Dale and Mark

Thank you both for very comprehensive and insightful comments.  As Dale has mentioned, there are echoes of Brexit.  For that reason, perhaps I might share the experience of Brexit in Ireland.

Businesses were as well prepared as Government information sources could make them, but there was still a marked reluctance to make structural and procedural changes.  This reluctance was compounded by the political uncertainty – “deal/no deal” that was resolved only at Christmas 2020.  Many companies, especially SMEs, entered the full rigours on EU border on 1 January 2021 with little or no preparation.  Customs also was poorly prepared at the front line (ports/airports) and there are signs of this factor in the UK at the moment also.

What happened?  There was considerable initial disruption at the ports, but this was ironed out fairly quickly.  It was followed by a series of changes to administrative rules, as the actual behaviour of traders became apparent to Customs (some sought to use gaps in the system to avoid requirements).  At the same time, the reality of a new World began to dawn on traders and they made significant changes.  Then the post-clearance checks began, and  traders were shocked by the strictness with which the letter of the law was applied.  They were more accustomed to the flexibility and understanding often applied to other regulations, where errors can be fixed post-hoc.  The long-term adjustments are now coming into place as a result of the outcomes of these Customs checks.

My perception is that the pendulum, initially swinging towards optimism (“all will be well”), has now swung to pessimism (“reduce, restrict, stop”) and is gradually, after 3 years, returning to the centre (“plan, organise”).

As Mark says, the role of the consultant is key, and Ireland’s experience has been that they appear like mushrooms when problems occur.  The shortage of thoroughly competent people is a problem, as is the absence of objective measures of competence.  Unfortunately this can lead to businesses being suspicious of all consultants.  Another issue is the complexity of dealing with Customs issues, generating costs at a level that businesses have not budgeted for and are reluctant to pay.

Overall, interesting times ahead as BTOM rolls out!

The following article has just been published in the UK’s Institute of Export & International Trade ‘Daily Update’. Perhaps the fear being expressed is overblown, but I sense the reported lack of awareness and preparation, particularly among SMEs, has echos of BREXIT. Now I may well be over simplifying the solution, but the UK government has access to all UK importers of record, so why have they not each been sent countdown letters and emails explaining the general implications, with a link to Gov.uk explaining the implications for all parties in detail. Given the importance to the UK that BTOM does not cause undue delays and shortages, particularly in a year where there will be a general election, would not a further email link / phone number to a bank of highly able customs specialists (not DBT International Trade Advisors) not be a sensible measure?  As I say, I may be over simplifying the solution, but given this is an issue many countries and customs areas are increasingly going to face around the world, what do you think?

‘Growing anxiety’ over readiness for Border Target Operating Model, say trade chiefs

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Posted by: William Barns-Graham

The UK’s leading business groups have warned that there is a “growing anxiety” about whether businesses in the UK and EU will be ready for new border controls on goods entering Britain.

Under the UK’s new Border Target Operating Model (BTOM), new documentary requirements will be introduced for EU businesses sending animal and plant products into the UK from 31 January, with border checks beginning in April.

Not ready

The Institute of Export & International Trade (IOE&IT) is among the industry bodies that have been warning businesses about the potential impact of BTOM for British and European businesses, as well as a range of other new rules and IT systems that are being introduced for trade.

In September 2023, it published a white paper, ‘BTOM and Beyond’, outlining changes that are due to come in over the next 18 months.

IOE&IT director general Marco Forgione told today’s FT that readiness for the new rules is “low”.

“We have a growing anxiety that the state of preparedness in the EU is very low.

“Even recognition that things are going to change is very low, and it decreases as you go down the size of business.”

Representatives from the British Chambers of Commerce (BCC) and British Retail Consortium (BRC) also told the FT that readiness among EU supplies was a “significant unknown”.

“You would expect big players to be ready, but for a smaller player — an Italian specialist in cured meats, say — it may be harder,” said BRC’s director of food and sustainability Andrew Opie. “Even in the UK government there is concern over whether all EU regional governments are up to speed. It’s a bit of an unknown”.

Difficult time for food and drink

The Times reports that the BTOM changes come at a particularly difficult time for the food and drink sector, which is also grappling with the impacts of climate change, international conflicts in Ukraine and the Middle East, and transportation crises in the Suez and Panama canals.

Professor Chris Elliott from Queen’s University Belfast said this could lead to food shortages in 2024.

“My expectation is, as we’ve already seen in 2023 with some empty supermarket shelves for months, this will become more persistent as we go forward.

“It’ll be about affordability but also availability, and the likelihood of empty shelves, particularly fresh produce shelves, in 2024 is alarmingly high.”

The IOE&IT is running a free webinar on the challenges faced by food and drink businesses – including BTOM and supply chain disruptions – on Tuesday 16 January as part of its efforts to support businesses in the sector.

The event, which will also include representatives from the Food and Drink Federation and International Meat Trade Association, will also give an overview of the opportunities ahead for UK exporters in 2024, particularly under the country’s new free trade agreements.

Digital approach

With the BTOM, the government says that the UK’s border controls are being “simplified and digitised”, reducing administrative burden for businesses.

Speaking at IOE&IT’s Import Export Show in November, cabinet office minister Baroness Neville-Rolfe DBE CMG said BTOM could save an estimated £500m per year for businesses by eradicating additional paperwork for importers and introducing a risk-based model for border checks.

Writing on PublicTechnology.net, Angela MacDonald, deputy chief executive at HMRC, said BTOM had a key role to play in helping the government build a “world-class customs capability”. She said:

“The publication of the BTOM was a really significant piece of cross-government working, setting out how we’ll simplify and digitise the way goods from across the world are imported more safely and securely into the UK.”