HC Deb 22 February 2000 vol 344 cc981-3W
Mr. Russell Brown

To ask the Chancellor of the Exchequer what arrangements have been made to assess demand from import/export traders for simplified Customs procedures across the community. [111910]

Dawn Primarolo

Customs are planning to carry out pilot studies of a Single European Authorisation (SEA) which would allow multinational traders to be authorised by and pay customs duty to one Member State in respect of all their import and export operations within the European Union. Excise duties such as on alcohol and tobacco products are excluded from these arrangements. The Government considers that SEA will increase the competitiveness of UK business by reducing their administrative burdens. It will facilitate the opportunities for speedy paperless movement of goods throughout the EU.

SEA is actively promoted by the main UK trade associations and their affiliated associations in the EU, including the Freight Transport Association and the Confederation of British Industry.

Under the terms of the trials businesses will be able to centralise the payment of duty in one accounting centre in one of the Member States, even though the movement of goods may take place elsewhere in the Community. VAT will be excluded from the trial because it is a 'destination' based tax and has to be accounted for in the Member State where the goods are 'consumed'. The provision of trade statistics, too, will remain a national requirement.

The United Kingdom plans to undertake up to 12 pilot studies. They will be closely assessed and each authorisation will be reviewed after 12 months. In addition, the project as a whole will be evaluated before any decision is taken to adopt the procedure permanently, which would require Community legislation. The procedure does not involve any transfer of responsibility from the Member States to the European Commission.

To safeguard the interests of both the UK and other Member States with whom we enter into such arrangements, a Joint Understanding on Co-operation will be signed by the customs administrations involved to govern the conduct of the pilot studies. Discussions are at their most advanced with the Dutch customs administration and I am placing a copy of the draft understanding in the Libraries of both Houses. The document is expected to provide a template for similar agreements with other Member States.

Although the pilot arrangements will allow duty to be paid in one Member State for goods imported into another, there will be no difference in the total amount the Member States' customs duty contributes to the Community. Customs will negotiate reciprocal arrangements with other Member States in respect of the 10 per cent. of duty which is retained by the Member States to cover their costs of collecting Community duties. It is envisaged that the arrangements will vary depending on the circumstances of each agreement.

Customs have already undertaken a financial impact analysis of the top 500 UK customs duty payers to assess what would happen to duty payments for each of these traders if they were authorised for SEA. The analysis suggests that the consequences for the UK' s retained Own Resources (including interest) for duty collected under SEA if the arrangements were universally implemented would be likely to be positive.

The SEA arrangements represent a significant departure from usual practice for collecting and making available Community own resources which would help to streamline and modernise the collection of customs duty, and facilitate trade by reducing traders' compliance costs.