I’m pro-EU and pro-Protocol, says businessman – but the Irish Sea border bureaucracy is absurd
A leading businessman who voted to remain in the EU and is not against the Northern Ireland Protocol has spoken of his dismay at the absurdly bureaucratic reality of the Irish Sea border.
Dermot Johnson, managing director of Johnsons Coffee, said that he has “no doubt that we are at this stage a political football”.
The Lisburn company, which has been trading for more than a century, recently brought four pallets of jam, marmalade and chutney from England.
That once straightforward transaction required staff to complete 19 forms.
Every time the order is repeated they will have to repeat the process – and more border processes are coming because parts of the new frontier have been delayed by grace periods which the UK extended against the wishes of Brussels.
The EU and UK met together yesterday to discuss the protocol, but there was no significant change of stance which will either address unionist constitutional concerns or the practical implications for businesses as a consequence of the border.
The government last night said that the meeting had been in “a constructive atmosphere”. Both sides restated support for the protocol.
Mr Johnson told the News Letter that he had voted in favour of staying in the EU, believing at the time “that it was exchanging certainty for a leap in the dark”.
Stressing that his opposition to the current situation was for business rather than political reasons, he added: “I don’t see why the NI Protocol should be a problem if it was implemented in the way the government stated it would be. I find the DUP ‘Ulster says no’ response unhelpful as they should be lobbying to make the whole thing sensible and proportionate.”
He said that “we are declaring imports for small amounts of goods using a system designed for bringing in containers from Asia and the Americas. Why should an EU-made, or even a UK-made product at this stage, have to go through all the import regulations to declare that it is suitable to be sold in the EU?”
Mr Johnson said that he had been infuriated to hear Transport Secretary Grant Shapps tell Radio 4 two weeks ago that “there are some changes in paperwork and what have you, but actually everyone’s getting to grips with this now” in Northern Ireland.
The businessman said that even after attending government seminars and reading its tariff guidance it was difficult to know that they would be charged tariffs on EU items and it only became clear when they came to submit their first import declaration.
That was meant to happen on February 4 but the government system was not operational and so they were unable to make those declarations until this month.
Farcically, he said that meant that “we have been buying goods without knowing the final cost”.
The protocol itself says that “the application of this protocol should impact as little as possible on the everyday life of communities in both Ireland and Northern Ireland” and refers to the “importance of maintaining the integral place of Northern Ireland in the United Kingdom’s internal market”.
Mr Johnson said that if the protocol was being implemented in line with those commitments, it would be far less of a burden.
He said: “There is no commercial or fiscal risk for goods of EU origin re-entering the EU. The only thing the tariffs do is to disrupt trade and put Northern Irish distributors at a commercial disadvantage when they are already shouldering a heavy bureaucratic burden in order to facilitate the protocol.
“A simple illustration of the issue is a French made quality jam that we bring in from the UK agent in England.
“As we are not a retailer, the goods are deemed to be at risk of entering the EU and from my understanding will now attract a tariff of 24%. If we were a retailer the goods would be deemed to be not at risk and no tariff would apply.”
He said that the Trader Support Service – the taxpayer-funded body meant to smooth over the new border – had suggested that he should buy directly from France rather than from the UK to avoid the problem. However, he said that there were “many contractual and logistical issues with that and even if we did as suggested we would still be commercially disadvantaged.
“Local shops would not buy the product from us – it would be available in the supermarkets at below our cost price as there would be no tariffs applied to the supermarkets.
“It is likely that our competitors in the Republic of Ireland would fill the vacuum and supply our customers.
“Which comes back to what is ‘the risk’? Why should the EU deem that EU origin goods sourced through GB are a risk. Certainly they pose no commercial risk and there is no loophole allowing backdoor entry into the EU.
“The only risk is to trader like ourselves being made commercially unviable due to this interpretation of the agreements.”
When asked about the jam issue, the government said that there were a series of schemes which could be used to avoid paying a tariff. However, they involve yet more bureaucracy.
The government said that the UKTS – a scheme not yet even operational – could be used to avoid tariffs and that while HMRC guidance refers to retail stores, it is “not restricted to retailers”.
The government said in a statement: “The UKTS can be used to declare goods not ‘at risk’ of onward movement to the EU on entry to NI where the goods are for sale to, or final use by, end consumers in NI (or England, Scotland or Wales in the case of movements into NI from GB). HMRC’s guidance includes examples to illustrate this, which refers to goods for sale in a retail store. However the use of the UKTS is not restricted to retailers, and can be used by businesses in all sectors who bring goods into NI that meet the criteria.
“A business bringing in goods for onward distribution in NI who has customers in both NI and ROI/the EU can use an apportionment to determine a proportion of their goods that can be declared not ‘at risk’. They must have a relatively stable trading pattern to support the split, and be able to meet all other requirements to declare goods not ‘at risk’ under the UKTS.
“Alternatively a business who buys goods that have been imported to GB from the EU and then moved into NI may want to consider using Returned Goods Relief to provide relief from the EU tariff on entry to NI. They would have to maintain proof of the export from the EU.”
One small consignment = 26 manual form entries
Dermot Johnson said that he recently brought in six cases - a small quantity - of coffee topping sauce which is made in England and which he then sells to local coffee shops.
To move that into Northern Ireland his staff had to fill in a consignment summary form with three manual entries, and a commodity code form with 11 manual entries.
He said that they then had to fill in four separate forms regarding conditions for entry of goods in the EU – a total of 12 manual entries.
The first of those conditions required them to declare that the goods were not “consigned from Bangladesh” - even though they had already declared that the goods are made in the UK.
Then another form is necessary to state that “Article 6.1b 2007/275 applies” (Goods benefitting from derogation to veterinary controls according to Article 6.1b of Commission Decision 2007/275/EC and Commission Implementing Regulation (EU) 2019/2007 as regards the labelling of beef and beef products.)
In total the package required six forms and 26 manual entries. Mr Johnson said that generally after submitting the declaration “there are then computer errors on the system and further inputs are required by us before resubmitting it”.
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