The myth of the Brexit “Cliff Edge”


Before the Brexit referendum we had Project Fear. We now have the myth of the Cliff Edge that British businesses are going to stumble over in March 2019 – causing us to beg the EU to allow us a transition period of an extra two years – or is it five years?

Like most of the nonsense surrounding the Brexit negotiations, the Cliff Edge is purely mythical and is being used by the Tory government to scare us into accepting whatever terms they get. The reality is much simpler.

All goods exported from, or imported into, the UK are dealt with by one of two very large scale and very efficient computer systems that have been working for more than a decade. They are the Electronic Confirmation Matching System (ECMS) that is used by EU exporters/importers and the Customs Handling of Import and Export Freight (CHIEF) system that is used for trade with the rest of the world.

Both systems do the same job. They enable the recording of the movement of goods by land, air and sea,  allowing importers, exporters and freight forwarders to complete customs formalities electronically in advance. Sophisticated profiling systems allow most goods to pass at ports and airports without formality and identify the few items that need to be physically inspected.

The only decision an exporter or importer needs to make is which system to use.  Registering online takes a matter of minutes (not two years).  Revenue and Customs is an integral part of the system and duties payable are handled online.

The amount of duty payable on goods is built into the system.  This is the only question that needs to be decided by negotiation between the EU and UK. The amount of customs duty can be easily be settled by March 2019. If it is not, then WTO rates will apply.

Note that at present, there is nothing to stop a British exporter or importer from trading with non-EU countries around the world, using the CHIEF system.

Whichever way you look at it, the Cliff Edge scenario is a fantasy.

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