The European Union’s (EU) main economics and tax official said on Wednesday that the risk of a ‘no-deal’ Brexit on April 12 was increasing, as he explained the bloc’s contingency plans for customs checks.
“The EU customs code would apply to all goods arriving from the UK,” EU Economic Affairs and Tax Commissioner Pierre Moscovici told a news conference.
“We have to ensure full application of the EU customs code as soon as the UK leaves.”
“If there is a no-deal scenario, new customs controls would have to be introduced … That does not mean we would systematically check every single … lorry … We would be controlling (checking) goods on the basis of risk analysis.”
He said EU companies trading with the UK had to be ready for additional costs and bureaucracy related to an increase in customs checks, while travelers and their luggage would also be subject to more checks than at present.
Moscovici said some EU members estimated their import/export customs formalities could grow by as much as half in the event of an abrupt no-deal Brexit.
He said “complex calculations” of VAT reimbursements were also to be expected. “This will have big impact on cash flow of businesses,” he said.
“Without an exit agreement, the activity of thousands of European businesses and travelers would be disturbed by reintroduction of customs checks.”
On the most sensitive issue, that of the Irish border, Moscovici carefully avoided giving any clear answer.
Since Britain has told Brussels it wants to leave the EU’s customs union as it leaves the EU, the bloc says controls on animals and goods will need to take place on the land border between EU member Ireland and the British province of Northern Ireland.
But both London and the EU want to avoid deploying elaborate border infrastructure on the island, fearing that it could become the target of violence and undermine peace in the province, which saw three decades of sectarian violence at the end of the last century.
“In a no-deal scenario, both the EU and the UK would face a challenge of protecting their single markets … They would need to carry out the necessary checks,” Moscovici said.
“We are working closely and intensively with Ireland to organise these checks in the least disruptive way possible, and as much as possible away from the border.”
He added that the EU could give Ireland more money and other assistance to meet the challenge. He stressed that the EU expected Britain to live up to its obligations of guaranteeing an open Irish border under the Good Friday Agreement peace deal.