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Timing of new customs declaration system could cause Brexit issues

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Oilfield Technology,

Adam Johnson, director of Leeds-based Tudor International Freight, said the key implementation period for replacing the Customs Handling of Import and Export Freight (CHIEF) system by the Customs Declaration Service (CDS) could now be coming at the worst possible time.

Mr Johnson explained: “CHIEF was introduced about 25 years ago, to process customs declarations for all goods being shipped between the UK and non-EU countries. It’s one of the world’s largest and most sophisticated systems of this type but its weaknesses include it can no longer be adapted easily to new requirements.

“Although CHIEF’s replacement has been planned since before the Brexit referendum, delays in introducing CDS mean it’s increasingly unlikely transition to the new system will be complete by the time we’re due to leave the EU on 29 March.”

Mr Johnson said that, in addition to the operational challenges of adopting a very different platform, concerns for oil and gas sector businesses and their freight forwarders, like his own organisation, included over CDS’s capacity. A no-deal Brexit would mean trade with EU countries having to be recorded on it from the date of the UK’s departure, which would lead to a massive increase in the number of import and export declarations a largely unproven system had to handle.

He said companies involved in trading with non-EU countries were already aware of the extensive backlogs that could arise at ports and airports when CHIEF went down.

Mr Johnson said any such problems would, of course, compound the new import and export tariffs and other issues a no-deal Brexit would generate for oil and gas sector EU traders.

Outlining the background to the current position, Mr Johnson explained: “HMRC originally intended that CDS would be delivered in three phases, being ready for imports last November and exports this month. CHIEF, which would continue to run for a time to aid the transition, would then be withdrawn.

“The first release of CDS went live, as planned, last August. But late last year HMRC said availability of full import functionality was being postponed until ‘after Christmas’. It also emerged that a new electronic tariff, needed for the databases software firms are producing, would be published substantially later than envisaged.”

Mr Johnson stressed his organisation still saw the introduction of CDS in principle as important and beneficial.

He said: “CDS, which will be accessed through a Government Gateway account, will offer several new and existing services in one place. These include traders and forwarders being able to view previous export and import data on pre-defined reports, check tariffs and apply for new authorisations and simplifications. In addition, useful online help will include self-service tools, guides and checklists.

“But traders and forwarders will also have to enter some additional details not required by CHIEF, including an audit trail of previous document IDs, additional party types - such as buyers and sellers - and potentially additional commercial references or tracking numbers too.”

Mr Johnson said numerous additional differences between using CHIEF and CDS included over location of goods identifications, warehouse-type code lists and the way customs procedures were quoted.

He said: “Overall, the possibility of the main CDS implementation period now coinciding with a no-deal Brexit - the chances of which have increased in recent weeks - threatens to make a bad situation even worse for oil and gas sector EU traders and their forwarders.”

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