prepare your business for the 1st January 2021.

For further information on Metro’s brokerage services and automated solutions, please contact Grant Liddell or Chris Carlile who are leading our 2021 EU withdrawal Task Team.