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Economics

Trading places: understanding the UK’s new border rules

New UK border checks aim to restructure the process of importing goods, plants and animals from the EU. Here, we examine how the Border Target Operating Model (BTOM) could affect UK businesses.

The new framework, called the UK Border Target Operating Model (BTOM), will replace the existing EU-based system, and is intended to create a targeted, proportionate, risk-based approach to import checks.

However, new responsibilities placed on both importers and exporters could lead to supply chain delays in the short term, as well as additional costs for UK and EU businesses, says Rowan Austin, our Head of Trade Origination and Advisory, Corporates & Institutions.

“Until now, exports from the EU to the UK were happening in broadly the same way as they were pre-Brexit,” he says. “But with the additional paperwork and physical checks now required, the main challenge will be whether the UK’s technology and infrastructure are ready for the additional load.

“There will also be a cost to EU and UK businesses to process the new paperwork and carry out animal health and phytosanitary checks, which may be passed on to customers in higher prices. This could in turn contribute to inflation, which is clearly a concern in the current environment.”

Supply chain delays as businesses adapt to the new rules, especially for foodstuffs and goods that have a limited shelf life, are another potential concern. And port authorities will have to be flexible to ease bottlenecks when they occur, Rowan says.

But once the new model is fully up and running, there could be potential for UK businesses to take advantage of a reshaped market.

“Some smaller EU exporters may drop out of the UK market completely because of the additional checks and paperwork required, and that could present opportunities for domestic producers to fill in the gaps.

“And supply chains do adapt. We learned during Covid that when you stretch them, they squeak, but they’re adaptable. If one supplier drops out, another usually emerges.”

Risk-based system

The BTOM covers the Safety and Security (S&S) controls applying to all imports, and the sanitary and phytosanitary (SPS) controls applying to imports of live animals, germinal products, animal products, plants and plant products.

The regulations now categorise imports by their risk level – intended to help simplify imports of low-risk items by removing the certification requirements, while maintaining stringent checks for items considered high risk.

Import certificates will be digitised to further modernise the import process, and a network of Trusted Traders will eventually be established to offer businesses ways to manage their controls more easily.

The BTOM is being deployed in three phases throughout 2024

Phase One

Beginning 31st January   EU businesses exporting medium-risk plant and animal products to the UK are required to submit additional paperwork called health certificates.

Phase two

Beginning 30th April – Physical checks to medium-risk products will be introduced. Existing inspections of high-risk plants and plant products from the EU will move from the destination point to border control posts.

Phase three

Beginning 31st October – S&S declarations for imports from the EU will become mandatory.

The first step for businesses is to establish the risk level of the product being imported, which will determine the next steps to follow. A list of the risk levels for each product is available on the Government’s BTOM document.

Risk factors will be reviewed regularly, and commodities can be moved into higher or lower BTOM risk categories in future, to reflect changing levels of risk.

Low risk category

To import low-risk goods, businesses need to notify border authorities through the Import of Products, Animals, Food and Feed System (IPAFFS) prior to the arrival of the goods. No health certificate is required for low-risk goods, but they must be accompanied by a commercial document from the supplier.

Medium risk category

The importation process for the medium-risk category also involves notifying authorities via IPAFFS before the goods arrive in the UK. From 31st January 2024, a health certificate issued in the country of origin is required for medium-risk goods. From 30th April 2024, these products may also be subjected to physical checks.

High risk category

In the case of products in the high-risk category, similar procedures apply. It is mandatory to notify the authorities using IPAFFS before the goods arrive in the UK and a health certificate is also required. High-risk category consignments already undergo physical import checks, which will continue.

Protecting UK biosecurity through effective border controls on the goods that we import is so important. These border controls safeguard the food that we eat and protect animal and plant health across the UK. The Border Target Operating Model sets out our innovative system of border controls, which will continue to uphold UK biosecurity and support trade with other countries.

Lord Benyon, Minister for Biosecurity at the Department for Environment, Food and Rural Affairs
Gov.uk

The Single Trade Window

Along with the new border checks, a UK Single Trade Window is being developed to simplify border requirements for importers, by creating a single entry-point for users to submit data to border agencies.

The cross-Government programme is a collaboration between HMRC and all agencies responsible for border processes and IT systems. More than 25 Government departments and agencies that have a presence at the border are involved in the Single Trade Window’s design and delivery.

“We’re going to be testing the new system in real life now which could present some initial challenges,” Rowan says. “But the Government’s ambition is to make the UK border one of the most technologically advanced in the world. And it’s also about creating a level playing field from a competitive perspective.”

Follow us on social media to stay up to date with the latest trade rules and trends, and get in touch with Rowan to learn more about how these rules might affect your business.

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

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