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Customs and Excise

Dáil Éireann Debate, Wednesday - 10 March 2021

Wednesday, 10 March 2021

Questions (145)

Louise O'Reilly

Question:

145. Deputy Louise O'Reilly asked the Tánaiste and Minister for Enterprise, Trade and Employment the developments that have been made in addressing the issues in relation to rules of origin for goods that pass through UK from the European Union that are unloaded and then reloaded and delivered to Ireland, resultantly losing their free trade and single market status. [13521/21]

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Written answers

I am acutely aware that particular issues have emerged, and continue to emerge, for stakeholders as we all seek to implement the new EU-UK trade arrangements under the Trade and Cooperation Agreement (TCA) consequent on Brexit. These are the inevitable outworkings of Brexit, a policy choice by the UK with which we did not agree, with the UK now a "Third Country" from a trade policy perspective having exited the EU's Single Market and Customs Union as of 1 January this year. One such issue is where the UK acts as a distribution hub for goods, including those sourced from the EU, as referenced by Deputy O'Reilly.

In that regard, "Rules of Origin" are the premise upon which any Free Trade Agreement (FTA) seeks to confer the preferential tariff rates - zero in the case of the TCA - on the members of the Free Trade Area encompassed by the FTA, namely the UK and EU-27 in this instance. The TCA outlines the conditions which have to be met for goods to avail of a preferential tariff when moving between the EU and the UK. The primary condition is that goods being exported to Ireland from the UK must be of UK origin to avail of the 0% tariff rate and goods being imported to the UK from Ireland must be of EU (including Irish) origin to avail of the 0% tariff rate on entering the UK.

As the Deputy points out, goods can potentially lose their Union origin if they at any point exit customs supervision or are released into free circulation after they leave the EU as they transit to Ireland. Having regard to the Union Customs Code, which sets out the rules applicable for goods brought into or taken out of the customs territory of the Union, on 27 January this year, the Revenue Commissioners issued eCustoms Notification 14/2021 which provides guidance and scenarios for the movement of goods from the EU to Ireland through the UK whereby the tariff may not be incurred.

For example, where the movement of the goods through the UK is a requirement, Revenue have advised that consideration could be given to using the “transit procedure” provisions of the Union Customs Code. Under this mechanism, where EU originating goods are brought into the UK from an EU Member State, the goods can be stored in a customs warehouse in the UK and not lose their EU preferential origin thereby not incurring a tariff. In this connection, there is a requirement to have a customs warehousing authorisation from HM Revenue & Customs (HMRC) in the UK and HMRC provide advice on the rules and requirements relating to the Customs Warehouse procedure in the UK, including the conditions associated with the operations which can be carried out on the goods while they are in the warehouse.

This Revenue Commissioners' Guidance also addresses Inward Processing and Returned Goods options.

Alternatively, where there is no need for the goods to transit through the UK as part of the import, the direct movement of goods from the EU to Ireland should be considered as an option by Irish importers thereby avoiding the goods leaving the EU Customs Union or Single Market. Therefore, if goods travel directly from the EU to Ireland, for example from a port in France, Belgium or the Netherlands, the goods have not left the Single Market and the Customs Union and thereby remain in free circulation in the Union. In this regard, connectivity between Ireland and Continental Europe has been significantly enhanced through additional direct ferry sailings/capacity.

I should also add that my Department and the Enterprise Agencies are in constant contact with industry bodies including through our Enterprise Forum and the Retail Forum to identify where sectoral and regional impacts of the TCA are emerging at an operational level. We have a large number of Brexit supports including planning vouchers, consultancy and mentoring supports, the Enterprise Ireland Ready for Customs Grant of up to €9,000, as well as financial supports for adapting and restructuring business models and grants for research into new markets to assist companies respond to the new TCA dispensation.

Enterprise Ireland hosted a webinar last month on ‘Rules of Origin: How Rules of Origin affect your business to trade to, from or through the UK’. The webinar focused on the implications of rules of origin for Irish businesses, and some solutions that can help to resolve the current challenges that businesses face. While the webinar was aimed at Enterprise Ireland and Local Enterprise Office clients, it was also open to all Irish companies that trade with the United Kingdom and my colleague, Minister Troy, participated in the webinar.

Finally, Budget 2021 provided contingency funding for COVID-19 and for all Brexit outcomes and the Government is committed to assisting firms on a dynamic basis in responding to Brexit, especially those firms that are in the most severely impacted sectors.

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