One year on—Trade in goods between Great Britain and the European Union Contents

Chapter 5: Preparedness for January and July 2022


190.This chapter sets out the evidence we received on preparedness for the introduction of import controls from January and July 2022, including how the Government might use the additional time afforded to it by the decision to delay the introduction of these controls. Some areas are specific to either the January deadline or the July deadline, whereas others are of relevance to both; we have structured our analysis accordingly.

191.The NAO has called on the Government to use the additional time to “address current risks, particularly relating to infrastructure and trader and haulier readiness”, and to “provide the focused and detailed support and guidance that ports, hauliers, traders and passengers need to allow them to adapt to the new rules when these are introduced.”226

192.We heard some concerns over additional spikes of temporary disruption as new controls are phased in. Sarah Laouadi of Logistics UK warned that “it is likely that we will see another decline in compliance and an increase in the potential mistakes, issues and disruptions that could result”.227 Richard Ballantyne of the British Ports Association said that the introduction of import controls “is where we could see the most physical disruption and intervention at our ports.”228

193.Luke Hindlaugh of the Food and Drink Federation also predicted that the same inconsistencies of implementation seen between EU Member States would happen “between port health authorities” in Great Britain when SPS checks are introduced and said that the Government should stand ready to “stamp that out and make sure there is a consistent application where possible”.229

194.However, the extent of any disruption will depend on a number of factors. Logistics UK cited “the level of readiness of UK and EU businesses, [and] … official vet capacity in EU countries for movements of agri-food goods from the EU to the UK”, as well as “the enforcement approach UK authorities will adopt towards the inevitable errors that will initially occur in the immediate aftermath of the two deadlines.”230 Both the National Farmers’ Union and the Food and Drink Federation called on the Government to extensively test procedures with traders ahead of the deadlines to minimise disruption.231

195.The Institute for Government noted that the new timetable created “a greater separation between the introduction of full customs controls and full agri-food controls”. According to business groups they had spoken to, this separation could reduce “the risk of possible ‘spill over’ effects in January, whereby firms not subject to agri-food controls could have been caught up in possible disruption at the border caused by unprepared agri-food traders.”232

196.There may be some temporary disruption when new import controls are introduced from January and July 2022, as traders adjust to a further set of new requirements. However, the extent of this disruption will depend on Government and business readiness, and on the Government’s approach to enforcing compliance after the deadlines pass. The Government should extensively test and trial procedures with traders ahead of the deadlines to help keep any disruption to a minimum.

January 2022: customs and rules of origin


197.From 1 January 2022, the current easement allowing for deferred customs declarations will end, and importers of goods from the EU will need to submit full customs declarations at the point of import.

198.The Government’s Border Operating Model warns that “Customs declarations are complex” and recommends that traders seek the assistance of a customs intermediary. Completing a customs declaration requires a GB Economic Operators Registration and Identification (EORI) number, the Commodity Code of the goods, the value of the goods, the origin of the goods, and access to HMRC systems.233 Elly Darkin of Global Counsel said that the Government’s recommendation that firms hire an intermediary was “a valid one” but added that “there is a cost to that” which smaller companies might struggle to meet.234

199.Luke Hindlaugh described the move to full customs declarations as “quite a big one”, which will “probably be a shock” to traders.235 However, Joe Marshall of the Institute for Government pointed out that as some traders did not use the option of deferred declarations this year, “not all firms are facing a cliff edge.”236

Compliance and enforcement

200.Several witnesses raised concerns about the potential for compliance problems once full customs declarations are required.237 We heard that smaller firms are at particular risk, as large-scale businesses are more capable of outsourcing compliance functions to customs intermediaries or consultants.238

201.Dr Anna Jerzewska of Trade and Borders also warned that poor customs compliance, such as filling in declarations incorrectly, could be a long-term risk for traders: “my biggest worry is not getting the goods into the country. It is finding out three years from now that you have been doing something wrong and that all the customs duties that you have not paid over the last three years are now due.”239

202.Sam Lowe of the Centre for European Reform stressed, however, that “what happens as a result of non-compliance is up to the British Government. The enforcement environment on day one does not have to be very strict.”240 James Sibley of the Federation of Small Businesses said that, in the initial period at least, the Government should be “helping small companies in particular towards compliance … before coming down with the hammer immediately.”241

203.A so-called ‘light-touch’ approach to customs enforcement, however, would not be cost-free. Dr Anna Jerzewska told us that while “a light-touch approach will have to be [the] answer”, this also posed a dilemma for HMRC: “how do you promote compliance without a stick–without enforcement?”242 Sarah Laouadi agreed: “a rule that is not enforced can penalise compliant businesses”.243 Joe Marshall raised questions about how a light-touch approach would be communicated, as “some firms are a little bit nervous about relying on informal messaging”.244

204.HMRC’s Sophie Dean told us that as “the majority of non-compliance … is not going to be deliberate”, the Government would be taking “a supportive approach” to enforcement, “focusing on education, certainly in the early days”. She did not offer a timescale for how long this supportive approach might last, although she did add that the Government was “not going to be overly heavy-handed” in terms of enforcing compliance retrospectively.245

205.Business compliance with the new requirement for full customs declarations from 1 January 2022 is a source of concern and could have long as well as short-term consequences. Much will depend, however, on the approach that the Government takes to enforcement.

206.We are encouraged to learn that HMRC intends to take a supportive approach that seeks to help and educate non-compliant traders, rather than punish them. However, we call on the Government to clarify how this approach has been communicated to traders, how long it will last, and how they intend to balance a ‘light-touch’ approach to enforcement with the need to incentivise compliance in the medium-term.

207.Given that the Government’s response to this report will not be due until after the deadline for full customs declarations is due to expire, we ask that an assessment of how businesses are adjusting to the new requirements is included in the response.

Rules of origin

208.Alongside the TCA, the UK and EU negotiated a one-year grace period which temporarily waived the requirement for traders to submit a suppliers’ declaration when seeking to claim zero-tariff treatment on the basis of a statement on the product’s origin.246 As a negotiated easement, this grace period applies to traders in both directions (unlike the phasing in of customs and SPS controls, which only apply to imports into GB from the EU).

209.From 1 January 2022, traders will need to submit suppliers’ declarations when claiming tariff-free treatment. This proof may also be required retrospectively for goods traded during the grace period, meaning that firms will need to have maintained accurate records.247

210.Several witnesses raised concerns over trader compliance when the grace period expires. Sam Lowe said the grace period essentially meant “firms are not being asked to provide evidence” that their products qualified for zero tariffs, adding, “my suspicion … is that lots of firms, especially smaller firms, are currently trading tariff free when they should not be”.248 Dr Anna Jerzewska described the grace period was “one of the most misunderstood simplifications out there”.249 William Bain of the British Chambers of Commerce said that the expiry of this grace period was “the big concern for January”, and called for an “extensive comms campaign over the autumn” to improve trader awareness.250

211.Sam Lowe stressed that, as with customs, much would depend on the approach the Government takes to non-compliance after 1 January: “You can either choose to punish these firms or choose to help them comply.”251

212.We have significant concerns about the imminent expiry of the grace period for suppliers’ declarations on rules of origin. Firms that have misunderstood the grace period, or are unaware of its expiry, risk facing tariffs from 1 January 2022. We urge the Government to do all it can to communicate this deadline to businesses, especially SMEs. As with customs controls, the Government should take a pragmatic and supportive approach to enforcing compliance.

213.We note that this grace period will already have expired by the time the Government’s response to this report is due. In its response to this report, the Government should set out the approach it is taking to monitoring and enforcing compliance, as well as its assessment of how businesses are adjusting to the requirement for suppliers’ declarations.

July 2022: SPS checks and controls

214.Following the Government’s decision to further delay the introduction of certain SPS controls, the main deadline in this area is now 1 July 2022 (although there are a few exceptions where controls will be introduced earlier or later, as set out in paragraph 134).

215.The July deadline for SPS affects fewer traders than the January deadline for customs (as all goods will be subject to the requirement for full customs controls, whereas only some goods, primarily agri-food, are subject to SPS processes). However, the Institute for Government told us that for those affected by both sets of changes, “the introduction of agri-food controls is likely to be more challenging, given these involve more complex paperwork, [and] may require physical inspections and goods to proceed through a designated Border Control Post.”252

216.Despite the delay, concerns remain over the levels of readiness for the July 2022 deadline, particularly regarding Border Control Posts (BCPs), where physical checks on products subject to SPS requirements will take place. The Horticultural Trades Association was “concerned that not all BCPs will be operational”, especially to handle goods that are perishable or need to be temperature controlled.253 Indeed, the Government’s updated Border Operating Model also hints that not all BCPs will be operational on time, stating that physical checks on live animals will only take place at BCPs “where a facility is operational at the point of entry”.254 Where there is no designated BCP, checks will remain at the point of destination until sufficient BCPs are operational. Logistics UK, meanwhile, called for further detail on the operating models that would be used at different BCPs (not all BCPs are designated to check every type of product, and government guidance instructs traders to “make sure the BCP you are using is designated to check your shipment’s commodity”).255

217.We also heard concerns from the agri-food sector that there was a lack of clarity over the fees that would be charged by ports for inspections at BCPs.256 The National Farmers’ Union called on the Government to “ensure commercial operators do not abuse their power to set fees for a service which is a regulatory requirement.”257

218.Finally, we heard support for “pragmatic” application of the new SPS controls, both from July and in the medium-term. William Bain, for example, cited “the proportion of consignments that have to be opened up” at BCPs as one area where such an approach would be welcome.258 These matters are discussed in further detail in Chapter 6.

219.The delay to the introduction of SPS controls provides the Government with extra time to ensure that the introduction of the new requirements on 1 July 2022 goes as smoothly as possible. We retain an interest in these matters and will monitor the implementation of the new controls closely.

220.In particular, the Government should ensure that sufficient Border Control Posts (BCPs) are operational in time, and that contingencies are in place if not. Clarity should also be provided on how each BCP will operate and the fees that will be charged for BCP inspections. We request that the Government provides an update on its progress in operationalising BCPs when it responds to this report.

221.The Government should also prepare to ensure that each port applies the controls consistently, and to introduce procedures to resolve difficulties as soon as they arise.

Cross-cutting issues

Government guidance and communications

222.As discussed in Chapter 3, the Government has produced a considerable amount of guidance to date to help businesses navigate the end of the transition period. It has also produced guidance to help businesses prepare for and adjust to the new import controls.

223.One of the most comprehensive pieces of government guidance for the new controls is the 314-page Border Operating Model, which sets out the UK Government’s approach to importing and exporting goods across the GB-EU border and the varying requirements for different traders at each stage of the process.259

224.The Border Operating Model has been updated several times to reflect delays to the timetable for import controls. Although the most recent delay was announced on 14 September, the Government did not publish an updated Border Operating Model reflecting these changes until 18 November, more than two months later.260

225.Giving evidence to us shortly before the updated Border Operating Model was published, Cabinet Office official Emma Churchill played down the importance of this delay in publication: “the key change, of course, is the dates … The details of what is going to happen and how it is going to happen are all … in the [existing] operating model.” Sophie Dean of HMRC pointed out that, as only some of the timetable had been changed, not all of the guidance was out of date: “What is in the Border Operating Model for January for customs is there now”.261

226.However, if the update was indeed primarily to the dates, it is not immediately clear why this took over two months. In written evidence prior to the publication of the update, Logistics UK was critical of this delay, pointing out that “updating and maintaining all sources of information is crucial to avoid confusion.”262

227.The Government should use the additional time ahead of the introduction of import controls to further update, consolidate and publicise its guidance to traders, in response to stakeholder feedback. It is vital that guidance is accessible and user-friendly, with the level of detail differentiated according to target audience.

228.We welcome the publication in November 2021 of the updated Border Operating Model. It would have been preferable if this had been done much more rapidly following the announcement of the new timetable in September 2021, rather than more than two months later, to avoid any confusion in the interim. We do not expect this delayed publication to cause any major difficulties, as most of the latest updates are in relation to the July 2022 deadlines. Nevertheless, a prompter approach to updating guidance would be good practice for the Government in future.

229.We were also told of the importance of government communications with traders. James Sibley called for a “focus[ed] campaign for getting importers ready” for the new controls, while Luke Hindlaugh added that communicating potential problems would help as “a lot of problems that will happen with traders once the checks start will be common ones.263

230.Emma Churchill told us on 9 November that the Government would shortly be relaunching the “Check, Change, Go” communications campaign that ran, ahead of the end of the transition period, in the autumn of 2020, focusing this time on the introduction of import controls.

231.Government communications are an important tool in ensuring businesses are ready for the new controls. It was therefore welcome to learn that the Government is relaunching its “Check, Change, Go” campaign ahead of the new import requirements.

Infrastructure, IT systems and staffing

232.As well as providing guidance and communications to assist business readiness, there are also steps the Government needs to take to ensure its own preparations are in order. Elly Darkin told us that, as an “urgent priority”, the Government should focus on these matters, which she identified as “digital infrastructure, physical infrastructure at ports and BCPs [Border Control Posts], and human resourcing with regard to staff recruitment and training.”264 In his letter to the Committee dated 25 November 2021, the Paymaster General, Michael Ellis MP, told us that the Government has allocated a total of £705m to fund infrastructure, jobs and technology at the GB-EU border, of which £470m was on infrastructure and £235m on staffing and IT systems.265

233.Some physical infrastructure was in place in time for the end of the transition period, but further infrastructure will be needed for the introduction of the remaining controls. Facilities for customs compliance checks will be needed from January 2022, while BCPs for physical SPS checks will need to be operational by July 2022.

234.Responsibility for this infrastructure varies. Richard Ballantyne explained that “typically border infrastructure is provided by the port operator”, although in this case, “given the short notice and the extreme circumstances”, the Government provided some financial support to ports in the form of the £200m Port Infrastructure Fund.266

235.Separately, the Government is responsible for the construction and operation of inland infrastructure sites, to support ports which do not have space for additional facilities. The Government has allocated a further £270m in funding for these inland sites.267 Emma Churchill told us that several sites, including Sevington in Kent, “were fully operational from 1 January and remain operational”, but will carry out additional functions from January and July 2022.268

236.The NAO’s November 2021 report warned that “there is still uncertainty regarding elements of the Government’s infrastructure programme,” and our inquiry heard similar concerns. As outlined in Chapter 4, several witnesses cited insufficient infrastructure readiness as a factor behind the decision to delay import controls. Richard Ballantyne said that while most of the infrastructure is “either ready or about to be ready”, there was still “quite a lot to do”, and that preparations felt “a bit last minute”. He added that port operators had found dealing with the Government on infrastructure “more frustrating” than on other matters.269

237.Although government officials were “very confident” about their preparations for new infrastructure,270 it is already clear that temporary arrangements will be needed in some areas. For example, with respect to inland infrastructure sites for Welsh ports (which are the responsibility of the Welsh Government), Emma Churchill told us that “It is likely that the permanent sites will not be in place until a bit later in 2022 or even 2023. There will need to be some interim arrangements, temporary facilities, from 1 July in respect of those [traders] coming through Welsh ports.”271

238.In terms of Government preparations for the new border requirements, physical infrastructure is by far the area of greatest concern, despite £470m in allocated funding. The Government must use the extra time to ensure that these preparations are on track or, where they are not, that sufficient mitigations are in place. The Government should provide this Committee with an update on its infrastructure preparations when it responds to this report, including information on how much of the £470m in allocated funding for infrastructure has been spent to date.

239.We also call on the Government to provide further clarity on the interim inland arrangements that will be in place to support Welsh ports next year, informed by engagement with the Welsh Government as necessary.

240.New border processes also rest on the operation of government IT systems, such as the Customs Handling Import and Export Freight (CHIEF) system for submitting electronic customs declarations,272 and the Goods Vehicle Management System (GVMS) for moving goods through customs. GVMS has been operational since the end of the transition period for goods moved under transit but, from 1 January 2022, will be needed to get any goods through customs at ports using the service.273 The Government confirmed to us that total HMRC spending on border IT systems during 2020–2021 was £294m.274

241.As the National Audit Office has pointed out, most of the changes to border-related systems were introduced ahead of 1 January 2021.275 Sophie Dean explained that the systems needed for January are “already live and running” but that, ahead of the deadline, the Government would be scaling up, testing, and improving existing systems.276

242.Unlike physical infrastructure, IT systems did not appear to be an area of major concern ahead of the January and July 2022 deadlines for most of our witnesses. However, trade associations in the agri-food sector were worried specifically about the transition to a new system for pre-notifying imported plants and plant products. The old system was described by the Horticultural Trades Association as “aging” and “outdated”, yet the transition to the new system “has already been delayed three times”.277

243.In terms of government IT systems, most of the major changes have already been introduced. However, implementing and expanding IT systems carries an inherent level of risk, and we will continue to monitor the Government’s progress in this area.

244.Introducing new import controls also requires the recruitment and training of new staff, particularly HMRC officials, Border Force, and veterinarians and port health staff for SPS checks.

245.We did not hear major concerns from our witnesses about levels of staffing for customs checks, and the Government expressed confidence that recruitment in this area was on track. Emma Churchill told us, “Border Force needed 1,500 for the end of the transition period. They were all in place. Border Force is on track to increase that to 2,000, which is what it needs for 1 January.” Speaking for HMRC, Sophie Dean added, “We have sufficient staff for January … [and] we have trained several hundred more staff should they be needed.” The Paymaster General also cited £14m in funding from DEFRA to local authorities to support port health authorities in recruiting and training “hundreds more staff.”278

246.However, some witnesses did raise concerns about the additional port health and veterinary staff needed for SPS controls. The City of London Corporation, in its capacity as the London Port Health Authority,279 raised concerns about “short timescales to recruit and train new port health staff” in the context of potential “overwhelming demand on and beyond 1 July 2022”. The Corporation called for additional support from the Government in this area, and for a temporary relaxation to non-EU import controls to ease the pressure on staff capacity.280

247.Government recruitment of additional staff appears to be on track with respect to customs, but we heard some concerns over staffing levels with respect to the veterinarians needed for SPS controls. We invite the Government to explain the steps it is taking in this area in further detail when it responds to this report.

EU trader readiness

248.As well as GB importers, the success of the upcoming stages of the timetable for import controls relies on the readiness of exporters in the EU—for instance, EU exporters of agri-food products will, from July 2022, need to arrange for export health certificates to be issued before their goods arrive in Great Britain.281

249.The NAO’s November report raised concerns about EU trader readiness, warning, “It will be a significant challenge for the UK Government and EU Member States to make sure businesses across 27 countries understand what they need to do and when.”282

250.Our inquiry heard similar concerns—indeed, William Bain described trader unreadiness in the EU as “the greatest problem” ahead of the forthcoming deadlines.283 Logistics UK raised concerns that delays to import controls could exacerbate this lack of readiness, as, unlike UK exporters, “EU exporters have not felt the full impact of the end of the transition period yet.”284

251.The National Farmers’ Union were pessimistic that these issues could be solved, arguing that “the UK Government has very little influence over EU trader readiness.”285 However, the Government has already been engaging with EU traders on readiness matters, setting up teams of civil servants to “disseminate information and collect feedback from EU stakeholders” and holding “industry day” events with businesses from specific Member States.286

252.Elly Darkin recommended that the Government take further steps to encourage EU trader readiness, particularly by engaging with specific EU Member State authorities and businesses. She stressed that, “If a German exporter to the UK is looking to obtain an export health certificate, they do not go to a website managed by the European Commission; they go to one managed by the German health authorities.”287

253.Readiness and awareness among EU exporters will be crucial to ensuring the implementation of import controls goes smoothly, and this is currently a major area of concern. While this is not directly within the Government’s control, it must take all possible steps to engage with EU traders and the relevant Member State authorities in a targeted manner ahead of the forthcoming deadlines. Some work is already being done in this area, which we welcome.

226 National Audit Office, The UK border: Post UK-EU transition period (5 November 2021): [accessed 30 November 2021]

227 Q 35 (Sarah Laouadi); see also written evidence from the Agricultural Industries Confederation (TIG0002).

228 Q 33 (Richard Ballantyne)

229 Q 30 (Luke Hindlaugh)

230 Written evidence from Logistics UK (TIG0010)

231 Written evidence from the National Farmers Union (TIG0015) and 25 (Luke Hindlaugh).

232 Written evidence from the Institute for Government (TIG0014)

233 HM Government, The Border with the European Union: Importing and Exporting Goods (July 2021), p. 125: [accessed 30 November 2021]

234 Q 10 (Elly Darkin)

235 Q 27 (Luke Hindlaugh)

236 Q 10 (Joe Marshall)

237 Q 46 (Dr Anna Jerzewska)

238 Q 10 (Elly Darkin, Joe Marshall)

239 Q 47 (Dr Anna Jerzewska)

240 Q 10 (Sam Lowe)

241 Q 28 (James Sibley)

242 Q 46 (Dr Anna Jerzewska)

243 Q 43 (Sarah Laouadi)

244 Q 10 (Joe Marshall)

245 Q 66 (Sophie Dean)

246 European Commission, ‘Supplier’s declaration’: [accessed 30 November 2021]

247 European Union Committee, Beyond Brexit: trade in goods (24th Report, Session 2019–21, HL Paper 249), para 53

248 Q 1 (Sam Lowe)

249 Q 46 (Dr Anna Jerzewska)

250 Q 25 (William Bain)

251 Q 1 (Sam Lowe)

252 Written evidence from the Institute for Government (TIG0014)

253 Written evidence from the Horticultural Trades Association (TIG0009)

254 HM Government, The Border with the European union: Importing and Exporting Goods (November 2021), p. 9: [accessed 30 November 2021]

255 Written evidence from Logistics UK (TIG0010)

256 Written evidence from the Horticultural Trades Association (TIG0009)

257 Written evidence from the National Farmers’ Union (TIG0015)

258 Q 32 (William Bain)

259 HM Government, The Border with the European union: Importing and Exporting Goods (November 2021): [accessed 30 November 2021]

260 Ibid.

261 Q 63 (Emma Churchill, Sophie Dean)

262 Written evidence from Logistics UK (TIG0010)

263 Q 25 (James Sibley, Luke Hindlaugh)

264 Q 9 (Elly Darkin)

265 Letter dated 25 November 2021 from Rt Hon Michael Ellis QC MP, Paymaster General, Cabinet Office to Lord Kinnoull, Chair, European Affairs Committee:

266 Q 38 (Richard Ballantyne)

267 National Audit Office, The UK border: Post UK-EU transition period (5 November 2021), p 4: [accessed 30 November 2021]

268 Q 62 (Emma Churchill)

269 Q 38 (Richard Ballantyne)

270 Q 62 (Emma Churchill)

271 Ibid.

272 The CHIEF system has existed for around 25 years (previously for non-EU trade only) and is due to be replaced over 2022/23 by a new system, the Customs Declaration Service (CDS). National Audit Office, The UK border: Post UK-EU transition period (5 November 2021), p 78: [accessed 30 November 2021]

273 HM Revenue and Customs, ‘Register for the goods vehicle movement service’, (28 October 2021): [accessed 1 December 2021]

274 Letter dated 25 November 2021 from Rt Hon Michael Ellis QC MP, Paymaster General, Cabinet Office to Lord Kinnoull, Chair, European Affairs Committee:

275 National Audit Office, The UK border: Post UK-EU transition period (5 November 2021): [accessed 1 December 2021]

276 Q 63 (Sophie Dean)

277 Written evidence from the Horticultural Trades Association (TIG0009) and from the National Farmers Union (TIG0015). Currently, pre-notification of plant imports is done via the PEACH system (Procedure for Electronic Application for Certificates from the Horticultural Marketing Inspectorate). The new system will build on IPAFFS (Import of Products, Animals, Food and Feed System), which is currently used for other agri-food products (such as products of animal origin).

278 Q 86 (Michael Ellis MP)

279 The remit of the London Port Health Authority includes the ports of London Gateway, Tilbury, Purfleet, Thamesport and Sheerness, as well as London City Airport.

280 Written evidence from the Office of the City Remembrancer, City of London Corporation (TIG0006); see also Q 5 (Joe Marshall and Sam Lowe).

281 Written evidence from Logistics UK (TIG0010) (Logistics UK)

282 National Audit Office, The UK border: Post UK-EU transition period (5 November 2021): [accessed 1 December 2021]

284 Written evidence from Logistics UK (TIG0010) and from the National Farmers Union (TIG0015)

285 Written evidence from the National Farmers Union (TIG0015)

286 Q 63 (Emma Churchill); see also written evidence from Logistics UK (TIG0010)

287 Q 9 (Elly Darkin)

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