Sixteenth Report Contents

Proposed Negative Statutory Instruments under the European Union (Withdrawal) Act 2018

Instruments recommended for upgrade to the affirmative procedure

Cash Controls (Amendment) (EU Exit) Regulations 2019

Laid: 31 January 2019

Sifting period ends: 18 February 2019

1.An EU Regulation1 requires all individuals who bring cash into or out of the EU to declare these amounts to the customs authorities in the Member State they first enter or leave. In the event of ‘no deal’ with the EU, this proposed negative instrument ensures that the UK can collect information from individuals who are carrying cash in excess of £10,000 into or out of the UK. This will enable the UK to build its own risk profiles, which will be used to identify and intercept cash which is being carried by individuals. However, these Regulations will not have any effect in relation to individuals carrying cash between Northern Ireland and the Republic of Ireland and do not allow for any new checks or controls at the border. Although HM Revenue and Customs has said that “further details on the arrangements for trade between Northern Ireland and Ireland will be published as soon as possible”, the House may wish to discuss what will happen to cash controls between the North and South of Ireland after exit day. As such, the Committee recommends that this instrument be upgraded to the affirmative resolution procedure.

Customs (Economic Operators Registration and Identification) (Amendment) (EU Exit) Regulations 2019

Date laid: 31 January 2019

Sifting period ends: 18 February 2019

2.Within the EU, persons involved in activities covered by EU customs legislation are required to register with the relevant customs authorities. Registration is required both for persons established in the EU, who must register with the customs authorities in the Member State in which they are established, and also for persons not established in the EU, where they first make a declaration or apply for a decision in the EU. Once registered, a person is given an Economic Operator Registration Identification (EORI) number, which is used to make a customs declaration as well as when applying for customs simplifications, approvals and decisions. An EORI record is also created. These Regulations, laid by HM Revenue and Customs (HMRC) as a proposed negative instrument, provide for an independent EORI system, meaning that businesses which currently trade only between the EU and the UK, or overseas business that will in future import in to the UK, will need to apply to HMRC for an EORI number. The Regulations would not have effect in relation to economic operators whose only customs activities consist of trading goods between Northern Ireland and the Republic of Ireland. Although HMRC explains that “further details on the arrangements for trade between Northern Ireland and Ireland will be published as soon as possible”, in the absence of such information the House may wish to debate the implications which these Regulations may have for trade across the border. As such, the Committee recommends that this proposed negative instrument be upgraded to the affirmative resolution procedure.

Customs Safety and Security Procedures (EU Exit) Regulations 2019

Date laid: 31 January 2019

Sifting period ends: 18 February 2019

3.The EU has in place a safety and security policy across the European security zone which protects the EU against potential threats such as terrorism and trade in illicit goods such as guns and drugs. It is governed by Union Customs Code legislation. In a ‘no deal’ scenario, the UK will be regarded as a non-EU nation, and UK exporters to the EU and other nations will have to complete safety and security declarations. Goods imported to the UK from the EU and other nations will also carry a safety and security declaration to enable border agencies to monitor goods coming into the UK. Traders who wish to receive UK Authorised Economic Operator (AEO) status,2 which will be valid only in the UK customs area, will have to complete an application process (even if they currently have such status in relation to the EU customs area). Once considered reliable and compliant in their customs operations, and once they meet certain criteria, they will be issued with an AEO authorisation by HM Revenue and Customs (HMRC). HMRC can impose a penalty for failure to notify any changes that affect AEO status.

4.HMRC explains in the Explanatory Memorandum that “[t]his instrument will introduce an additional administrative and financial burden for businesses that currently trade with the EU. Businesses will need to adapt their process and systems to meet the requirement to make safety and security declarations prior to arrival of goods in the UK.” HMRC also states that “[t]he impact on the public sector is high. Additional administrative responsibilities will affect UK border agencies. The government recognises further resource requirements to cope with additional customs arrangements and on 18 August 2018 announced an extra 300 border staff in preparation for ‘No Deal’ and an additional 1,000 staff in the future.” HMRC acknowledges that the key message from the haulier industry and ferry operators at Roll on-Roll off ports is that safety and security requirements will be difficult to meet. It states that the Government will continue to engage with the industry on the application of their safety and security obligations. “This includes looking at how information requirements can be made less onerous while continuing to provide our border agencies with a sufficient, accurate risk assessment. These changes are not covered by this instrument and further details on these arrangements will be published in due course.”

5.This instrument does not apply to trade in goods between the Republic of Ireland and Northern Ireland and further details on this are to be given in due course. Given the potential impact on trade, the House may wish to have the opportunity to debate this instrument. As such, the Committee recommends that it be upgraded to the affirmative resolution procedure.

Proposed Negative Statutory Instruments about which no recommendation to upgrade is made


1 Regulation (EC) No 1889/2005 of the European Parliament and of the Council of 26 October 2005 on controls of cash entering or leaving the Community, 25 November 2005, OJ L309/9.

2 AEO status is an internationally recognised quality mark that shows the role in the international supply chain is secure customs controls and procedures are efficient and meet EU standards. See HMRC, ‘Authorised Economic Operator for imports and exports’ (21 November 2018): https://www.gov.uk/guidance/authorised-economic-operator-certification [accessed 11 February 2019].




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