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Brexit and Ireland: ‘illogical’ customs rules, declining trade levels and fight with France over Brexit compensation pot

The further we get into Brexit, the more issues Ireland seems to be facing in the post-Brexit world – from ‘illogical’ custom rules, through declining trade levels and fights with France over EU compensation money.

Despite assurances that trade between Britain and Ireland would flow smoothly even after we leave the single market, the reality is proving to be quite the opposite. Exports from Great Britain to Ireland have been falling and affecting the revenues of local businesses. 

New figures from the Irish Central Statistics Office (CSO) reveal that during the month of January this year, British exports to the Republic of Ireland fell by £856 million or just under €1 billion compared to the same month in 2020.

The figures are the least attractive in the food and live animal trade where exports to Ireland fell by 75% or €62 million.

Some politicians like to blame this on the effects of the pandemic, which may well play a part, but it is also undeniable that to a large extent the post-Brexit border checks and customs clearance rules are disrupting trade. 

The Irish Road Hauliers Association are saying that not only was this to be expected but additional costs are mounting which have the potential to drive some trucking companies out of business.

In a press statement, it said: “Through engagement with transport and logistics companies, we are aware of problems and backlogs in the supply chain, particularly in GB.

“We know that the introduction of new import and export regulatory requirements alongside new checks and controls on trade between the EU and UK, excluding Northern Ireland, adds additional burdens on companies and our Departments and Agencies are continuing to engage with companies and haulage and logistics companies to help them work through these new checks and controls.”

New customs rules branded ‘illogical’ and ‘disturbing’

The Oireachtas Brexit committee labelled the new customs processes for imports arriving in Ireland from the UK as ‘illogical’ and ‘disturbing’. Shipments are being held up at Irish ports due to issues with one single item on a trailer where all the other items are ready to cross the border. 

However, these stringent rules do not apply to products imported by air or deep sea. The Irish Small and Medium Enterprise Association (ISME) said Revenue’s proposed solutions to the issue are “not practicable”.

Damian Roche, of RocheFreight, explained that the issue relates to MRN numbers – unique customs identification numbers created each time a declaration is submitted for importing or exporting goods.

He told the Committee: “You think you have your VAT or duty paid in advance because you’ve got your MRN entry number.

“But now what happens, 30 minutes out, Revenue is collecting the VAT and duty at that point. That could be after hours with ferries coming in after half six.”

This creates issues because while payments can be made at any time, Mr Roche pointed out that customers or business representatives are often uncontactable outside of business hours.

He added: “That means if you have 40 different customers on your trailer, one shipment that has insufficient funds will hold up the other 39 customers’ shipments from being delivered on the following day, because they’re held in customs until the money is paid.

“If another person clears goods for the same customer to a different port, an hour earlier than you clear the goods, that person could take the money you’ve arranged with the importer.”

The Seanad Special Select Committee on the Withdrawal of the United Kingdom from the European Union, which met on Monday was shocked to hear the way the new rules affect businesses. 

Committee Chair and Fianna Fail Senator Lisa Chambers said: “I’m a bit gobsmacked actually hear that. That seems so illogical.

“Just even the fact that you’d have one customer, who might hold up everybody on the truck seems just bizarre, that that will be allowed to prevail as a long term situation.”

The Committee concluded that they need to respond to this “in a very practical way”. 

Fight with France over Brexit compensation

With all the damage that Brexit has done to Ireland’s trade, the PM is demanding at least €1 billion out of the €5 billion Brexit compensation pot, which Brussels is ready to share out between member states. 

The EU’s Brexit Adjustment Fund is to help member states cover expenditure to counter the adverse consequences of the UK’s exit from the bloc over a period of 30 months.

The money will be divided up over the expected impact on economies.

Ireland is determined to secure almost €1billion in EU compensation, but France is attempting to reduce the country’s share. French President Emmanuel Macron has proposed a different plan to share the funds, whereby the larger states, such as France, Italy and Spain get a bigger cut of the money. 

If France was successful in changing the allocation, Ireland would lose €200million (£172.3million), according to calculations by Belgian MEP Pascal Arimont, the European Parliament’s rapporteur on the Brexit Adjustment Reserve.

If your business is affected by the stringent customs rules, get in touch with our UKCS experts! We are ready to help with any of your customs clearance requirements. 

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