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Revenue not planning for customs posts but says it is ready for no-deal Brexit

Revenue has scaled up its Customs IT systems to handle the increased transaction levels.

Image: Eamonn Farrell

REVENUE IS NOT planning for customs posts along the border with Northern Ireland, an Oireachtas committee will be told today, but will instead operate controls and checks on a risk-based approach at traders’ premises. 

The body also believes itself to be ready for a no-deal Brexit as the upgrading of its Customs IT systems to handle the increased transaction levels is on track. 

However, it is preparing for a massive increase in import and export declaration forms – from last year’s figure of 1.7 million to in the region of 20 million.

Revenue chairman Niall Cody will tell the Joint Committee on Finance, Public Expenditure and Reform and An Taoiseach that the government has made it clear that its overriding objective is to avoid a hard border on the island of Ireland.

“Revenue is not planning for customs posts. The government has indicated that in the event of no deal, it will engage in intensive discussions with the EU Commission and our EU partners and Revenue will provide whatever technical expertise and assistance may be required during this process.”

He will say that current proposals and plans will see checks take place at “traders’ premises”. 

“Revenue’s overarching approach is to carry out the required customs controls through a risk-based programme of post clearance checks and customs audits which, to the greatest extent possible, will take place at traders’ premises, away from the point of importation,” Cody will tell the committee in his opening statement.  

Prepared for a no-deal Brexit 

He will also outline that the Revenue Commissioners is prepared for a no-deal Brexit. 

His comments come following an intense few days of talk surrounding the border in a no-deal scenario.

On Tuesday, a European Commission spokesman Margaritis Schinas said that it’s “pretty obvious” that a no-deal Brexit would lead to a hard border between Ireland and Northern Ireland. He clarified a day later that the Commission will “do all it can, deal or no deal, to avoid the need for a border”.

Agriculture Minister Michael Creed also repeatedly refused to directly answer a question on RTE’s Morning Ireland over whether there would be a return to border checks on the island of Ireland in the event of a no-deal Brexit yesterday.

government spokesperson also maintained that there are no preparations underway for a hard border. However, he added that contingency planning for a no-deal Brexit in areas such as health, education and transport is already getting underway.

Then on Wednesday, the European Union’s lead negotiator Michel Barnier said: 

There will be checks in case of a no-deal Brexit.

‘Significant challenges’

In his opening statement, Cody discusses customs issues in a no-deal scenario.

In a no deal scenario, the free circulation and movement of goods between EU Member States and the UK will end. This will pose significant challenges for Ireland and other Member States, as well as for the UK. Irish businesses engaged in trade with the UK will be obliged to comply with customs procedures and controls.

He states that if the UK leaves the EU Customs Union, it will become “a third country and the free circulation and movement of goods between EU Member States and the UK will end”.

If this occurs, it will “substantially increase” the proportion of Revenue customers who are required to deal with customs formalities and other related obligations, he adds.

Cody explains this will pose a significant challenge for many businesses which do not have any experience of third country trade and what it entails.

To give context, he outlines the numbers. At the moment, about 17,000 businesses trade with third countries. Last year, Revenue’s electronic systems processed 898,000 import declarations and 762,000 export declarations. About 5.6 million transport documents were declared in the eManifest system, related to this trade.

Annually, 39,000 transit declarations and 100,000 Safety and Security declarations are made through the Import Control System.

Businesses trading with the UK do not have to deal in any of the above. In 2017, about 84,000 businesses engaged in UK trade – more than half described as regular trader. 

“Post Brexit, import and export declarations could increase to as many as
20 million per annum,” Cody calculated. 

Scaling up IT systems

He outlines that Revenue has invested in scaling up its Customs IT systems to handle the increased transaction levels.

Outlining the added pressures, he notes that Revenue systems were not originally designed to handle the number of customs transactions that can be expected post Brexit.

In Budget 2017, he said the Minister for Finance included provision for a €2 million investment in scaling up the customs IT framework and carry out significant work to increase systems capacity to cater for trade with the UK as a third country.

“All our IT preparations are currently on schedule. Based on the progress made to date, and the robustness of our testing programmes, we are confident that by the end of March 2019, our IT systems will handle the increased transaction levels in a no deal scenario,” states Cody.

Staffing levels

The committee will be told that the Revenue’s initial planning process was based on the assumption of the withdrawal agreement would be agreed and the Brexit transition period would last until the end of 2020.

At the time, Revenue determined that an additional 600 staff would be required.

In Budget 2017, funding provided for 40 additional Revenue staff to prepare for Brexit. In September 2018, the phased recruitment of additional staff was approved and an open recruitment campaign for Customs Officers to work on a 24/7 basis was rolled out.

More than 3,000 applications were received and successful candidates completed a five-week training programme before Christmas.

Cody will tell committee members that Revenue is on track to have enough staff in place come 29 March – the day the UK is due to leave the EU. 

In preparation for a no-deal Brexit, we have accelerated and expanded our recruitment and training schedules to meet the end of March deadline.
We are on track to have over 400 additional staff in place by the end of March; we have re-assigned serving staff, are preparing for any necessary further redeployments on a temporary basis; and will have the balancing complement of additional staff recruited by the end of 2019.

At risk groups 

In addition to outlining the work that has gone on to engage with businesses impacted, Revenue has identified two key trader groupings that are expected to be “significantly impacted by Brexit”.

These are large economic operators who trade with the UK and logistics companies and freight forwarders.

Cody will tell politicians today that Revenue is “strongly focused on facilitating the efficient and timely movement of goods in compliance with customs controls, post Brexit”.

We will continue to work to support trade and businesses. We are determined that all that is in our control to do, will be done. Revenue will be as ready as we can possibly be, to deal with the outcome of unfolding political and policy developments.

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