Challenges of UK's Border Target Operating Model for European Exporters

Since leaving the EU in 2020, the UK has been amending their import requirements step by step. However the pandemic and war in the Ukraine, combined with the associated cost of living crisis lead to BTOM, being delayed until now. So what are the changes and challenges of the UK's Border Target Operating Model for European Exporters?

The UK is introducing its Border Target Operating Model (BTOM) in 3 stages in 2024. This means additional customs rules and checks when exporting goods to the UK. Depending on the types of products you export, this may mean more paperwork and/or physical checks at the border.

What is the Border Target Operating Model, or BTOM?

BTOM has been introduced by the UK government to improve the way goods are imported from the EU and the rest of the world, improving security in the categories affected. These new requirements will impact importers of animals, plants and plant products. The scheme is designed to modernise the border and speed up controls at the UK borders, however whether that really is the case remains to be seen.

Which products are affected?

All products requiring sanitary or phytosanitary (SPS) controls are affected. The designated level of risk will determine what kind of controls are imposed. Looking at the list, the "high risk" category are items where exporting them to the UK involves also the risk of also bringing in pests (eg Colorado beetles with potatoes, or the kinds of aphids that attack orchids) or diseases, either plant or animal born.

The British government has a?list of which animals and animal products have a medium or high risk. The UK Department for Environment, Food & Rural Affairs (DEFRA) also has a?list of plant and plant products and their risk level. You should always check your specific products just to be on the safe side.

High risk products

• Live animals, including live fish and bees
• Eggs for hatching
• Potatoes (& other tubers)
• Wood & bark from chestnut trees
• Wood from maple, birch, conifer or hazel trees
• Seeds from onions, leeks, oilseed rape, peppers and beans
• Seeds, branches, bark or wood from Douglas Fir or pine trees
• orchids

Medium Risk Products

• Meat & meat products intended for human consumption (chilled or frozen)
• fresh milk
• eggs & egg products (frozen or chilled - intended for human consumption as opposed to hatching)
• butter & cheese from raw milk
• wild caught fish (eg herring, mackerel, tuna)
• processed fishery products (eg smoked salmon or mackerel)
• other processed fish products (such as fish fingers)
• raw or fresh pet food
• parts of plants (other than seeds or fruits) such as tomato plants
• seeds/fruits of the prunus genus (plum, peach, cherry, nectarines)
• maize or corn seeds
• seeds/fruits of the rubus genus (brambles/blackberries, raspberries)
• some kinds of cut flowers eg carnations, gypsophilia
• avocados
• blueberries

Low Risk Products

This mostly covers other kinds of fruit & vegetables, but also some cut flowers such as roses. Cured meats and sausages that can be stored at ambient temperatures are also classified as low risk. My recommendation would be to check for your specific products This mostly covers other kinds of fruit & vegetables, but also some cut flowers such as roses. Cured meats and sausages that can be stored at ambient temperatures are also classified as low risk. My recommendation would be to check for your specific products because even just in the final week before this system was launched, the classification of some products has been changed.

What are the deadlines involved?

BTOM has been postponed 5 times before now in order to reduce the impact on British business (& because the systems simply weren't in place to implement it). The relevance of the Border Target Operating Model for European exporters commenced 31st January 2024 though and will be introduced in 3 stages:

• 31st January 2024 - The introduction of health certification on imports of medium-risk animal products, plants, plant products, and high-risk food and feed of non-animal origin from the EU.
• 30th April 2024 - The introduction of documentary and risk-based identity, and physical checks on medium-risk animal products, plants, plant products, and high-risk food and feed of non-animal origin from the EU.
• 31st October 2024 - Safety and security declarations for EU imports will come into force. Alongside this, the UK will introduce a reduced dataset for imports with the goal of reducing duplication in customs declarations.

So what does that actually mean in concrete terms?

From 31st January 2024 onwards

European exporters of plant based products which are medium or high risk will need to obtain a phytosanitary certificate from an approved plant health authority in their home country. eg for potatoes, such a certificate will need to be supplied for each pallet.

For products of animal origin, a health certificate from an approved veterinary surgeon (so called "veterinary certificate" in the home market will be required.

Additionally, you as an exporter (or whoever is acting as your customs agent) will need to submit a pre-notification via the EU TRACE system, 24 hours before the products are shipped from the exporting country.

On the UK side, the importer (or their customs agent) needs to issue a pre-notification via the UK's own IPAFF system. Again, this needs to be done 24 hours prior to the goods entering the UK.

From 30th April onwards

From this date onwards, British customs will also physically check import products entering the country. There will be Border Control Posts at UK ports and airports where these checks can be carried out.

From the 31st October onwards

From this date a so-called Safety and Security Declaration (SSD) will be required for ALL goods arriving from the EU. This is an electronic declaration which will need to be made to UK customs.

Also from this time, the single Trade Window will begin to be introduced, although not all functionality will be available at that point. The UK Single Trade Window (STW) is a digital platform that aims to streamline and simplify international trade processes for businesses in the United Kingdom. It will serve as a single point of entry for traders to submit customs declarations, make payments, and comply with regulatory requirements. The STW aims to reduce the administrative burden associated with international trade, enhance border security, and facilitate the flow of goods across borders.

You may also find this resource prepared by the UK government about the Border Target Operating Model for European exporters useful.

Goods in Transit

It would be beyond the scope of a single blog post for me to cover this topic in detail here. Generally speaking, you should know that health certificates and pre-notification in line with the sanitary and phytosanitary measures mentioned for imports apply also for goods in transit.

However, in general, the UK is attempting to make their systems both more digitised and more streamlined in order to improve efficiency, so I recommend referring to the government formal document on this topic for further detailed information.

Advantages of BTOM

From the UK's perspective, this model allows them to move to a digitally enabled, risk based intelligence system for effective border control. For sure, in the medium to long term, the Single Trade Window and the digitalisation of certificates will allow improve efficiency of imports (or exports) and increase the processing speed, decreasing waiting times - this is for sure a key point on sensitive products with short shelf lives.

“BTOM is an important and much-needed step forward for UK trade. In the long-term it will help reduce costs and friction for businesses, which in turn will help to grow the economy.”

Mario Forgione, Director Institute of Export and International Trade

Reducing the volume of paperwork required and the complexity of that paperwork will also reduce the cost of doing business - again, this is a longer term benefit for exporters. There should be less friction and delays in the flow of goods across the UK borders, including the Northern Ireland borders making it easier to do business.

There's also the option of "trusted trader" status for companies who are regularly importing to the UK - this is presently running as a pilot scheme, but is expected to be rolled out generally for companies who comply with the requirements at a later date. The core benefit here for European exporters is that if their partner or subsidiary in the UK has this status the goods will be subject to fewer checks on import, thus speeding up the whole process. There will also be the option of checks away from the border, meaning that additional costs can be kept to a minimum.

In the short term, the benefits may not be quite so obvious though.

Challenges of UK's Border Target Operating Model for European Exporters

As you can see from the SPS measures listed, there are additional steps to be taken in order to export into the UK. Health certificates don't come for free, nor do additional administrative steps if you need a customs agent to do the pre-notifications for you (& even if you do this yourself, there is a cost in terms of time and resources involved). A report in the Financial Times found that some of the costs associated with the Border Target operating model could be valued up to an additional 330 million pounds a year for businesses.

Of course, the stakeholders in the supply chain are unlikely to be able to absorb those kinds of costs so probably these will be passed onto the consumers, making imported European products less competitive in the immediate future (even if there are cost reductions over time due to the simplification of the certification processes).

Does your region have sufficient resources (vets, health inspectors) to deal with the additional administrative requirements involved with exporting to the UK? If you have to wait a week or 10 days for a veterinary inspection and then a couple of days more for the certificate, that's hardly a practical long term solution for products with short shelf lives.

For SMEs looking to export to the UK (or already exporting) these additional requirements vs the previous pre-Brexit free movement of goods can be quite a burden in terms of time required to obtain the necessary training, fulfill the new requirements and also the costs involved. For larger suppliers the new regulations will be less of a problem, but for smaller companies who have perhaps been used to shipping a couple of pallets at a time in a truck together with many other products, this may prove a challenge.

For sure, supply chains across the EU (& in the UK) will need time to get used to the new model of trading. These changes will require additional training and awareness, and may also result in a reluctance to do business with the UK.

Last but not least, there may potentially be delays during the initial phase of implementation due to a lack of resources or unfamiliarity with the processes.

Challenges are NOT insurmountable hurdles

The UK remains an attractive market for many European food, plant and feed exporters, however now that the final piece of the customs separation is falling into place, it requires a little more forethought in order to sell there successfully. With good planning in many cases you can put systems in place to ensure that your exports run smoothly. Of course, there will always be challenges but for the most part the risks can be mitigated by having documented processes. There may however be a certain amount of disruption as these processes are initially implemented, but in the long term the benefits should outweigh the disadvantages. After all, the regulations that the UK is introducing are for the most part, no different to exporting into any other country outside of the EU, so it still makes sense to use the historic ties to do business there, before looking overseas for new markets.

You can read my earlier post on what Brexit actually means for EU exporters here.

#kexplains #internationalbusiness #foodAndBeverages

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