Revenue preparing for potential UK import reclassification

If no special deal done UK may ‘revert to third-country status’, says Michael Noonan

Minister for Finance Michael Noonan on British cargo: “Because, worst-case scenario, if there isn’t a deal done with the UK they will revert to third-country status under the WTO.”

Minister for Finance Michael Noonan on British cargo: “Because, worst-case scenario, if there isn’t a deal done with the UK they will revert to third-country status under the WTO.”

 

The Revenue Commissioners are drawing up contingency plans in the event imports from the UK should be reclassified as third-country goods in the aftermath of Brexit negotiations.

That classification would place British cargo on the same footing as other non-EU countries and could have consequences for customs checks.

On Wednesday, the Oireachtas Finance Committee heard the department’s group of votes for 2017 budget allocation was at €389 million, a 3 per cent increase from €379 million in 2016.

“The primary driver of this increase is the provision of €10 million for the Office of the Revenue Commissioners relating to increasing staff numbers and other staff costs,” Minister for Finance Michael Noonan said.

Revenue officials are examining a number of scenarios for customs implications, and the 2017 budget will allow for 40 additional staff to plan for Brexit-related trade issues.

Mr Noonan held discussions with the chairman of the Revenue Commissioners two weeks ago and explained how British cargo might ultimately be processed. “Because, worst-case scenario, if there isn’t a deal done with the UK they will revert to third-country status under the WTO [World Trade Organisation],” he said.

Colour-coded

At the moment, Revenue operates a colour-coded system with green, orange and red channels allocated to various goods.

“If you are coming in say from the Americas everything has to be transferred electronically to customs in advance,” Mr Noonan said.

“The present procedure is 92 per cent [of goods] are cleared in advance electronically . . . and they just go through when the containers come in without check.”

In the orange zone, officials request a manifest without a physical check. In total, less than 2 per cent of cargo is physically checked.

Should UK goods fall into that status following Brexit negotiations, this would affect the volume coming through these channels.

“The Revenue are doing contingency planning but they haven’t been directed from a policy point of view in any respect. It would be prudent for them to be looking at options but that is all they are doing at present,” Mr Noonan said.

“From a Government policy point of view we don’t envisage customs activity on the Border but it will depend on where the negotiations go.”

Meanwhile, the Minister reiterated that the earliest possible IPO window for offloading a 25 per cent stake in AIB would be the second quarter of 2017.

Questioned on whether he would seek Oireachtas support for the sale, Mr Noonan said this would not be required but he would envisage a Dáil debate.

“It would be very difficult for me to proceed if I thought there was a majority of Dáil Éireann against it,” he said.

However, he later said he was not even certain the 25 per cent sale would proceed this year and that t was entirely discretionary: “It’s a long game.”