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Boris Johnson's UK government is building a £200 million system to handle customs declarations for Northern Irish businesses after Brexit

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  • The UK government will handle customs declarations for thousands of Northern Irish businesses.
  • Boris Johnson’s government is procuring a new system costing up to £200 million that will carry out customs declarations on behalf of businesses importing goods across the Irish Sea.
  • The new system is part of the government’s efforts to prepare Northern Ireland for the effects of Brexit.
  • As of next year, there will be an array of new checks on goods from Great Britain to Northern Ireland.
  • Business groups welcomed the announcement but warned there was still work to do to prepare for 2021.
  • The Labour Party accused Johnson’s government of leaving it too late to help Northern Ireland prepare.
  • Visit Business Insider’s homepage for more stories.

Boris Johnson’s government has announced support for Northern Irish businesses worth hundreds of thousands of pounds amid growing concern that time is running out for firms to prepare for new checks created by Brexit.

Michael Gove, the Chancellor of the Duchy of Lancaster, and Brandon Lewis, the UK’s Northern Ireland secretary, will on a visit to the province on Friday unveil a new system for assisting companies with costly paperwork from next year.

The UK government is procuring a system called the Trader Support Service, which will handle customs declarations on behalf of Northern Irish companies importing goods from Great Britain and the rest of the world from January next year, effectively picking up the customs bill for Northern Irish companies bringing in goods across the Irish Sea.

The free-to-use service will provide “vital support and guidance to traders,” Gove, who is overseeing the UK’s Brexit preparations, said ahead of his visit to Northern Ireland. It is set to cost Johnson’s government up to £200 million and will be launched in September. The UK government is in talks with at least two companies about delivering the system, sources familiar with discussions have told Business Insider.

Under the terms of the Brexit withdrawal deal agreed last year, when the transition period comes to an end on January 1, 2021 Northern Ireland will continue to follow the rules of the EU’s customs union and single market in order to avoid a contentious hard border with the Republic of Ireland, whereas the rest of the UK will break away.

This will result in new checks on goods going from Great Britain to Northern Ireland, including customs declarations, safety & security requirements, and strict EU rules for goods of animal-origin, also known as Sanitary and Phytosanitary standards (SPS.) The Trader Support Service will handle customs and safety & security requirements.

With just five months left until the Northern Ireland protocol comes into effect, there is growing alarm in the province that time is running out for firms to prepare for the new processes and red tape it entails.

UK government officials do not expect to publish full details of how Northern Ireland’s borders will work until the autumn, once they have been agreed with the EU, potentially leaving firms just weeks to prepare for the changes.

There is particular concern for Northern Ireland’s smaller businesses, which make up a significant chunk of the province’s economy. Most say they are preoccupied with responding to the coronavirus outbreak and do not have time to prepare for a new trading relationship with the rest of the UK. “To say the timing is not ideal would be understatement of the century,” a senior figure in the Northern Irish business community told Business Insider.

Northern Irish businesses that want to use the new Trader Support Service will be required to register and then provide information about the goods they are importing across the Irish Sea. The new service will also advise businesses on what they need to do to comply with the terms of the Northern Ireland protocol.

As well as the contract worth up to £200 million, the UK government has announced £150 million to fund the IT systems that will underpin the service, plus £300 million for peace programmes across the island of Ireland.

Louise Haigh, the opposition Labour Party’s Shadow Secretary of State for Northern Ireland, said new detail about how Northern Ireland’s borders would operate was “welcome” but accused the government of leaving work “to the last minute.”

“And with time running out, big questions remain unanswered,” she said.

“Traders are still waiting for detail on the proportion of physical checks on agri-food goods at Northern Irish ports, little is known about which goods will face tariffs, nor on whether exit summary declarations will be needed NI-GB.

“It’s time businesses in Northern Ireland were given the answers they need.”

Northern Irish business warns there is still work to do

Northern Ireland checks Warrenpoint

Warrenpoint port, Northern Ireland. Liam McBurney/PA Images via Getty Images

Major business groups in Northern Ireland welcomed the announcement but stressed that firms needed more information and help from the government to prepare for new trading arrangements in January.

The Northern Ireland Retail Consortium’s Aodhan Connolly said the measures represented a “significant investment of time, money and resources to remove frictions” between Northern Ireland and the rest of the UK.

However, he warned that there was still “much progress still to be made” on key issues, chiefly SPS. “Quite simply without mitigations on Export Health Certificates which cost £200 each and SPS checks, either products or business models will become unviable,” he said.

Manufacturing Northern Ireland’s Stephen Kelly said the UK government’s “commitment to cover the Customs costs is very welcome first step” but several issues remained, including “resolving SPS checks, VAT and legislating to protect our position in the UK market.”

The Federation of Small Businesses Northern Ireland’s Roger Pollen also welcomed the government support but called on it to provide “clear, practical guidance practical guidance about what changes, if any, businesses will have to make.”

“What small businesses want to see is common-sense agreement regarding the implementation of the Northern Ireland Protocol as soon as possible, in a way that does not unduly burden firms with additional administrative costs,” he said.

Stephen Farry, the Alliance member of Parliament for North Down, said the timetable for readying Northern Ireland’s borders was “unrealistically tight” and expressed concern that it may force the government to rush the procurement process.

“I am concerned at the turnaround time on this procurement and what in turn will be expected from any successful bidder in terms of delivery,” he told Business Insider.

“There is still not sufficient clarity from the Government on what is going to be involved in terms of regulatory and customs process. The procurement process is both too late and yet premature as the necessary contextual detail is still not present.”

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