It’s fair to say that Brexit has been a prolonged procedure, generating significant jargon to describe engaged concepts and mechanisms that will be critical components for trading with the EU after the 1st January 2021.
We review some of the most important Brexit abbreviations for traders and explain in simple and neutral terms what they mean.
Because trade negotiations are still ongoing (and are likely to continue until the end of the transition period in December 2020), we will periodically update this glossary, on our dedicated Brexit site, with new Brexit jargon that comes into use.
Authorised Economic Operator (AEO)
- An internationally-recognised mark of quality that gives firms ‘trusted trader’ status.
- AEO-C Customs Simplifications focuses on establishing internal quality management controls for customs compliance.
- AEO-S Safety & Security focuses on supply chain security measures.
- The EU and UK are expected to recognise each other’s AEO schemes in the post-Brexit trading environment
- After Brexit, AEO certification will become even more desirable as an internationally-recognised tool to keep cargo moving.
Customs Comprehensive Guarantee (CCG)
- Use a customs comprehensive guarantee to set up a deferment account to cover Customs Duty and import VAT when you regularly import goods.
- Customs comprehensive guarantee (CCG) to cover multiple customs debts.
- A guarantor is required to cover the customs comprehensive guarantee amount.
Customs Freight Simplified Procedures (CFSP)
- An electronic customs system for imported third country goods.
- It allows faster release of goods at the frontier or inland, the use of simpler customs declarations and cashflow benefits.
- In order to qualify for use, the business or the agent must have access to the electronic recording system, have a unique trading reference number, have a good record of compliance and be able to use its duty deferment facility.
- From 1st January 2021 all traders (of non-controlled goods) will be able to declare imports using CFSP process for six months, but will need authorisation to continue use from 1st July 2021
Entry In Declarants Records (EIDR)
- From 1 January 2021 qualifying businesses will be able to make a simplified declaration (under CFSP) when their goods arrive at a UK or EU port or airport.
- They can declare goods by entering them in their own records and sending other details to customs.
- EIDR records must contain up to 13 pieces of information*.
- From 1st January to 30th June 2021 traders have a rolling six month deadline to submit supplementary declarations to CHIEF.
- From 1st July 2021 you must submit your supplementary declaration no later than fourth working day following the month in which the goods were entered in your records.
Economic Operators Registration and Identification number (EORI)
- EORI number allows Customs to recognise the trader and is required to carry out custom activities in the European Union.
- From 1 January 2021 you’ll need an EORI number to move goods between the UK and the EU.
- You’ll need an EU EORI number if your business will be making customs declarations or getting a customs decision in the EU.
- VAT registered UK businesses should have received an EORI directly.
Goods Vehicles Movement Service (GVMS)
The government’s new IT platform called the Goods Vehicle Movement Service, placing two possible models before port operators:
- A temporary storage model where goods are stored at frontiers for up to 90 days before being declared to customs.
- A pre-lodgement model, where goods arriving at ports will have already made a customs declaration. Under this model, trucks that arrive without clearance would be prevented from reaching ports. The GVMS supports this model for both imports and exports and to facilitate Transit movements.
The government asserts that the GVMS will, by July 2021, allow the UK to:
- Enable declaration references to be linked together so that the person moving the goods only has to present a goods movement reference at the frontier to prove that their goods have pre-lodged all the necessary declarations.
- Allow the linking of the movement of the goods to declarations, enabling the automatic arrival / departure of goods in HMRC systems so that goods boarding on the EU side can be processed en-route.
- Automate the Office of Transit function, marking the entry of goods into the UK customs territory.
- Allow notification of the risking outcome of declarations in HMRC systems to be sent to the person in control of the goods by the time they physically arrive in the UK, so that they know where they need to proceed.
New Computerised Transit System (NCTS)
- The NCTS allows you to submit and finalise your transit declarations by electronic means.
- The UK plans to implement changes to the NCTS in three phases to reflect the change in country status and to align the NCTS with the CTC (Common Transit Convention is used to move goods cross border between EU member states under customs control). The changes will include:
- Removal of the requirement to submit Transports Internationaux Routiers movements to NCTS.
- Manage guarantees within NCTS and reference the amount of goods in the declaration.
- The mandatory inclusion of the Office of Transit field on the transit declaration.
Transit accompanying Document (TAD)
- Goods moving under the transit procedure must be accompanied by a TAD for presentation at destination or in case the goods are diverted, or there are any incidents during transit.
- The TAD must be filled in either in written form, by hand, or printed out by a computerised system of the economic operator.
- If you are moving goods into or through the UK under the Common Transit Convention (CTC), you must present your TAD for scanning, and your Vehicle Registration Number before arrival of the goods into the UK – this will likely be at check-in to enable the Office of Transit function to be completed by HMRC.
*EIDR details of goods into your records need to include:
- the commodity code
- the customs procedure code
- your declaration unique consignment reference – which is the main reference number that links declarations in the Customs Handling of Import and Export Freight (CHIEF) system
- purchase and, if available, the sales invoice numbers
- the date and time of entry in records – creating the tax point, which is used for working out VAT payments later
- any temporary admission, Free Zone, warehousing or temporary storage stock account references
- the Free Zone or warehouse approval number
- a written description of the goods – so they are easy to identify
- customs value
- quantity of goods – for example, number of packages and items, net mass
- details of licensing requirements and licence numbers
- details of any supporting documents, including the serial numbers, where appropriate, needed before the goods can be released
- details of the person you’re representing if you are making a declaration on behalf of someone else