UK’s Border plan ‘could undermine North’s place in customs territory’

Leaked letter from UK international trade secretary offers stark warnings about plans

Liz Truss, the international trade secretary, has warned about the UK’s Brexit plans for the Border.

Liz Truss, the international trade secretary, has warned about the UK’s Brexit plans for the Border.

 

UK prime minister Boris Johnson’s Brexit plan for the Border could call into question Northern Ireland’s place in the UK customs territory, a key member of his cabinet has warned in a leaked letter.

International trade secretary Liz Truss also warned of the danger of tariffs being circumvented “due to a lack of checks at the Border”.

Britain is set to leave EU trading and customs rules at the end of the year, but London announced last month that full border controls would not be applied on goods until July 2021.

Ms Truss wrote to chancellor of the exchequer Rishi Sunak and chancellor of the Duchy of Lancaster Michael Gove outlining four “key areas of concerns” about the UK’s plan.

Under the heading, Northern Ireland Protocol risks, Ms Truss said failure to deal with her concerns would have “political, legal and reputational risks” for the UK.

“I understand that the digital delivery of the dual tariff system [both EU and UK tariff] in Northern Ireland is a high risk and that HMRC are planning to apply the EU tariff as a default to all imports in Northern Ireland on January 1st, 2021,” she said.

“This is very concerning as this may call into question Northern Ireland’s place in the UK customs territory. Failure to deliver the UK tariff digitally in Northern Ireland would have political, legal and reputational risks.”

WTO challenge

Elsewhere in the letter, Ms Truss warns that the UK “will be vulnerable to World Trade Organisation challenge regarding its border regime” when it exits the transition period.

“This is especially relevant concerning the implementation of the Northern Ireland protocol and the application of the staged approach,” she said.

“These measures could significantly impact on the UK’s reputation at the WTO and I would appreciate your assurance that full border checks for EU-GB goods will be implemented no later than July 2021 and that all messaging will clearly reflect this point.”

In relation to controls at the Border, the letter, the contents of which were first reported by Business Insider, said there were “challenges to delivering tariff declaration systems on both EU and rest of world imports”.

“But, to ensure we can develop appropriate handling plans for national and international stakeholders, it is essential that my department has a clear view of operational delivery plans, timescale and risks going forward.”

Ms Truss said this was “particularly important for controlled goods at those EU-facing ports where the infrastructure to implement controls does not currently exist”, and warned of the dangers of goods being smuggled into the UK.

“Given the legal, reputational and security risks, I would like assurances that we are able to deliver full control at these ports by July 2021 and that plans are in place from January to mitigate the risk of goods being circumvented from ports implementing full controls,” she said.

“I have some further concerns about tariff collection due to the staging in approach, especially around the increased likelihood of circumvention, where rest of world traders could import their goods via the EU.

“This would undermine the effective operation of our trade policy, as well as create significant handling difficulties with negotiating partners.

“For example, it might lead to remedy tariffs being circumvented due to a lack of checks at the Border, in addition to impacts on tariff rate quotas.

“Further, I am seeking assurance that tariffs on goods from rest of world, specifically from countries where the Trade Agreements Continuity Programme applies, will also be payable from January 1st, 2021, and will be collected within one month, as is currently the case.”

Ms Truss concluded her letter by emphasising the need to ensure the border “is effective and compliant with international rules, maintaining our credibility with trading partners, the WTO and with business”.