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Tech to solve post-Brexit customs woes doesn't exist yet, peers say

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The UK’s post-Brexit customs arrangements have today come under even greater pressure, as peers warned the tech doesn’t exist to back up the plans.

In its proclamations about future customs arrangements, the British government has repeatedly leaned on the idea that “new technology” will solve its border-related woes.

But that’s just the kind of magical thinking that politicians are all too often criticised for, and – in what will be a surprise to no one – the House of Lords EU External Affairs Sub-committee said it isn’t likely to be a silver bullet for customs either.

The committee, for example, gave short shrift to the government’s dream of avoiding a hard border in the island of Ireland with technology, based on evidence from other countries.

“Customs checks necessitate some form of physical infrastructure,” the report said.

Technology does not yet provide the answer: as Swiss and Norwegian customs authorities told [another parliamentary inquiry] many technological developments that could reduce (though not fully eliminate) the need for physical checks at their borders with the EU remain a long-term aspiration.

And hopes that technology could speed up processing for customs and regulatory checks – and thus ease pressures at the border when more goods need to come through – were also treated with some scepticism.

The Port of Dover told the peers that tech “was unlikely to reduce” processing time for goods, while trade policy expert Allie Renison said there was “not a huge amount that technology can do to mitigate” necessary regulatory checks.

Meanwhile, in a no-deal scenario – which various government bodies have said will pose them a multitude of problems – there are few options to use tech to mitigate disruption.

The committee noted HMRC’s efforts — which El Reg has documented in detail over the past year – to ensure there is some kind of system in place if the UK crashes out of the EU, but pointed out that even execs don’t think it will be up to scratch.

Indeed, HMRC permanent secretary John Thompson has previously told MPs that “a fully functional, optimal system will not be in place on 1 April 2019” – that could take up to three years to have up and running.

And even getting the basic system in place is a challenge for the department, with delays in the planned upgrade of its current declarations system (CHIEF) to the new system (CDS) meaning the two will have to be run concurrently.

Today’s report also noted that businesses that don’t already trade outside the EU are likely to need specialist software to use these systems, which will come at a cost.

Another proposal the committee noted won’t be ready in time for March 2019 is a proposed inventory-based system at the port that would allow traders to make pre-declarations and then match lorries as they come through with vehicle number plate recognition technology.

Looking beyond this, some witnesses painted a picture of a brave new world without customs declarations systems. One witness said they would be gone “in five or 10 years’ time … because it will be all about technology, data flow and risk management. It will almost be untouched by human hand, because it is data flow”.

The report highlighted, for instance, a Singaporean model of single-window technology that would give traders a single point of government contact. This would integrate all of the 26 government organisations at the border and no longer require the so-called “wet stamp” on paper as everything is done electronically.

But just because the principle exists – and HMRC is aware of it – doesn’t mean it is practical or plausible.

“We have set out the bones of it and ministers are very interested, but, to be transparent with you, it is a significant technology programme — hundreds of millions of pounds — and will take five years to implement, to be up front about it,” Thompson told the committee.

As such, the peers said they welcomed the government’s consideration of the idea – but pointed out that not only was it untested in the UK, it “will not obviate the need for checks and will not be available in the short term”. ®

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