Customs for businesses trading with Great Britain

A range of customs and other regulatory formalities apply to goods moving to, from or through the United Kingdom, excluding Northern Ireland.

Currently approximately 80% of inbound Great Britain (GB) to Ireland movements are being green routed on arrival meaning they can leave the port without the need for additional interaction with Customs or other State agencies.

For the remaining approximately 20%, certain goods are orange routed meaning they need a documentary check or similar control, and some goods are red routed meaning there is a requirement for a physical examination or inspection of the goods.

Correct Documentation
The submission of relevant documents and the required customs import and safety and security declarations for all consignments on board a vehicle coming from GB to Ireland significantly enhances the ability of Revenue and the other agencies to carry out risk analysis and complete documentary checks when the goods are en route to Ireland.

If the information provided on customs declarations is incomplete, or the required documentation is not available, goods will be held up at the port. Timely and accurate information and data is essential in all aspects of dealing with customs and other regulatory formalities.

Common Issues
Some of the common issues Revenue encounter include:

  • Pre-Boarding Notification (PBN), which requires the MRNs from the customs declarations for all the goods on a vehicle, are not completed correctly. For example, not all goods on board have customs declarations associated with them.
  • Pre-notification and/or supporting documents not provided to the relevant State Agencies: Department of Agriculture, Food and the Marine – Health Service Executive: Environmental Health Service
  • Insufficient funds in the payers Revenue account to cover the payment of duty and VAT due at time of import. Businesses need to ensure the relevant codes are entered on import declarations when they intend to avail of postponed accounting and claim preferential duty.
  • GB distribution hubs: The duty implications of EU goods imported through GB distribution centres has led to unexpected duty liabilities for Irish businesses. Revenue has outlined scenarios relating to goods that pass through the UK on their way to Ireland and their treatment on arrival in Ireland under the Union Customs Code and the EU-UK Trade and Cooperation Agreement. You will find further information in eCustoms Notification 14/2021.

Businesses need to look closely at their supply chain and talk to the other key players in it. It is essential that everyone in the supply chain – from the exporter to the customs agent, to the importer, to the logistics, freight forwarder or haulage business, to the driver – knows and understands the role that each person or business in the supply chain will play.

The supply chain needs to operate and function as an integrated whole and the relevant customs and other regulatory formalities need to be completed on a timely and efficient basis.

When goods are held up, hauliers are dependent on either the importer or exporter or their agent to fix the shortcomings in documentation before the goods can be cleared and moved from the port. Sharing of the relevant documentation and / or information ensures faster resolution of outstanding issues and enables the goods to move out of the port as quickly as possible.

The Windsor Framework ensures that there is no hard border on the island of Ireland which means goods can move throughout the island without the need for customs declarations or other customs formalities, this includes goods moving from IE (Republic of Ireland) to NI and from NI to IE.

More information can be found at www.revenue.ie/en/customs/businesses/brexit/

Further information on customs procedures or any of the above is available on the Revenue website www.revenue.ie/en/customs/businesses/index.aspx. Any queries not covered by the material available can be emailed to importpolicy@revenue.ie.

Origin
Rules of origin determine where goods originate for the purposes of customs, i.e., not where they have been shipped from, but where they have been most substantially produced or manufactured. As such, the ‘origin’ is the ‘economic nationality’ of the traded goods. In the case of the EU-UK Trade and Co-operation Agreement (FTA), only goods considered as originating in the EU (i.e. having EU origin) or in the UK (i.e. UK origin) may benefit from preferential treatment and zero tariffs. All other non-originating goods (i.e., those mainly manufactured in a country other than the UK or which have had minimal processing in the UK) may be subject to tariffs and customs duties at the EU’s border, and vice versa.

There are a number of steps that must be followed to claim preferential treatment, based on the EU-UK FTA. A claim shall be based on:

a) a statement on origin that the product is originating made out by the exporter;
or
b) the importer’s knowledge that the product is originating.

Statement on Origin
A Statement on Origin is made out by the exporter, based on information that they hold that proves the rule of origin is met, on the Commercial invoice, or and document from which the goods are easily identifiable. The precise wording on the Commercial Invoice must be: (Period from _ to _ ) The exporter of the products covered by this document [Exporter Reference Number] declares that, except where otherwise clearly indicated, these products are of [state country of origin, i.e., GB] preferential origin.
To prove the below-mentioned rules, customs officers may ask the importer for the following:

  1. If the claim was based on a statement on origin (U116), that statement on origin; and
  2. Information pertaining to the fulfilment of origin criteria, which in this case would be;
  • where the origin criterion is based on a value method, the value of the final product as well as the value of all the non-originating materials used in the production of that product.
  • where the origin criterion is based on a specific production process, a description of that specific process.

Importers Knowledge
Where the importer is claiming preference based on Importers Knowledge (U117), they should have the information to prove that the rule of origin has been met.

Where it is a value rule, for example, vehicles, the importer should have the information necessary to demonstrate that the value of the materials not originating in the UK used does not exceed 45% of the ex-works price of the vehicle. The importer should be in possession of information on the ex works price of the product and a breakdown of the value of the inputs used (originating and non-originating materials used, as well as all other incurred costs). Moreover, the importer may need to demonstrate that the originating materials are actually originating.

Carbon Border Adjustment Mechanism (CBAM)
The EU’s Carbon Border Adjustment Mechanism (CBAM) is the EU’s tool to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries.

By confirming that a price has been paid for the embedded carbon emissions generated in the production of certain goods imported into the EU, the CBAM will ensure the carbon price of imports is equivalent to the carbon price of domestic production, and that the EU’s climate objectives are not undermined. The CBAM is designed to be compatible with WTO-rules.

CBAM will apply in its definitive regime from 2026, while the current transitional phase lasts between 2023 and 2025. This gradual introduction of the CBAM is aligned with the phase-out of the allocation of free allowances under the EU Emissions Trading System (ETS) to support the decarbonisation of EU industry.

The products currently included in CBAM are cement, iron and steel, aluminium, fertilisers, electricity and hydrogen, a full list of the relevant products and their CN codes are listed in Annex 1 of the CBAM Regulation; entering a CN code in TARIC will also indicate if the good is listed under the CBMA Regulation. The transitional phase, which lasts between October 2023 and end December 2025, is for reporting purposes only. Quarterly reports must be submitted, by an importer of a CBAM product, to the CBAM transitional registry at https://customs.ec.europa.eu/.

Further information on CBAM can be viewed here on the EU Commission’s webpage, https://taxationcustoms.ec.europa.eu/carbon-border-adjustment-mechanism_en. If you have any additional queries, you can email the EPA (as Ireland’s National Competent Authority) at cbam@epa.ie; or Revenue Customs at importpolicy@revenue.ie.

For further information visit www.revenue.ie or scan the QR code.