Can tech solve the Brexit border puzzle?
16 August 2017
There are two competing visions of how goods will flow in and out of the UK after Brexit. Either the M20 will become a lorry park as endless customs checks at Dover choke the motorway. Or technology will help create frictionless borders and exporters will hardly notice any change. The truth, according to those who have studied the issue, is somewhere between the two. So, can technology solve the border puzzle? Right now there are no customs checks at Dover or other borders with EU countries. After Brexit there will be - unless the idea floated by the UK of an invisible border gets a better reception in Europe than it has today. Whatever the nature of the UK's trading relationship with the EU after we leave, it seems certain that there will be added bureaucracy for both companies and the government, but technology should lighten the load. Even if there are no tariff barriers between the UK and the EU, companies will probably have to show where their goods have originated, otherwise this country could be used to get something like New Zealand lamb onto the continent without any limits. Not necessarily - they can be conducted at factories before the goods depart, and much of the paperwork will in fact be digital, carried out online. If the UK sticks with the EU's safety and quality standards, there will have to be checks to make sure goods match up to those benchmarks and that doesn't have to be done at a port or border. But it will all depend on improved IT systems. Yes, but they are fairly old. Brexit Secretary David Davis says a new system will be in place by early 2019. It appears he is referring to the upgrade of HMRC's customs processing system, Customs Handling of Import and Export Freight (Chief), which is more than 20 years old and was due to be replaced even before the Brexit vote. The new system is called CDS - Customs Declaration Service - and is being developed in part by IBM. HMRC admits that it may now have to accommodate five times as many customs declarations as originally envisaged, but says it's confident that it will be ready in time. Not quite. Last month the National Audit Office said HMRC faced "some significant challenges to deliver the programme within the current timetable" and gave it an amber risk rating. But even if the system is up and running with all exporters on board, that won't be enough to create a frictionless border. Ports like Dover will need to install new technology, including number plate recognition, to match the lorries driving on and off ferries with the customs declarations lodged in the CDS system. This is not cutting edge technology and is in use elsewhere in the world, but HMRC seems dubious that it will be in place by March 2019 and says it would benefit from an implementation period. More exporters will also be pressed to become AEOs - Authorised Economic Operators -  taking advantage of an existing system which many large companies use to speed up the customs process. Other solutions being floated include using the blockchain technology which underpins cryptocurrencies to make the sharing of data about exports much simpler, and employing artificial intelligence to decide where random checks on shipments crossing the borders should be targeted. But with the deadline for getting back control of the UK's borders just 18 months away, such innovative technology ideas are not priorities for the civil servants entrusted with this task. In fact, making sure there are no traffic jams in Dover will be more about the arts of management, politics and the law than technology.
Right now there are no customs checks at Dover or other borders with EU countries. After Brexit there will be - unless the idea floated by the UK of an invisible border gets a better reception in Europe than it has today. Whatever the nature of the UK's trading relationship with the EU after we leave, it seems certain that there will be added bureaucracy for both companies and the government, but technology should lighten the load. Even if there are no tariff barriers between the UK and the EU, companies will probably have to show where their goods have originated, otherwise this country could be used to get something like New Zealand lamb onto the continent without any limits.
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Do we really need border checks?
Not necessarily - they can be conducted at factories before the goods depart, and much of the paperwork will in fact be digital, carried out online. If the UK sticks with the EU's safety and quality standards, there will have to be checks to make sure goods match up to those benchmarks and that doesn't have to be done at a port or border. But it will all depend on improved IT systems.
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Do they have to be at the geographic border?
Yes, but they are fairly old. Brexit Secretary David Davis says a new system will be in place by early 2019. It appears he is referring to the upgrade of HMRC's customs processing system, Customs Handling of Import and Export Freight (Chief), which is more than 20 years old and was due to be replaced even before the Brexit vote. The new system is called CDS - Customs Declaration Service - and is being developed in part by IBM. HMRC admits that it may now have to accommodate five times as many customs declarations as originally envisaged, but says it's confident that it will be ready in time.
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Don't we already have IT systems for customs?
Not quite. Last month the National Audit Office said HMRC faced "some significant challenges to deliver the programme within the current timetable" and gave it an amber risk rating. But even if the system is up and running with all exporters on board, that won't be enough to create a frictionless border.
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Does everyone think so?
Ports like Dover will need to install new technology, including number plate recognition, to match the lorries driving on and off ferries with the customs declarations lodged in the CDS system. This is not cutting edge technology and is in use elsewhere in the world, but HMRC seems dubious that it will be in place by March 2019 and says it would benefit from an implementation period.
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Will number plate recognition help?
More exporters will also be pressed to become AEOs - Authorised Economic Operators -  taking advantage of an existing system which many large companies use to speed up the customs process. Other solutions being floated include using the blockchain technology which underpins cryptocurrencies to make the sharing of data about exports much simpler, and employing artificial intelligence to decide where random checks on shipments crossing the borders should be targeted. But with the deadline for getting back control of the UK's borders just 18 months away, such innovative technology ideas are not priorities for the civil servants entrusted with this task. In fact, making sure there are no traffic jams in Dover will be more about the arts of management, politics and the law than technology.
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What about other technologies?