If ever there was doubt about the complexity of changing Customs systems then the recently announced amendment to the Union Customs Code spells it out.
Any super-sized government IT system is a challenge.Then just add in the mix Customs, international trade, the EU,plus a smattering of brand new components and you can begin to grasp the the scale of this particular Customs IT task.
This latest amendment merely formalises what has been obvious to insiders for some time. The cry for “more time” has now officially won the day. Distilling the 12 pages of the amendment,a tabloid headline might read something like “EU wide Customs system takes 12 years to deploy shock“.
It is worth a couple of minutes consideration what this amendment might signal for the UK considering Theresa May is looking to negotiate a technological solution to underpin the UK Customs arrangements post-Brexit.
A short history
The Union Customs Code (UCC) was in the making for several years. It’s purposes were to automate EU Customs systems, standardise data sets and align Customs regulation with modern commercial practice.
A very large technical challenge lay within the UCC. It had to bring all member states Customs IT systems up to scratch and deliver a number of new EU wide Customs systems. 17 systems needed upgrading, many were interconnected.
The regulation was published in October 2013. It allowed for implementation in May 2016,with a transition period to 2020.
To be fair, the deadline was ambitious and 80% of the systems are expected to be completed on time. In January 2018 the European Parliament reported that the “work involves a much heavier than expected investment in terms of time and in financial terms in fully reprogramming some of the existing electronic systems“. This resulted in the 2 March amendment allowing more time.
Meanwhile the UK knew the UK Customs IT system CHIEF needed replacement for capacity,technology and UCC reasons. So,work began on CDS which is now slated for 2018 deployment.
Amendment to UCC 2 March 2018
The result is that the UCC transition period is now extended to 2025 to allow the IT systems changes to be completed.
To recap: the UCC regulations were published in 2013 following years of negotiation. Now, the final parts that make it function in full will be ready “just” 12 years later. No one said it was easy!
UK and Brexit – a technology solution
On Friday 2 March Theresa May said “when it comes to goods, a fundamental principle in our negotiating strategy should be that trade at the UK-EU border should be as frictionless as possible“.
It is clear no one wants border delays.
In order to do reduce delays and security risks technology must play a part. The UK Customs position paper on Future Arrangements last summer set out some broad ideas. Furthermore modern Customs-border thinking depends on tech to do the heavy-lifting on frontier controls.
The Prime Minister said “I recognise that some of these ideas depend on technology, robust systems to ensure trust and confidence, as well as goodwill – but they are serious and merit consideration by all sides.”
She went on to say the UK (negotiation position will be) “drawing on the most advanced IT solutions so that vehicles do not need to stop at the border.”
Frictionless is the key and that is delivered with technology and IT systems.
3 things on the EU,transitions and systems
- Technology and Customs are rarely good bed fellows. The UK is seeking a forward looking, as yet unspecified Customs arrangement with the EU using technology. This requirement has been made a a cornerstone of the Brexit negotiation. It will need a technology solution. Such solutions are complex and integrated needing IT work in the UK and Europe. Changes rely on technology partners, government officials and trade to work together. They require significant time, effort and investment, all of which are often underestimated.
- The EU is pragmatic about 1. For years such negotiation and consultation have taken place on Customs changes, eventually agreement is reached. Regulations are published with deadlines. History says there is always legal wriggle-room to extend deployment deadlines and transition periods. We should keep that in mind when David Davis et al return from their Brussels trips in the coming months proclaiming a deal is done and a date is set. Such pronouncements do not necessarily translate into action on the ground.
- IT systems aren’t delivered on time. This EU amendment is just one example.Cost, effort, real-world benefits and timelines are often spectacularly wrong. When this happens something has to fill the gap – interim arrangements. Either the date we see a new EU-UK Customs arrangement in force is years beyond any so far suggested or we need to prepare for a costly,ill-functioning process from 2021. Neither will make cross border trade feel very “frictionless”