Customs Change Between UK and EU Could Cause Delays
Shippers in Europe are going to face some complexities and potential delays with cargo moving between the United Kingdom (UK) and the European Union (EU) starting on New Year’s Day. This can all be attributed to new Customs regulations and rules, WCO HS Code updates, and Customs system changes.
UK leaves EU: Changes to Customs Process
UK left the EU in early 2020. This meant the country also left the EU Customs Union, which plays a big role in the efficiency of international shipments. It was understood that these changes in alliance would cause disasters with shipping, so as a preventative protecting measure, the EU instituted the Staged Customs Control (SCCs) to lessen the burden on imports going into the UK from the EU. However, these are expiring after 2021 is over, making it imperative for importers to prepare for more stringent Customs processes.
The new Customs formalities that will be applied to the UK will require everyone to quickly learn several different systems and processes related to Customs cargo clearing to keep goods moving efficiently in and out of the country.
Last January, the UK introduced the Goods Vehicle Movement System (GVMS), which was being used in the Customs process in preparation for migrating away from the EU. While the new system is great, it is certainly an adjustment to shippers, and come January, it will no longer live in “optional” territory. Several ports may use the GVMS exclusively, meaning shippers need a clear understanding of how the system, process, and associated technology works to keep their goods from getting rejected, delayed, or penalized.
HS Code Changes on Jan 1st
The GVMS implementation will be a massive shift for shippers to get used to, but alongside this change, additional discretion by shippers will need to be placed on HS Codes for their cargo, as several changes are happening beginning on January 1st.
HS Codes, created by the World Customs Organization (WCO) are a list of 10-digit codes used to precisely identify product. Shippers are required to use the correct HS Code corresponding to the product they are shipping so Customs at origin and destination can appropriately identify the goods being moved. A failure to list the correct HS Code related to your product can result in shipment rejection or major penalties. And with the changes going into effect in the new year, things could get dicey for shippers who fail to pay attention.
New UK Customs System
If all the above does not already sound like enough of a hassle, the UK is also migrating to an entirely different customs system. Their previous one, CHIEF, is being replaced by a new customs system – CDS. All import declarations will need to be switched over to the new system by September of 2022, and all export declarations switched by March of 2023.
While this may not seem like a major change, the learning curve for the new system is quite steep and will take businesses a good deal of time to adjust to the change. The DDC has created resources to help shippers with the changes in customs regulations and shipping practices between the U.K. and EU, but there is no doubt that all these changes will take shippers time to adjust to.