BIFA: Only a lengthy Brexit transition can prepare for CDS introduction

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Forwarders in Britain are pinning their hopes on a lengthy Brexit transition so that they can prepare for the introduction of the new Customs Declaration Service, says Robert Keen, director-general of the British International Freight Association.

Keen, HMRC and the customs software supplier Agency Sector Management (ASM) are running a series of seminars on CDS around the country that will have been presented to nearly 900 delegates by July 10.

For the past 24 years, British businesses trading outside the EU have used HMRC’s 9her Majesty’s Revenue and Customs) Customs Handling of Import and Export Freight (CHIEF) system to make customs declarations.

The decision to replace the relatively old CHIEF with CDS, which has greater capacity and fulfils some recent legislative requirements, was taken before the EU referendum in 2016.

Brexit challenge

However, the challenge from the simultaneous introduction of CDS and Brexit is huge. CHIEF deals with 55 million customs declarations each year, but when Britain leaves the European customs union, this could rise to 255 million.

If there is no transitional customs agreement with the EU, the industry faces the cliff edge of extra pressure on CDS and on companies trying to deal with complexities of the new arrangements.

Alongside the seminars and other communications with the industry, HMRC is also working hard to test and prepare CDS and has raised the possibility of retaining at least part of CHIEF as a contingency for extra capacity.

Despite the challenges HMRC plans to begin migrating traders to the system from next month.

A spokesman told Air Cargo Week: “We remain on track to deliver CDS by January 2019 and are building it to manage any potential increase in customs declarations following the UK’s exit from the EU.

“The timetable remains tight but we are actively managing potential risks and will continue to operate the current service (CHIEF) in tandem with CDS during the transition from one system to the other, providing additional assurance.”

Robert Keen of BIFA said that it would be helpful if there was a transitional period in the Brexit process lasting to the end of 2021 to allow forwarders to have two years of familiarisation.

HMRC customs transformation programme director, Kevin Franklin, says: “We have been engaging closely with trade representatives including software developers, community systems providers, freight forwarders, and traders themselves about CDS.

“We value the support from organisations like BIFA and ASM in preparing importers and exporters for the upcoming changes, and we will continue to work closely with them to support businesses throughout the transition.”