The Q&A is rather lengthy and expands upon a number of political matters not strictly related to logistics.
Key to the deal are inspection facilities being built in the UK, data sharing, an expansion of the trusted trader scheme, as well as “not for EU” labelling.
For the benefit of our readers in the logistics industry, we have trimmed down the Q&A from The Commission to only include the most important points that impact logistics.
The full Q&A, which also touches on state aid rules and VAT among other things, can be found here.
Solutions for agri-food retail goods between Great Britain and Northern Ireland
The EU and UK have agreed on new and simplified rules and procedures for the entry into Northern Ireland from Great Britain of certain agri-food retail goods where the goods are sent for final consumption in Northern Ireland:
- Use of a general single certificate for mixed loads of agri-food goods;
- Identity checks drastically reduced: down to 5% when all safeguards are in place (more below). Physical checks to be carried out on a risk basis and intelligence-led approach;
- Application of UK public health standards (e.g. level of additives in food) to goods moved for end consumption in Northern Ireland. Previously prohibited chilled meats, such as sausages, are now allowed;
- Removal of certificates for organics and wine;
- Possibility to move goods originating in the rest of the world to Northern Ireland through Great Britain when UK conditions are identical to EU ones (specific list of products, including New Zealand lamb and vegetables).
Potatoes and plants for planting and agricultural machinery
The Commission and the UK government have found a solution for certain plants for planting and agricultural or forestry machinery to move to Northern Ireland from other parts of the UK, on the basis of a special plant health label.
A solution has also been found to allow seed potatoes, previously prohibited, to be moved from Great Britain to Northern Ireland. Seed potatoes should bear a plant health label, be dispatched by authorised operators and be subject to inspections.
Protecting the single market with regards to agri-food
Several safeguards have been agreed to protect the integrity of the EU Single Market:
- The UK is constructing operational SPS Inspection facilities and provide EU representatives with access to relevant UK IT databases.
- Labelling “not for EU” will ensure that products remain in Northern Ireland and do not undermine public health and consumer protection in the EU Single Market.
- Identity checks will be progressively reduced as the labelling requirements are fully completed (more below).
- Monitoring of the movement of retail goods, traceability and listing of the dispatching and receiving authorised establishments.
- Possibility to suspend partly or fully the facilitations to address specific problems or systematic failures of compliance with the new arrangements.
SPS inspection facilities in the UK
The UK announced in December that it will construct permanent SPS Inspection Facilities. The Commission and the UK government have agreed on a gradual deployment of SPS Inspection Facilities: 1 October 2023 for the delivery of enhanced facilities and 1 July 2025 for the delivery of final facilities.
Labelling
The Commission and the UK government have agreed on requirements for the labelling of agri-food retail goods at different levels: individual, box, shelf signs and posters. The purpose is to inform consumers that those retail goods are not for the EU, rather only intended for sale to the final consumers in Northern Ireland. This will also ensure the traceability of these retail goods.
For example, from 1 October 2023, prepacked meat and fresh milk will be individually labelled. Goods sold loose need only to be labelled at box level (e.g. apples) and easily visible signs would need to be placed next to the price tag on the shelves in the supermarkets. Posters would also be needed, placed in the supermarkets so that consumers know that the goods are not for EU. In order to minimise supply chains difficulties, it was agreed that labelling would be introduced gradually. As of 1 July 2025, all retail goods (other than goods sold loose) will be individually labelled except those not subjected to official controls at border control posts in the EU (e.g.: confectionery, chocolate, pasta, biscuits, coffee, tea, liqueurs, canned fruit and vegetables, ketchup and similar shelf-stable products).
Rules for official controls and checks
From 1 October 2023, the frequency rate of identity checks will be down to 10% of all consignments of retail goods. That frequency rate will be further reduced to 8% by 1 October 2024 when all milk and dairy products are individually marked. From 1 July 2025, that frequency rate will be furthermore reduced to 5% of all consignments of retail goods – this is when all retail goods are individually marked.
In addition, physical checks will be carried out in conjunction with those identity checks using, in particular, a risk-based and intelligence-led approach.
Documentary checks will be carried out on all the general certificates accompanying the consignments of retail goods. These checks can be performed remotely and electronically.
Customs procedures for goods moving from Great Britain to Northern Ireland
Based on an expanded trusted trader scheme, the Commission and UK government have agreed to dramatically simplify procedures related to the movement of goods. Goods moved by trusted traders from Great Britain to Northern Ireland that are not at risk of entering the EU Single Market can benefit from these new arrangements. However, goods moving from Great Britain to Northern Ireland that are destined for the EU or at risk of entering the EU will be subject to full customs checks and controls.
Inspections for goods not at risk of entering the EU, trusted trader scheme
Goods not at risk of entering the EU will benefit from an unprecedented reduction, although not a full eradication, of customs requirements for traders moving goods by direct transport from Great Britain to Northern Ireland.
To benefit from these customs facilitations, traders must become trusted traders. To qualify as a trusted trader, traders must register with the relevant UK authority, fulfilling all relevant conditions, while also providing a detailed list of the products they usually transport. Once authorised, they can benefit from simplified customs procedures on the condition that they ensure that the goods are for final sale or use by end consumers in Northern Ireland.
The new trusted trader scheme will also be open to companies based in Great Britain and not only in Northern Ireland, as is currently the case. For goods subject to processing, two conditions are in place to consider processing to be non-commercial: either the processor has a low turnover (i.e. below an agreed threshold), or it belongs to specific sectors (sale of retail food to consumers, construction, health care, not-for-profit and use of animal feed). Apart from consumer goods, only goods that are processed non-commercially on this basis can be moved by trusted traders.
The trusted trader scheme can be suspended in a number of scenarios, both by the EU or the UK.
The EU can suspend it if: 1) the UK fails to provide the EU with access to the relevant UK IT customs systems and databases, or 2) the UK does not live up to the commitments it undertook when setting up the trusted trader scheme.
These measures will allow the EU to react quickly to protect the integrity of the EU Single Market. If the trusted trader scheme is suspended, goods cannot be moved between Great Britain and Northern Ireland based on the customs facilitations granted to operators under the scheme. Consequently, all the movements of goods will be subject to the same requirements as those for goods at risk of entering the EU.
The UK can also suspend the scheme if the customs facilitations for the trusted traders are no longer in place in the EU.
For customs, the new trusted trader scheme is expected to be in place around September 2023, when a number of pre-conditions (such as the EU having access to the UK customs databases and IT systems) will be fulfilled and the UK will have managed to authorise the existing traders in line with the new requirements. Around one year later, the scheme for B2C parcels, notably the authorisation and monitoring of authorised carriers, should also be in place and all the facilitations granted by the EU will come into force.
Parcels
Business-to-consumer (“B2C”) parcels, e.g., a person in Northern Ireland ordering a product online from an e-commerce platform, sent by direct transport from Great Britain to Northern Ireland, will benefit from simplified customs processes compared to normal freight. This will be achieved through the involvement of fast parcel operators (e.g., DHL or UPS), and other economic operators sending parcels (e.g. Amazon) registered as authorised carriers. This also concerns the UK’s designated postal service (Royal Mail).
The carriers will provide commercial data to the UK customs authorities prior to delivery of the goods. The authorised carrier scheme will be monitored by the relevant UK competent authorities to ensure that carriers respect the relevant criteria. The UK authorities will carry out their monitoring activities in accordance with operational arrangements agreed with the EU.
The main customs requirements will be entirely waived for consumer-to-consumer (“C2C”) parcels, e.g., a grandmother sending a present in a parcel from Edinburgh to her granddaughter in Belfast will be able to do so without any issues.
Business-to-Business (“B2B”) parcels will enjoy the same facilitations as for normal freight movements if one of the businesses is a trusted trader.
Commodity codes
The Combined Nomenclature (CN) is the EU’s coding system, comprising the internationally agreed Harmonised System codes with further EU subdivisions. It serves the EU’s common customs tariff and provides statistics for trade within the EU and between the EU and the rest of the world.
Under the facilitations agreed in principle, traders will have the possibility of listing in an annex the goods they are normally handling in the application process for a trusted trader authorisation. Based on these detailed goods descriptions, UK authorities will assist in providing the appropriate CN code for each of the goods. When the goods are listed in the annex, for each movement of these goods only the goods description has to be provided by the traders in the declaration and UK authorities will enable the translation from the good description into CN codes and its transmission to the EU.
Goods that are not at risk of entering the EU can be moved by trusted traders from Great Britain to Northern Ireland based on a 6-digit CN code instead of the 10-digit CN code, shared with the EU by UK authorities. The shortened CN Code is hugely beneficial for traders as the 6-digit CN code covers a large variety of goods. For example, if a trader moves apples of different varieties, they would need to move them using different 10-digit codes whereas under the scheme the trader can declare them as apples with a 6-digit code, or only provides the goods description when the goods are listed in the annex to the authorisation (see the paragraph above).
For very limited categories of goods subject to specific controls, an 8-digit CN code will be required.
Data sharing
The EU will have near real-time access to the relevant UK customs databases and IT systems used to record movements of goods between Great Britain and Northern Ireland. If risks are detected, EU representatives can request UK customs officials to stop and check the goods. In case the EU no longer has access to such databases and IT systems, or in case the trusted trader scheme is seriously mismanaged, the EU can suspend the entire scheme.
Businesses and carriers involved in the trusted trader scheme will be subject to authorisation and registration requirements. Where such requirements are not met, their participation in the schemes can be suspended or terminated in accordance with an agreed process.
The UK has agreed to share live data with the EU on movements of goods from Great Britain to Northern Ireland. This real-time customs data is necessary for the EU to carry out a proper risk assessment and, if necessary, request the UK authorities to carry out specific control measures on that good. The UK authorities shall carry out the control measures when requested.
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