Brexit: Customs and Transport Update – Steve Gourley, Momart Ltd.
When I signed up for ERC back in July, I’d rather hoped that the politicians would have agreed the terms of Britain’s exit from the EU and that this conference would be a great opportunity to hear from sector leaders and discuss with fellow registrars how we were going to deal with some of the finer points of managing life outside the EU. At the time of the conference, the Withdrawal Agreement was still to be agreed by the UK parliament and the governments of the remaining 27 EU nations, and a draft statement on the UK’s future relationship with the EU, just 7 pages long, had been published. If these are approved, there will be a transition period until 31 December 2020, during which little would practically change. However, there remains the real chance that these will not be. This means that, on the basis of “preparing for the worst but hoping for the best,” Steve Gourley offered the conference some thoughts on how fine art transport would be affected in a “No Deal” scenario.
Customs:
In a “No Deal” scenario in which the UK were to leave the Single Market and customs union abruptly on 29 March 2019, every shipment leaving and entering the UK would need a customs declaration. This would mean that any applicable duty and VAT would also need to be paid at the point of entry to bring goods into free circulation. While the government’s White Paper promises that the NIRU system of tax and duty reliefs for temporary imports for exhibition would continue to operate, museums who are not NIRU registered or who import acquisitions outright may need to take this into consideration in budget planning. That said, duty and VAT rates are likely to mirror current EU rates and there are plans to allow VAT registered businesses to account for import VAT via their quarterly VAT returns, rather than paying it at point of entry and reclaiming it. Nonetheless, there is likely to be a fivefold increase in the number of customs declarations that are made, which will place a huge demand on existing customs entry clerks, as well as the shipping agents’ exhibition co-ordinators who communicate information on museums’ behalfs to the customs clerks, and on customs and border force agents at ports who have to check these declarations and goods.
In addition, HMRC is in the process of implementing a new customs declaration software system, ironically to implement the new EU customs data entry module. This means more data is needed, and it is no longer possible to combine different importers and procedures on the same declaration.
Shipments travelling by road into and out of the EU will also need a transit declaration, under which a principal, usually the shipping agent, guarantees to pay any applicable duty and VAT while the goods are in transit. As insurance values of works of art rise, the shipping agents are being asked for ever higher levels of guarantee, which may limit the total value that can be shipped in a single consignment, as well as the number of shipments that can operate at any one time.
From the point of view of export licenses, museums would only need to worry about obtaining UK export licenses. The OIEL and OGEL would continue to operate, and these allow export to any destination in the world. His could simplify and streamline the process, but they would still need to be presented and checked on leaving the UK. CITES checks at UK ports would also be needed, and Steve expressed the hope that DEFRA would be able to issue travelling CITES permits, which make moving controlled specimens to the USA much simpler.
Road:
When I signed up for ERC back in July, I’d rather hoped that the politicians would have agreed the terms of Britain’s exit from the EU and that this conference would be a great opportunity to hear from sector leaders and discuss with fellow registrars how we were going to deal with some of the finer points of managing life outside the EU. At the time of the conference, the Withdrawal Agreement was still to be agreed by the UK parliament and the governments of the remaining 27 EU nations, and a draft statement on the UK’s future relationship with the EU, just 7 pages long, had been published. If these are approved, there will be a transition period until 31 December 2020, during which little would practically change. However, there remains the real chance that these will not be. This means that, on the basis of “preparing for the worst but hoping for the best,” Steve Gourley offered the conference some thoughts on how fine art transport would be affected in a “No Deal” scenario.
Customs:In a “No Deal” scenario in which the UK were to leave the Single Market and customs union abruptly on 29 March 2019, every shipment leaving and entering the UK would need a customs declaration. This would mean that any applicable duty and VAT would also need to be paid at the point of entry to bring goods into free circulation. While the government’s White Paper promises that the NIRU system of tax and duty reliefs for temporary imports for exhibition would continue to operate, museums who are not NIRU registered or who import acquisitions outright may need to take this into consideration in budget planning. That said, duty and VAT rates are likely to mirror current EU rates and there are plans to allow VAT registered businesses to account for import VAT via their quarterly VAT returns, rather than paying it at point of entry and reclaiming it. Nonetheless, there is likely to be a fivefold increase in the number of customs declarations that are made, which will place a huge demand on existing customs entry clerks, as well as the shipping agents’ exhibition co-ordinators who communicate information on museums’ behalfs to the customs clerks, and on customs and border force agents at ports who have to check these declarations and goods.
In addition, HMRC is in the process of implementing a new customs declaration software system, ironically to implement the new EU customs data entry module. This means more data is needed, and it is no longer possible to combine different importers and procedures on the same declaration.
Shipments travelling by road into and out of the EU will also need a transit declaration, under which a principal, usually the shipping agent, guarantees to pay any applicable duty and VAT while the goods are in transit. As insurance values of works of art rise, the shipping agents are being asked for ever higher levels of guarantee, which may limit the total value that can be shipped in a single consignment, as well as the number of shipments that can operate at any one time.
From the point of view of export licenses, museums would only need to worry about obtaining UK export licenses. The OIEL and OGEL would continue to operate, and these allow export to any destination in the world. His could simplify and streamline the process, but they would still need to be presented and checked on leaving the UK. CITES checks at UK ports would also be needed, and Steve expressed the hope that DEFRA would be able to issue travelling CITES permits, which make moving controlled specimens to the USA much simpler.
Road:
The main issues here are likely to be:
- Licenses and qualifications: If the EU does not recognise UK HGV driving permits, drivers won’t be able to drive overseas. There are two conventions in operation in the EU, one signed in 1948 and another in 1968. UK drivers will not be able to apply for permits under the 1968 convention until February 2019.
- Vehicles: The UK has been allocated 984 European Community MT permits. These cannot yet be applied for and will likely be allocated to companies transporting food and medicines first. It may, however, be possible to revive the bilateral agreements that were in place before the UK joined the EU.
- Congestion: Even if trucks can leave the UK, there will be congestion at ports as every shipment needs to be declared to customs and some will need full checks. While this happens, vehicles will need to park somewhere, and there is not space at ports. There are plans to use the M20 in Kent for this. Any facilities for crew comfort will be limited and not courier friendly.
Again there are likely to be issues caused unless agreement can be reached to mutually recognise pilot and crew licenses and qualifications as well as air service agreements and standards. As far as aviation security goes, the UK has very high standards, so one would hope that goods declared Known in the UK would not need to be re-examined. However, the default position is that the EU will not recognise UK Known Consignor declarations, and goods would need to be re-examined, which would take time.
In summary, the most prudent approach for registrars seems to be to plan in extra time for shipments and to talk to DCMS bout any large, delicate or high value shipments due to move to and from the EU in the six months following 29 March.
Written by Susannah Darby, National Museums Scotland
