22.This instrument strengthens the enforcement powers of HM Revenue and Customs (HMRC) by giving effect to a legal requirement for goods imported into Great Britain (GB) to go for a check at an Inland Border Facility (IBF) if selected for inspection. HMRC explains that from 1 January 2022, when full customs controls will apply to goods moving from the EU to GB, ‘risk profiles’ will be applied to customs declarations. As a result, a small proportion of imports will be checked for fiscal or security risks, product safety or other matters. These physical checks will take place at IBFs where ports and other border locations have limited space and infrastructure to hold goods on arrival and to conduct the checks, especially in Dover, the Eurotunnel terminal at Cheriton and Holyhead. The checks will mainly apply to goods imported in Heavy Goods Vehicles that arrive in GB by ferry or Channel Tunnel train.
23.We asked HMRC how it will ensure in practice that imported goods that have been selected for inspection and are on their way to an IBF are not tampered with on the way there. HMRC told us that amongst other measures, it will work alongside Border Force and use “risk-based and targeted checks to detect, prevent and respond to fraud and other deliberate non-compliant activity; including tampering”, and that HMRC will be “monitoring the risk of tampering though intelligence-led activity and where appropriate seek to respond to any identified evidence on the presentation of goods at the IBF through compliance interventions”. HMRC also highlighted the importance of “traders and those involved in the transporting of goods [conducting] appropriate due diligence on their supply chain to ensure they are aware of their responsibilities”. HMRC added that in the longer-term it is “exploring technological solutions and other compliance measures which will enable [it] to better monitor and secure movements between the port and inland facilities, including mitigating instances of tampering”.
24.We note the additional information provided by HMRC which we are publishing in full at Appendix 1. We remain concerned, however, about the risk of fraud and goods being tampered with on the way from ports to the new IBFs.
25.These Regulations implement changes in the International Convention for the Safety of Life at Sea, 1974 (“SOLAS”) dating back to 1 July 2002. The changes relate to radiocommunications for ships on international voyages, including requirements to provide an update of the ship’s position at four hourly intervals, and for the testing of satellite emergency position beacons, rescue transmitters and other elements of the Global Maritime Distress and Safety System. To avoid further delays in implementation the Regulations also set up an “ambulatory reference” to Chapter IV of SOLAS to give all future amendments of this type automatic effect in the UK. We are pleased to see that the Department for Transport has made a good start on reducing its backlog of maritime legislation.
26.This instrument revokes the requirement for general licences for imports of rice and ethanol of agricultural origin and export licences for rice, as set out in retained EU law. Under the current system, a licence is required for imports of various rice types over 1000 kg and ethanol of agricultural origin over 100 hl, and exports of various rice types over 500 kg. According to the Department for Environment, Food and Rural Affairs (Defra), the licenses were introduced under the EU’s market monitoring policy to track imports into the single market and to set rice tariffs. Defra says that after EU Exit, the licences no longer serve a policy function and burden importers with unnecessary administrative and financial costs: traders have to lodge a financial security for every licence they apply for and, once they have used the licence, they have to apply for the release of the security. As the Explanatory Memorandum states that this can be a significant sum for those trading in large volumes without providing any financial information, we asked Defra for an estimate of the impact of the current licence requirements on business. The Department responded that:
27.“Imports from the EU into the UK are required to be covered by a licence post EU Exit. This has resulted in the Rural Payments Agency (RPA) issuing significantly more licences, many to traders who are having to apply for licences for the first time. In 2019/20 the RPA issued an average of 3,124 general licences, whereas, up to June 2021 they have already issued 3,154 due to the volume of newly impacted trade from the EU. Across all rice and ethyl alcohol licences issued in 2021, over £17 million was lodged in securities by over 500 traders.”
28.Separate arrangements apply in Northern Ireland (NI): while the EU has removed the export licence requirement for rice, the import licence requirement remains in place. Defra says that this is “unlikely to have a significant impact” on NI importers because imports into NI from the EU will not require a licence and very few licences have been issued for third country imports. We asked whether imports of rice and ethanol from Great Britain (GB) into NI require a licence under these arrangements. The Department explained that:
29.“Rice which is sent to NI from GB is likely to be milled rice for retail sale as we are not aware of any rice mills in NI. As a result, we expect consignments to be below the volume threshold and so would not require a licence. Equally, given that the majority of ethyl alcohol imports are from the EU, we do not expect many consignments to be impacted. If a shipment of either product above the threshold were moved, it may require a licence. However, the Government is in intensive discussions with the EU with the aim of delivering significant changes to the NI Protocol. As discussions progress, this may impact how the Northern Ireland Protocol is applied in relation to this matter.”
15 See the discussion and list in our 17th Report: Secondary Legislation Scrutiny Committee, (Session 2021–22 HL Paper 88).
16 Commission Delegated Regulation (EU) () and Commission Implementing Regulation (EU) ().