GB-EU Border Checks (UK & EU from 1st Jan 2021)

On 14 July, the EU updated and reissued it’s 1 Jan 2021 Readiness Notice on Customs (dated 22 Nov 2019) and combined the content with the updated and replaced Readiness Notices on Preferential Rules of Origin (dated 4 June 2018) and Customs and Indirect Taxation (dated 30 Jan 2018), here.

The day before, on 13 July, the UK published its Border Operating Model, here. I Blog posted about it at the time.

The Institute for Government in the UK has published a handy explainer – here.

GB to EU trade – From 1 Jan 2021

(1) Full customs declarations (UK export declarations and EU import declarations) will be required.

(2) If applicable, tariffs and import VAT will be payable at the time of import, unless traders are eligible to defer payments.

(3) UK exit summary Safety and Security declaration (or combined fiscal and safety and security declaration) and EU entry summary Safety and Security declaration will be needed.  

(4) Checks according to international conventions (e.g. CITES) will take place.

(5) Full SPS checks will be imposed, including a requirement for UK Export Health Certificates.

(6) Additional requirements will apply to the export of other controlled goods, in line with EU and member state rules.

(7) Excise goods will be subject to the rules applied by the importing EU member state.

EU to GB trade –

From 1 Jan 2021

(1) Full customs declarations will be required for controlled goods (e.g. excise goods like tobacco and alcohol).

(2) For standard goods (most goods), simplified customs requirements will be in place from January. Traders will have to keep sufficient records of their imports, but will be able to defer full customs declarations until 1 July 2021 (although they may submit customs declarations before if they wish).

(3) If applicable, tariffs will be payable, but it will be possible to defer payment until customs declarations are made (no later than July 2021). If applicable, import VAT will be payable, although many traders will be able to defer payment.

(4) An EU exit summary Safety and Security declaration will be needed.

(5) Checks according to international conventions (e.g. CITES) will take place.

(6) Imports of high-risk live animal and plants (and animal and plant products) must be pre-notified to the UK authorities via IPAFFS, have correct health documentation and may be subject to checks. Physical checks will be carried out at the point of destination or other approved premises.

(7) Import licenses and other requirements will apply to the import of some high-risk goods.

(8) Businesses importing excise goods will need to pay GB excise duties using the CHIEF or CDS systems (although excise duties are already payable on excisable imports from the EU).

From April 2021

Imports of all products of animal origin, regulated plants and plant products will require pre-notification to the UK authorities via IPAFFS and must have correct health documentation. Necessary physical checks will take place at the point of destination or other approved premises.

From July 2021

(1) Full customs declarations will need to be made at the time of import for all goods. Some traders may be eligible for simplified declaration procedures.

(2) Any applicable tariffs will be payable on import, although many traders are eligible to defer payments.

(3) A UK entry summary Safety and Security declaration will be needed.  

(4) Products subject to SPS checks will need to transit through a designated Border Control Post equipped to handle the goods in question and be subject to checks. Goods will subject to an increased rate of physical checks.

Meeting Climate Change Requirements (UK from 1 Jan 2021)

On 7 July, the EU revised and updated its 1 Jan 2021 Readiness Notice on the EUETS (EU carbon trading) (previously dated 19 Dec 2018). This updated Notice is here.

Amongst the list of instructions are :

(1) Operators of stationary installations in the UK and aircraft operators where the UK is the administering EU member state – to continue holding emission allowances after 30 April 2021 – must open a trading account in the Union Registry administered by an EU Member State and move their assets to this account.

(2) They must also – ensure that their annual emission reports are verified by verifiers established in the EU and accredited by the national accreditation body of an EU Member State.

Please note the Notice also sets out specific restrictions that will apply in Northern Ireland from 1 Jan 2021.

As a result, the UK has updated (19th August) its pre-existing instructions on meeting climate change requirements (covering emissions trading, ecodesign and energy labelling) previously issued on 12 October 2018. Note: the EU does not have 1 Jan 2021 Readiness Notices on ecodesign or energy labelling (only on EMAS and the EU Ecolabel).

The UK instructions are here. I Blog posted about these instructions at the time in 2018.

Key points : (taking account of the EU Readiness Notice)

(1) UK stationary installation operators and aircraft operators will continue to have access to Operator Holding Accounts and Aircraft Operator Holding Accounts administered by the UK for 2020 compliance obligations, up to and including 30 April 2021. Access to accounts after this date may no longer be possible.

Where applicable, operators should confirm with their traders that delivery of allowances will be possible from 1 January 2021 to ensure sufficient allowances are available to enable compliance with surrender obligations for 2020 emissions.

(2) Holders of Trading Accounts, Person Holding Accounts, Person Accounts in National Kyoto Protocol Registry and Former Operator Holding Accounts in the UK section of the Union Registry should plan for a loss of registry access from 1 January 2021.

(3) Free allowances will need to be allocated by the National Administrator on or before 31 December 2020 (the end of the transition period) subject to any changes being agreed by the European Commission in a Commission decision meeting.

(4) The deadlines for UK operators participating in the EU ETS during the transition period are:

• 31 March 2021 – submit Verified Annual Emissions Report for 2020 emissions

• 30 April 2021 – surrender equivalent allowances to 2020 verified emissions

NOTE : The temporary suspension by the European Commission on the processes relating to the UK registry was lifted on 3 February 2020 and the UK commenced the process of issuing 2019 and 2020 free allocation, as well as resuming auctions. The lifting of the suspension also allowed UK stationary installation operators and aircraft operators to regain the ability to use their entitlement in the Union Registry to exchange international credits for EU ETS allowances.

(5) Account holders who use their accounts to hold and trade Certified Emission Reductions and Emission Reduction Units will continue to be able to access their accounts within the UK’s Kyoto Protocol National Registry until 1 January 2021. As of 1 January 2021 (the day following the end of the transition period), account holders will no longer have access to these accounts.

The UK government is procuring a new system to enable account holders to hold and trade Certified Emission Reductions and Emission Reduction Units, which we expect to be operational in Spring 2021. Businesses with accounts in the Kyoto Protocol National Registry should consider taking action to manage the risks created by a short gap in service before the new system is implemented. For example, affected business could consider opening an account in another country’s registry to hold and trade Certified Emission Reductions and Emission Reduction Units during this period.

EU PRODUCT DATABASE (this is not an EU Readiness Notice, so this UK information derives directly)

(1) In terms of the EU product database:

• all consumers will still have access to the ‘open’ section of the database

• however, the UK’s Market Surveillance Authorities will no longer have access to the ‘closed’ compliance section of the database.

There will be changes for UK and EU suppliers regarding the EU product database. UK and EU suppliers placing relevant energy-using products:

• on the EU market will have to enter relevant information into the database

• on the UK market will not be required, under domestic law, to enter relevant information into the database, including for those products placed on the market between 1 August 2017 and 1 January 2019 after 1 January 2021.

UK and EU suppliers must ensure that relevant energy-using products:

• placed on the UK market comply with minimum UK Ecodesign and Energy Labelling standards

• placed on the EU market comply with minimum EU Ecodesign and Energy Labelling standards

UK and EU retailers must ensure that relevant energy-using products:

• placed on the UK market comply with minimum UK Energy Labelling standards

• placed on the EU market comply with minimum EU Energy Labelling standards

RE standards – All EU ecodesign and energy labelling requirements which enter into force and apply before 31 December 2020 will have effect in the UK. Further legislation is being prepared to ensure that all of these requirements continue to function in the UK from 1 January 2021.

Please clarify any gaps e.g. verification of annual emission reports, and the specifics applying in Northern Ireland, with the UK government department BEIS.

Medical Supplies (UK from 1st Jan 2021)

Healthcare is devolved in the UK, but contingency planning covers all 4 nations of the UK as well as the Crown Dependencies. Yesterday, the Department of Health & Social Care (DHSC) wrote to medical suppliers. The letter is here.

Re-routing away from the short straits

A large percentage of medical supplies come from the EU or have a supply touchpoint at the short straits (between Calais/Dunkirk/Coquelles and Dover/Folkestone). The DHSC letter asserts the first priority of any contingency should be to maintain replenishment rates at necessary levels by securing capacity to reroute freight away from the short straits potential disruption points. Companies are encouraged to review their own logistics arrangements and consider making plans for avoiding the short straits as a matter of priority.

In 2019, the Department for Transport (DfT) put in place a 4-year procurement framework for freight capacity for ‘Category 1’ goods , which includes all health supplies. This framework is still in place. DHSC is seeking to secure capacity on the government secured freight capacity (GSFC) to support the health and social care sector. More information will be provided when possible, including updates on the procurement timescales and when companies can expect to be able to register and access the service.

In addition, DHSC has retained its express freight service arrangements with 3 specialist logistics providers to support the urgent movement of medicines and medical products to care providers and patients if other measures experience difficulties. This service will be in place for deployment from 1 Jan 2021 as required.

Buffer stocks where possible

We encourage companies to make stockpiling a key part of contingency plans, and ask industry, where possible, to stockpile to a target level of 6 weeks’ total stock on UK soil. DHSC stands ready to support companies with their plans if required and understands that a flexible approach to preparedness may be required that considers a mixture of stockpiling and rerouting plans as necessary.

Centralised stock build

In the run-up to EU Exit, DHSC, working with NHS Supply Chain, built up a centralised stock build (CSB) of fast-moving medical devices and clinical consumables. Some of this stock remains and accounting for likely demand trends for the time of year, the DHSC plans to build these levels back up to a target level of 6 weeks’ total stock. The devolved nations of the UK may, in addition, choose to build their own stockpiles.

The UK Government also updated its guidance (for 1 Jan 2021) to healthcare providers – here.

And updated its Government contact details for medical supply businesses – here.

Border Arrangements (Kent) (Britain from 1st Jan 2021)

On 13 July the Government published its Border Operating Model – I blog posted about it at the time.

It is the responsibility of the trader (or the trader’s agent, such as a customs agent or freight forwarder) to provide the necessary documentation to the HCV driver, and it is the HCV driver who must present the documentation at the EU ports.

Being border-ready means that an HCV driver is carrying all the necessary documentation to get through the GB and EU port (or has been provided with the appropriate information to get the documentation).

This includes:

• customs documentation:

• a master or movement reference number (MRN) from an import declaration if the goods are going to stay in the country of disembarkation (for example, goods going from GB to France), or a transit accompanying document if the goods are either staying in the country of disembarkation or going to move beyond it (for example, goods going from GB to Spain via France)

• an admission temporaire/temporary admission (ATA) carnet if the goods are temporarily going abroad (for example, goods going from GB to France and then back to GB)

• a transports internationaux routiers (TIR) carnet if goods are sealed and/or going to non-Common Transit Convention (CTC) member countries (for example, GB to India overland).

• import and export documentation depending on what goods are carried (it is possible that a free trade agreement or sectoral deal may change some of the requirements for import and export documentation). For example, EU member state authorities will check for the following on arrival at the EU port:

• products of animal origin require an export health certificate

• plant and plant-based products require a phytosanitary certificate

• fish require a catch certificate, export health certificate and where appropriate a captain’s certificate.

In addition, there may be other forms of import/export documentation that an HCV driver will need to carry on behalf of their trader which would not be checked at the ports. An HCV driver using the accompanied roll on roll off (RoRo) route would need a safety and security declaration before arriving in the EU. EU rules mean that they can be completed shortly before arriving in the EU.

Some EU member states have additional national requirements for goods arriving from GB, for example:

• France requires the use of the SI Brexit system, and the MRN barcodes for multiple consignments must be compiled in to a single ‘envelope’ MRN that will be scanned.

• the Netherlands and Belgium require that all movements are pre-notified using the Portbase and RXSeaport systems respectively; HCVs that are not pre-notified will not be allowed to leave Dutch or Belgian ports.

Disruption at the cross-Channel ports from 1 Jan 2021 is not inevitable, but it is a possibility for which the UK government is preparing.

Updated assessment of potential levels of disruption is ongoing, and the UK Government is now consulting on aspects of the Border Arrangements (Kent and the Short Straits) that will need to be in place from 1st Jan 2021.

The M20 Contraflow

In 2019, there was a permanent contraflow between Junctions 8 and 9 of the London-bound carriageway of the M20 with a steel barrier between lanes 1 and 2 of the northbound carriageway. That carriageway was reduced from three to two lanes with a speed limit of 50 miles per hour when Operation Brock was inactive.

From 1st Jan 2021, Highways England will deploy instead a concrete quick moveable barrier to set up the contraflow. The moveable barrier will be ready to use in December 2020 and will enable around 2,000 HCVs to be held – the same capacity as the 2019 planned contraflow. This will be available for long-term traffic management plans and is not just a response to any cross-Channel disruption at the end of the transition period.

Kent sites and revision of traffic management plans

Goods being moved from GB to the EU must be prepared for full EU import controls from 1 January 2021.

The UK Government has announced that goods moving from the EU to GB will also be subject to third country import controls, but these checks will be phased in during the first half of 2021.

For Eurotunnel and the Port of Dover, this is likely to require new inland border control posts as there is insufficient space for the new facilities at the ports.

While the inland border control posts are intended for checks conducted by HM Revenue and Customs (HMRC) and the Department for Environment, Food & Rural Affairs (Defra) on inbound and outbound goods, they could also be used as new holding sites for outbound HCVs as part of Operation Brock (HGV traffic management system).

The UK Government has purchased a new site in Ashford to support this. Construction at the site has commenced, and it will provide approximately 2,000 HCV holding spaces. The new Ashford site is being integrated into updated traffic management plans for the end of the transition period. This overall plan is still in development and is likely also to incorporate some but not all of the other parts of the 2019 approach.

Extending the sunset clause

In Oct 2019, the Government had issued three Orders (Statutory Instruments) to give the Kent Resilience Forum the ability to create traffic restriction periods that require HCV drivers to use designated roads to reach the ports (including under specific conditions), and to follow instructions from traffic officers.

There would have been four Brock phases to handle increasing levels of congestion:

• phase 1: using the Dover Traffic Assessment Protocol (TAP 20) to hold around 500 lorries on the six-mile section of A20 leading to Dover

• phase 2: queuing on the coastbound M20 (J8-J9) with a steel barrier to create the contraflow, with all other non-freight traffic going through the M2

• phase 3: Manston Airport HCV holding facility for all Port of Dover freight (Eurotunnel freight would have continued to be held on M20 J8-J9)

• phase 4: M26 queuing system coastbound and London-bound for all Eurotunnel freight

As the current set of SIs expire on 31 December 2020, the Government proposes to extend the sunset clause to October 2021 to allow Operation Brock to continue and be enforceable in 2021.

The smart freight (SF) service

SF is an online service for the RoRo freight industry being developed by the UK Government. The service will help to simplify and automate the process of establishing the border-readiness of an HCV to help mitigate the risk of delays.

It will ask questions relating to the expected EU import controls at the border to ensure the HCV driver has the necessary documents before they travel. The service will include an online portal for registration of goods movements and an operator application to check compliance with the service.

For 1 Jan 2021, two key products are being developed to upstream the border-readiness checking process to the point of loading:

1 a web-based portal for the SF service (the ‘SF portal’) which enables the HCV driver, or someone acting on their behalf, to self-declare if they have all the documentation they need to take goods across the Short Straits

2 a mobile application (the ‘SF app’) which enables enforcement officials to confirm that a vehicle is registered on the SF portal, and to see the outcome of their self-declaration

The Government’s consultation questions are found in this document – here

DEFRA SPS standards (UK from 1st Jan 2021)

Lord Gardiner of Kimble made the following statements concerning the SPS standards regime that will operate from 1st Jan 2021 – (these statements made in the final reading of the Agriculture Bill at the House of Lords)

[note: goods placed on the NI market will need to comply with EU law where it’s listed in the Ireland/Northern Ireland Protocol]

(1) The Food Standards Agency and Food Standards Scotland will apply to imports under new free trade agreements. For example, regulated food products will need to pass the FSA’s risk analysis process before being placed on the local market. The FSA has doubled the number of risk assessors since 2017. It can draw on the expertise of 100 scientific experts and support staff and has recruited 35 additional members to its advisory committees. It has also taken wider consumer interest into account, such as the impact on the environment, animal welfare and food security, drawing on appropriate expertise and stakeholders to do so. The expertise of other government departments and agencies will be brought to bear in the risk assessment process, as required, including the Animal and Plant Health Agency and Defra officials.

(2) Equivalence will be considered by experts in the Animal and Plant Health Agency and the Food Standards Agency. The expert advice and evidence on regulated products will then be presented to Ministers and devolved Administrations for a decision on whether these products should be placed on the local market. Secondary legislation would need to be laid before Parliament to authorise new regulated products to be placed on the market.

(3) The functions of audit and inspection, currently carried out by the European Commission, will be repatriated to ensure that trading partners continue to meet local import conditions for food and feed safety, animal and plant health and animal welfare. This will include officials auditing the food production systems and rules of other countries and carrying out inspection visits to facilities in the countries themselves. Verification that requirements are being carried out as stipulated will be conducted through checks at the border. Audits will ensure that trading partners have the necessary infrastructure and regulation in place to export safe food and animal products, which either meet or exceed local import conditions, and will then ensure that these standards are maintained.

(4) The UK Government will take a science-based approach to SPS measures and take their own sovereign decisions on standards and regulations, in line with the principles of the WTO SPS agreement and other relevant internationally recognised guidance.

[Information on the WTO SPS agreement is here – note, it does not of itself set out SPS standards]

(5) Food labelling rules apply to all food intended for supply to final consumers or to caterers. Imported food needs to be fully compliant before it is placed on the local market. The name and address of the local food business, or the importer, will be required on the label from 1st Jan 2021. There are no exceptions to food labelling rules for imported food.

(6) Re Northern Ireland. The withdrawal agreement joint committee met again on 16 July and the Northern Ireland Executive representative again attended, in line with the New Decade, New Approach deal. They exchanged updates on implementation of the protocol and discussed preparatory work for future decisions.

(7) Re quotas that form part of the commitments within the UK goods schedule, which has been lodged at the WTO. The UK has already agreed a common approach with the EU to apportion EU 28 tariff-rate quotas between the UK and EU 27 in order to ensure existing trade flows are maintained. Legislation will be presented by the Treasury later this year under the Taxation (Cross-border Trade) Act 2018 to establish new tariff quotas in UK law.

(8) Re Use of gene editing. Until 2018, there was uncertainty within the EU as to whether the living products of gene editing technology should be subject to the same regulatory framework as genetically modified organisms (GMOs), because the legal definition of a GMO was open to interpretation.

In 2018, the European Court of Justice ruled that gene edited products must be treated in the same way as GMOs, even if the changes to their genetic material could have been produced by traditional methods, such as crossing varieties of the same species and selecting only the improved individuals.

The UK Government is committed to taking a more scientific approach to regulation.

Gene-edited changes to genetic material that would not arise naturally or from traditional breeding methods will still need to be regulated as genetically modified organisms. The UK Government will consult on this issue. Defra is working on the details so that a consultation can be launched in the autumn.

Further details are set out in the Hansard record – here.

Climate Change Agreements (UK)

In the Spring Budget 2020, the UK Government announced that the current Climate Change Agreements (CCA) scheme would be reopened to new entrants for a set period and extended for a further two years until March 2025.

In April 2020, the UK government consulted on its proposals for how this extension would be implemented and sought views on potential reforms were there to be a future CCA scheme beyond March 2025.

The Environment Agency is expected to certify eligible new entrant facilities from January 2021. The deadline for applications is extended to 30 November 2020.

The baseline period is to be updated. Where discrete data for 2018 is not currently available, appropriately adjusted Target Period 3 (covering 2017 and 2018) data may be used instead to estimate a 2018 baseline.

The deadline for sector organisations to submit counter proposals for agreeing sectoral targets will be extended to 30 October 2020.

The Buy-out Price will increase to £18/tCO2e for Target Period 5 (1st Jan 2021 to 31 Dec 2022). The Target Period 4 (1 Jan 2019 to 32 Dec 2020) buy-out remains at £14/tCOe.

The financial penalty price for penalties related to Target Period 5 will increase in line with the buy-out cost per tCO2e for the appropriate target period; the financial penalty will increase to be the greater of £250 or £18/tCO2e.

A short window to make some specific amendments to agreements will be opened in 2021, with separate guidance to follow on this.

The Government will look to confirm a timeline for further engagement on the future of the CCA scheme shortly.

Further information on the CCA extension to March 2025 (and the views received on the future of the CCA scheme) is found here.