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Food for thought: How will the food industry cope with the start of ‘real time’ customs controls on imports to the UK from 1 January 2022?

November 2021

From 1 January 2022, food importers will require pre-notification on import declarations for products of animal origin, animal by-products and high risk food not of an animal origin.

Market analysts have outlined how the extra administration now required to process declarations relating to food and drink can be prohibitive. British Exporters have already been hit by these new requirements and for more complex food commodities this now means that there are 4-5 times the number of steps required to get British produce out to European markets. This has meant additional cost but in many cases this has led businesses to halt some export routes altogether citing additional costs and delays, cost, limiting infrastructure at borders and a general lack of expertise to comply with new requirements.

The government had originally planned this border control change from 1 April 2021, before delaying the planned change a number of times - firstly to 1 October 2021 before then shifting it once more to January 2022. The Government recognised there were several factors that pointed to businesses both sides of the channel not being ready to implement full changes. In an effort to provide continuity of movement of goods, deadlines were pushed back to give more time. In addition, export health certificates (EHCs), to be collected on food imports to Great Britain, have been confirmed as starting from 1 July 22.

We believe this extension will be welcomed by many organisations, in our recent survey 44% of respondents from the food industry told us they were not ready for new regulations starting on the 1 October. While many businesses have invested heavily to be ready for these deadlines, others have complained of the presence of an uneven playing field across importers and exports operating under different regimes.

Man talking picture of burger with smartphone

So what’s changed?

The phasing of import controls relating to the food and drinks industry has shifted over time. The range of delays serve to highlight the additional complexity, the availability of the providers needed to service the extra steps and the need for additional infrastructure in this critical sector - and therefore the challenge that the UK Government has had in landing key changes.

The statements around these changes have been revealing and the government has highlighted the need to give businesses more time. The continuing challenges of the pandemic, issues around the resilience of supply chains in addition to the complexities of managing the UK’s transition out of the EU will also have played a part in this decision making process.

  Go live date
Food and drink border control change Sep 2021
Pre-notification requirements for Products of Animal Origin (POAO), certain animal by-products (ABP), and High Risk Food Not Of Animal Origin (HRFNAO)April 2021 January 2022
Export health certificates (EHC) for POAO and certain ABP required July 2022
Pre-notification requirement and documentary checks, inc. phytosanitary certificates for plant products July 2022
Physical SPS checks on high risk plants at Border Control Posts (rather than destination), inc.POAO, certain ABP and HRFNAO.  July 2022
Checks at Border Control Posts will take place on live animals and  low risk plants and plant products July 2022

Food based requirements

Overall, the changes will give businesses more time to prepare and for supporting infrastructure, such as border control posts, to be established. The extra time also means that businesses were able to more easily navigate a period of increased demand around the re-opening of the economy following a period of lockdown. Some see the shifts as delaying inevitable changes and it has extended the period which could be a perceived uneven playing field across importers and exporters. According to the Food and Drink Federation demand for the top exported food products is down between 45-97% in January 2021 compared to previous years whilst import controls have yet to be introduced.

Delayed declarations scheme

In March, the government also announced a six month extension to the delayed declaration scheme which is due to run until 1 January 2022. The delayed declaration scheme uses the established principles of entry in declarants records whereby importers submit a reduced dataset at import and follow this with a supplementary declaration at a later point. As an easement, the UK government has allowed six months deferral for the supplementary declaration, for certain goods.

Again, whilst this extension may have been helpful for those that need additional time to prepare, we are now seeing backlogs and it is critical that traders act now and, crucially, that they have captured relevant data for imported goods ahead of time. Without continued maintenance of their customs declaration data and supporting clearance documentation, importers could be susceptible to compliance breaches when submission of this data is required by HMRC.

Overall the food supply chain is made up of a complex ecosystem of suppliers and ‘just-in-time’ in nature. It is unclear whether analyst predictions of delays, empty shelves and higher consumer costs will be fully realised, however the stories in the news of challenges facing retailers in Northern Ireland and broader supply chain issues should serve as a warning. All stakeholders in the sector should take advantage of the extra time to prepare for the changes to come.

Got milk? The challenges of moving composite products

One of the challenges in managing within new requirements following the UK’s transition out of the EU is the handling of composite products. This means that food products containing meat, milk, eggs or fish should be considered composite and require additional processing steps when completing customs administration.

Of course, the concept of composite products has been around for some time however under the terms of the new relationship between the UK and EU, a higher volume of goods will require additional checks and procedures and UK exporters looking to move good to the EU will need to ensure that they comply with these in order to keep EU shelves stocked with their products.

In practice this will mean arranging for an Export Health Certification, notification to and checks at an EU Border Control Post and compliance with EU standards and HMRC guidance. This is all doable but there is a risk that traders will not be prepared and may face additional delays and costs associated with these changes. In some cases we are seeing GB exporters stop or pause trade altogether.

From 1 January 2022 when pre-notifications for the imports are required for Products of Animal Origin similar challenges will be faced by food importers and traders should work to get ready ahead of time and seek support where they have any doubts.

Composite product: “a foodstuff intended for human consumption that contains both processed products of animal origin and products of plant origin and includes those where the processing of primary product is an integral part of the production of the final product” (European Commission).

What should you do now to get ready?

Above all else, importers considering the recent delays from the government should act now to prepare for incoming changes and to minimise any disruption to their operations. Traders should not see recent delays as a reprieve nor a sign that current ways of working will not change. When considering upcoming changes we would encourage you to:

  • Make sure that accurate data capture and effective documentation procedures are in place - This means closely reviewing government guidance and checking and amending where necessary any existing procedures to ensure that they are appropriate for requirements. For example, the formal procedure for delayed declarations, Entry into Declarant Records (EIDR) requires 14 data points. These will be hard to replicate later on, so it is imperative that these are maintained to ensure you can meet compliance deadlines.
  • Assess how current ways of working will cope with new requirements and scale to deal with increased demand levels - Many organisations will feel that they ‘have customs covered’ through an internal team or outsourced partner but it is worth assessing whether new controls will be catered for and how scalable arrangements are. For example, highly manual processes may struggle to meet increased levels of demand. Furthermore, traders with concerns around their supplier base should engage with partners early on to identify any issues.
  • Seek support with any concerns - Ultimately getting this right will be challenging with few organisations having all of the expertise in house to deal with the more complex requirements. For example, traders will need to be confident that they have selected the right customs commodity code classifications and licensing arrangements, that their valuation methods are correct and that claims of preferential duty are correct. If in any doubt traders should seek direction and support.

PwC customs broker service can help keep your goods moving, not only assisting with your import and export declarations but also in advising you on core elements of your customs process and in the collation and storage of your customs data to submit delayed declarations in 2022. We also have the capability to rapidly identify both classifications and licensing requirements which many traders may find challenging. Our Customs advisory service, supported by our customs experts, can help you overcome the challenges presented by the new border requirements and ensure you can continue to move goods now. Please get in touch if you need any support.

Contact us

Matthew Paul Clark

Matthew Paul Clark

Head of UK Customs, Excise & International Trade Team, PwC United Kingdom

Tel: +44 (0)7718 339388

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