Customs Transit Procedure


2018 No. 1258

2. Purpose of the instrument

2.1 This instrument forms part of the legislation to be made under the Taxation (Crossborder Trade) Act 2018 (TCTA) to create a new standalone Customs regime following the United Kingdom’s (UK) exit from the European Union (EU). This instrument will be necessary to implement the UK’s obligations and benefits as a contracting party to the Common Transit Convention (CTC), which currently remains subject to negotiations and accession processes, and the Transports Internationaux Routiers (TIR) Convention. It is currently a party to both, by virtue of its membership of the EU for the CTC, and these conventions facilitate international transit by suspending the duty and tax payable on goods through internationally-agreed rules and procedures, and they enable simple cross-border trade between the UK and other countries (for example the TIR Convention covers 74 countries, including all those in the EU, EFTA and the EEA), and the instrument provides similar arrangements fortransit in the UK and long-standing arrangements for North Atlantic Treaty Organisation (NATO) forces.

4. Extent and Territorial Application

4.1 The territorial extent of this instrument is the whole of the United Kingdom.
4.2 The territorial application of this instrument is the whole of the United Kingdom.

6. Legislative Context

6.1 This instrument is coming into force using the power in section 52(2) of the TCTA which allows subordinate legislation to be brought into force on a day appointed by the Treasury in Regulations. This is on the basis that the Treasury is of the view that it is appropriate in consequence of, or otherwise in connection with the UK’s withdrawal from the EU.

6.2 This regulation is made using, for the first time, powers contained within the Taxation (Cross-border Trade) Act 2018 (c. 22) in order to maintain after EU exit the UK’s existing positions with regard to the Conventions. The UK’s becoming an independent contracting party to the CTC will need to be ratified through the process set out in sections 20 to 25 of the Constitutional Reform and Governance Act 2010. This instrument is made using powers conferred by the following provisions of the TCTA:
• Sections 31(6) and (7) 32(7), (8) and (10), 51(1) and (3) and 52(2);
• Paragraph 7 of Schedule 1;
• Paragraphs 5, 7, 19(2) and 21 of Schedule 2.

6.3 Currently the main provisions governing the importation of goods to the UK are set out in directly applicable EU regulations. The Union Customs Code, Regulation (EU) No 952/2013 (UCC) is the overarching legislative framework for customs adhered to by all Member States. Sitting under this regulation are the implementing regulation (Commission Implementing Regulation No 2015/2447) and delegated regulation
(Commission Delegated Regulation No 2015/2446). The delegated regulation supplements certain non-essential elements of the UCC and the implementing regulation is in place to ensure the existence of uniform conditions for the implementation of the UCC and a harmonized application of procedures by all Member States. The legal basis implementing the UK’s membership of the Conventions, and the similar rules for NATO forces, is contained within the UCC andits delegated and implementing regulations.

6.4 When paragraph 1 of Schedule 7 to TCTA is commenced these EU regulations will be replaced by provision made by and under TCTA (including this instrument) and to the extent that these EU regulations (which will form part of the law of the United Kingdom as a result of section 3 of the European Union (Withdrawal) Act 2018) impose or otherwise apply in relation to any EU customs duty/import duty they will cease to have effect.

7. Policy background

What is being done and why?
7.1 In the White Paper ‘The Future Partnership between the UK and EU’ (July 2018), the UK stated its aim to reduce trade frictions with the rest of the world in order to promote global trade opportunities and economic growth. The UK wishes to accede to the CTC in its own right after EU exit in support of this strategic policy objective.
This instrument, together with the TCTA, is designed to broadly replicate the effect of the EU legislation referred to above to deliver the required legal framework.

7.2 The instrument sets out the various rules that will apply when goods are moving in the UK under a transit procedure, including the CTC or the TIR Convention. This

• a requirement to present goods to HMRC at the start and end of the transit journey in the UK;
• rules about declaring goods to the procedure;
• the obligations on a person who has declared goods to the procedure or a person who is carrying these goods, and rules concerning the discharge of the procedure;
• requirements on HMRC in relation to the exchange of information and the provision of assistance to other customs authorities in relation to goods moved under the procedure;
• providing for the existing simplifications under the procedures.

7.3 At the time of laying the UK may not have fully completed its accession process to the CTC and a result further amendments or additional provisions may be needed in due course. These may be in the form of an amending or additional SI made under powers in the TCTA or guidance.

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