On 20th September, the House of Lords EU External Affairs Sub-Committee has published a report on the Government’s Chequers proposal for a Facilitated Customs Arrangement (FCA) and the customs challenges under ‘no deal’. The report finds that under the FCA, UK importers would face an administration cost of £700 million per year – a fraction of the annual £18 billion ‘no deal’ cost to UK traders. However, the FCA raises a number of significant questions that need to be resolved for it to be workable and acceptable to the EU. Its findings include that in the event of ‘no deal’, customs checks of EU goods could be unilaterally suspended to keep goods moving, may be in breach of WTO rules; the Government has not yet made clear how goods under the FCA could be reliably tracked and who would carry liability for keeping EU and UK-destined goods separate; and part of the implementation of the FCA relies on the establishment of new trusted trader schemes and maximising the take-up. The Committee recommends simplifying the application process to facilitate access for small and medium-sized enterprises and newly established businesses.
