UK customs controls delay a reprieve for Irish exporters

Irish agri-food exporters got a welcome reprieve after the UK government announced a six month delay to customs controls that were due to come into effect today.

Food producers had been expected to produce certain customs documents and certificates signed by vets to move 'products of animal origin' into Britain.

Those checks will now start in October. Full processes for some other imports will not come into force until January 2022.

Carol Lynch, Partner in BDO Customs and International Trade Services, said it was a welcome reprieve on both sides of the Irish Sea as Irish exporters were not ready for new UK import controls, had they been implemented from today.

"I don't think people were ready. It's been very difficult to get the preparation work in place for imports into Ireland from the UK and I don't think anybody was really clear as to what was due to happen today."

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The UK has provided for a staggered implementation of customs checks, while the EU introduced controls on UK imports on January 1.

UK goods exports to the European Union fell 40.7% in January, according to the UK's Office for National Statistics, while imports tumbled 28.8%. UK exporters have been facing huge amounts of paper work and controls as have Irish importers of UK goods.

"Imports into Ireland from the UK have seen quite a dramatic upheaval," Ms Lynch said. "The UK is transitioning whereas in Ireland and the EU, all the controls came in overnight. January was pretty difficult and a lot of goods were held up or they just didn't make it out of the UK. 

It has been a difficult adjustment for Irish businesses, adapting to the new trading relationship between Ireland and the UK.

Vegan food business, fiid, front loaded stock into UK warehouses at the end of last year to avoid tariffs and backlogs at ports.

Founder, Shane Ryan, said it has put a strain on cashflow having to fund stock that is sitting in a warehouse. "It's definitely not something we can do even in the medium term.

"We've had to hire someone full-time to deal with the level of customs administration that we have to deal with, so, even though the UK is not a core part of our business, we have felt the effect quite strongly of doing business there."

The Naked Collective, a new healthy drinks company based in Co Kildare, invested over €300,000 in stock production in the UK in December to ensure there was enough stock to supply Europe in case of a hard Brexit.

"Brexit has caused chaos in the annual review programs that big retailers do on assessing new products," said Niall Phelan, Founder of The Naked Collective. "The dates keep getting pushed out and that has delayed our launch across the UK. We are confident it will come but its been very challenging to manage ever moving timelines for our UK launch."

Three months after EU import controls were introduced, Irish importers are starting to see more movement from the UK.

"People have got used to knowing what the controls are, what paperwork they need to have in place and what health certs they need to have in place, and while they were getting hit with customs duties that they weren't expecting, things are starting to move," Ms Lynch said. "We are seeing an uptake in freight and we're seeing less and less of the red routing or orange routing where the goods are stopped at ports and don't get through."

The British government delayed the checks due to be introduced today, to soften the impact on business in the UK and give traders time to focus on getting back on their feet as the UK economy opens up after a difficult year. It is the second time the UK government has delayed introducing these controls, and it is widely acknowledged that the government itself needed more time to get customs agents and port infrastructure in place to implement checks.

Ms Lynch said, "The UK Government is saying they absolutely will be ready by the first of January, and I think they probably can't push it forward any further than that, but there is a lot of work that needs to be done over the next six months."

The extension of the implementation of UK import controls was a welcome reprieve all round.