UK customs could be overwhelmed by smugglers after Brexit, EU official warns

4 September 2019 11:02am

3 September 2019, by Poppy Carnell and Matthew Holehouse

UK consumers could be sold counterfeit goods and the government could lose out on millions of pounds’ worth of tariffs due to an increase in smuggling after Brexit, a top EU official has said.

Britain is likely to be particularly vulnerable to a common smuggling technique, whereby criminals send large quantities of goods to a specific customs post to pressure staff into releasing them before they’re properly checked, the official told MLex on condition of anonymity.

The transition to new customs procedures, combined with the likely political pressure on customs officials to keep goods flowing, is likely to create a “big business opportunity” for smugglers using this technique, the official said.

This will be most pronounced if the UK leaves the EU without a deal on Oct. 31 — currently the default outcome. But there’s likely to be an increase in smuggling even under a less chaotic exit, the official said, as any new customs system typically faces flaws and loopholes before it’s bedded in.

The result is that goods could enter the UK market without importers paying the correct tariffs, or falsely labeled goods including counterfeit medicines could find their way to British consumers.

Flow over revenue

The UK government has already said it will prioritize the “flow” of goods over revenue collection in the event of a no-deal Brexit, while also seeking to prevent security breaches.

“In the event of no deal, the government will prioritize the flow of goods at the border,” junior Brexit minister James Duddridge told lawmakers in July. “We will continue to take a risk-based approach to controls and checks on goods at the border, minimizing additional friction to protect flow. Over the longer term, the government will look to enhance border systems and processes.”

The government faces intense political pressure to limit the potential shortages for consumers, as proponents of Brexit including Prime Minister Boris Johnson have downplayed the likelihood of such disruption. Independent forecasts, by contrast, suggest that new EU-side customs checks alone could dramatically stymie the flow of traffic.

In the event of a no-deal Brexit, the UK Treasury has introduced “easements” for traders bringing goods into the country at the roll-on, roll-off ports that handle freight to the EU and Ireland. These include allowing businesses to defer their customs declarations and payments until the following month, meaning agents won’t need to stop shipments to check whether the goods comply with their obligations.

The UK government has declined to publish forecasts of the potential loss of revenue as a result of its customs plans.

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