Brexit has damaged the confidence of many UK and EU SMEs to trade across the channel. Some of those who have tried, have faced increased costs and delays which they have not understood. Or, they have not sought advice, or been given the wrong advice, from the transport sector which is generally poorly equipped knowledge-wise to offer guidance on customs outside of their rigid business models and operating systems.
I have heard a number of enlightening statements from Tony Buckley himself recently in meetings along the lines of; ‘If importers and exporters felt Brexit posed a challenge, BTOM, and proposed EU customs regulatory controls, including the removal of OSS, not to mention CBAM in the coming years, are going to take the challenge to another level”, and; ‘the world is getting even harder for SMEs to operate in’. This is especially the case given the EU are making it perfectly clear they want end to end cross border visibility, in other words, to cut out intermediaries. This will not necessarily mean the end of intermediaries in the EU, but it will mean they will need to act as Indirect Representatives, and therefore carry full responsibility for the products they administer across customs borders. This responsibility however is getting heavier by the day, with Origin and increasing Control requirements, as well as for payment of duties and VAT, so it’s likely the smaller intermediaries will themselves disappear. The question I’m not sure about is whether an SME exporter, when exporting from a country in which the business resides, whether they will be permitted to use an Indirect Representative, or whether the export capability is going to have to come from within the SME. If this is going to be the case going forward, this situation is going to create a major skills and human resource gap in many SMEs, which will further impact their ability to trade across customs borders. Even now, looking at EU focused software supplier such as Customs for Trade (C4T), they will not talk to Customs intermediaries like me any more.
Some may say this situation is simply the evolution of business, but have they thought through the wider and immediate impact, I doubt it? Do they think the fewer large intermediaries left are going to be interested in dealing with the smaller SMEs, or give them half sensible rates? I think not. We just have to look at my old sector of marketing agencies, to see the fact that while they take on anyone and everyone to get their agency started, they soon walk away from smaller loyal clients once they gain a greater return from large clients for the same amount of effort. It’s therefore not just the demise of the few thousand smaller intermediaries we need to be concerned about, but the demise of the hundreds of thousands of SMEs reliant upon buying and selling across customs borders. This situation not only creates a major impact on employment, given SMEs in most western countries make up a body that is by far the largest employer, but they are also making it even harder for a few of the ‘acorns’ to turn into ‘oaks’.
Nowadays in Customs, perhaps more than in many professions, we have to learn every day, so your views, agreeing, disagreeing, and hopefully adding to what has been said, is much appreciated.
