Mr. Gerry Harrahill:

I welcome the opportunity to brief the committee on the operation of customs checks since the end of the transition period on 31 December, including some practical aspects from a Revenue perspective on how matters have progressed with trade and business. I hope it is helpful to the committee for me to give a clear picture of how goods are imported and the practical operation of customs formalities operated by Revenue and how that interacts with other State agencies, including the Department of Agriculture, Food and the Marine, the Food Safety Authority of Ireland and the HSE.

In a standard goods import from Great Britain since 1 January there are a number of parties involved. These include the exporter on the Great Britain side and possibly the customs agent representing the exporter; the importer in Ireland and possibly a customs agent representing the importer; the logistics, freight forwarder or haulage business involved in actually moving the goods from Great Britain to Ireland; and the driver of the truck and the goods it contains, who boards the ferry and arrives, for example, in Dublin Port.

The key customs components are the export declaration on the UK side, the import declaration on the Irish side, the safety and security declaration on the Irish side and the Irish pre-boarding notification, process, which applies on both the UK and Irish sides and which effectively permits the truck and its goods to board the ferry. All of these elements are critically dependent on data and their accuracy and timeliness. Getting those data elements together means that all the players in the supply chain need to be aware of their specific role, have access to and be capable of providing that data at the right time and share this information so that declarations can be completed correctly and on time.

Any delay or disruption in that process impacts on key features of that integrated supply chain, including the ability to board a ferry or the driver's ability to leave the port immediately following disembarkation at the port of destination. Since 1 January 2021 there have been 9,318 inbound freight movements across 250 ferries from Great Britain, involving approximately 668,000 declarations of various types. In addition, approximately 61,000 export declarations for movements to Great Britain were processed. All of these declarations have been successfully processed by Revenue's systems.

With the exception of specific notification requirements for certain sanitary and phytosanitary, SPS, products, the interaction with other State agencies is driven by the work undertaken by Revenue in receiving and processing customs declarations, risk-assessing those declarations and giving one of three routings to the goods movement when it arrives in Ireland: green means it is good to leave the port; orange indicates that a documentary check or similar control will have to be implemented; and red means a physical examination or inspection of the goods involved is required.

Sophisticated IT systems have been developed between Revenue and the other agencies to allow for maximum information sharing, automated communications between the Departments, reuse of data in order to reduce duplication of effort by both business and State agencies and to allow as much work as possible to be done while the ferry is sailing and in advance of the arrival of the goods in Ireland. Revenue's approach is to ensure that trade flows efficiently through the ports on arrival in Ireland and that where goods require any form of documentary or physical examination or other checks whether by Revenue or the other agencies, such interventions can be accommodated in the most efficient way possible. The customs ro-ro service is key in supporting this approach by providing a direct channel of communication with the haulage sector which was not possible previously, by reusing data and thereby reducing the number of customs declarations required and by giving visibility to the multiple stakeholders at each step of the process before, during and after the ferry journey. Based on engagement with the haulage representative groups, Revenue is exploring further ways to enhance this.

Additionally, the PBN process ensures that Revenue and other State agencies have full sight of all consignments on any given truck which allows the necessary work on risk-assessing those consignments to begin while the goods are still on the ferry. Being able to do this work in advance allows Revenue to determine whether the consignment is red-routed, orange-routed or green-routed. I am aware that it has been advocated that the PBN process should be scrapped. Without the PBN process, which is a core element of the Revenue ro-ro service, 100% of goods movements arriving in Ireland would have to be red-routed rather than the position that we have achieved where more than 70% of consignments are being green-routed, allowing the goods to move directly from the ferry out of the port. Anyone advocating the abolition of the PBN process and the customs ro-ro service is advocating that a hugely effective measure in facilitating the speedy movement of trade through our ports would be scrapped and replaced by a requirement that all goods movements would be presented to customs.

The critical infrastructure needed to be able to manage and process the flow of traffic through our ports and airports after 31 December is in place and operating as intended. The relevant State agencies have been working together since 2018 to ensure not only that the infrastructure needed is in place but also that we have developed good working relationships and a streamlined approach to import controls. That is evidenced by the introduction of the new IT systems referred to previously, the co-location at the State facilities in Dublin and Rosslare ports and the co-ordinated approach taken by operational staff on the ground.

I want to briefly mention the IT systems operated by Revenue. I have already touched on certain elements such as declarations. As Deputies and Senators will probably be aware, in line with the objectives of the Union customs code, completion of customs formalities is heavily dependent on IT processes and systems and so data accuracy and data timeliness are hugely important. Revenue's IT systems have performed well and as intended. The fact that a specific transaction is not accepted by Revenue's IT systems or cannot be processed is not a fault of the system if the data being submitted is incorrect or incomplete. The solution must be one that involves compiling the required, correct data. Revenue must have the necessary information to be able to carry out the risk assessment to which I referred and to make sure that declarations are valid and that goods requiring a documentary check or other processes can be processed efficiently. There were two specific performance issues in relation to Revenue's customs systems and on those occasions, we notified trade and business, clarified what the fallback procedures were and restored the systems to full operation as quickly as possible. We apologised for the inconvenience caused when this happened, and I repeat the apology today. It should be noted that all declarations lodged into our import system during the performance issues were received correctly and were processed on resumption of the full system.

I will comment on the first three weeks of experience.

All of the State agencies recognise that the new trading arrangements with Great Britain represent the biggest change for trade and business since Ireland joined the European Economic Community almost five decades ago. So far, we are seeing that exports to Great Britain are moving relatively smoothly. In the context of imports, traffic movements overall into Ireland are down on previous years for the same period by approximately 20%. Early indications suggest that freight or goods movement may be down further, possibly by up to 50%.

It is important to acknowledge that some businesses are successfully continuing to trade because their levels of preparation have been excellent and they addressed all of the challenges of the new trading environment well before of 31 December. It is also clear that some businesses, large and small, are having difficulty, in some cases severe difficulty, adapting to the new system and controls. We are seeing that, even in the case of significant international businesses the information required to complete the various declarations is proving very challenging because, in many instances, the effort required to assemble all the necessary information was underestimated.

We understand how being delayed is very frustrating for hauliers. Our officials are talking daily to hauliers and drivers on the ground, and sometimes on an hourly basis. It is particularly frustrating for hauliers who are dependent on either the importer, the exporter or their agent to fix shortcomings in documentation before the goods can be cleared and moved from the port. In many of these cases as far as the haulier is concerned they have been stopped by customs systems. We are actively working on how we can give the haulier greater visibility on what is causing the delayed movement on the ground.

I am aware of a view among some businesses that Revenue should set aside full compliance with the Union customs code, UCC, in part or in whole for a period of time while trade and business get to grips with the requirements. This would carry with it serious consequences for the view taken by other member states of exports from Ireland and their automatic right to free circulation within the European Union. Such an approach would be highly detrimental to Irish trade and business and to the Irish economy in general.

I am very happy to address any questions or concerns the committee may have. However, I need to refer to the provisions of section 851A of the Taxes Consolidation Act and our duty of confidentiality in respect of any individual taxpayer. Subject to that I will be very happy to address members' concerns and questions.