BRITISH exporters and importers face paying tens of millions of pounds to comply with a new European Union regulation.

Companies that fail to comply with the new rule could face crippling delays to their exports and imports, burdening them with extra costs.

The EU Customs Security programme, which will start in January, is part of a drive to crack down on terrorism, fraud and conterfeit products. Under the scheme, all exporters and importers are required to have a special security certificate to move their goods quickly to and from the EU.

Charles Meechan, tax director at Ernst & Young, the accountant, said: “Companies which do not have the certificate will not be seen as a secure supply chain partner. They will be subject to delays and audits. This could leave businesses with higher supply chain costs and dissatisfied customers.”

Yet applying to become an “authorised economic operator” will cost businesses tens of millions of pounds. “Adding up all labour and administration costs, it is estimated that the application and implementation of the certificate will cost UK businesses in excess of £20 million,” Mr Meechan said.

Gary Campion, head of the international group at the CBI, said: “ While we agree that business needs to play its part in the fight against terror, we question whether the rules are proportionate. Dealing with the practicalities of it all will burden businesses with added costs.”

Companies in the United States, Canada and Australia have signed up to certificate programmes and other countries are planning similar schemes. The first EU certificates will be granted in January and it is understood that the new regulation will be phased in during next year, granting companies with the certificate a quick passage and leaving unauthorised companies with added paperwork.

Applications for companies who apply for the certificate in the UK will be processed by HM Revenue & Customs. Yet companies preparing applications have been hampered because the European Commission confirmed the criteria for the certificate only last month.

The process is also onerous. Mr Meechan said: “For some big businesses, it may take up to 18 months to apply and would require a team of full-time employees working on the application.”

Matthew Knowles, of the Federation of Small Businesses, said: “Adding another hurdle will make the process even more difficult for small firms.”

Tackling the red tape
Charles Meechan, tax director at Ernst & Young, recommends:

• Firms that think they may be affected by the new rules should obtain a copy of the criteria for becoming an “authorised economic operator” from the European Commission
• The short application form is included in the Commission documents, but the accompanying criteria document is about 60 pages long
• Businesses should carry out an impact assessment to check that they are ready, scrutinising all the areas that have to comply, such as their IT systems, their supply chains and human resources policies

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