Mr. Neil McDonnell:

I thank the Chairman and members. ISME is grateful for this opportunity to address the committee.

Following the Brexit referendum result in 2016, a great deal of focus was placed on our export sector, particularly food exports to the UK. In terms of Ireland’s overall trade balances, this was inappropriate. While Ireland had an overall trade surplus of €75 billion in 2020,we had a trade deficit with the UK of €5.4 billion. The SME sector is disproportionately dependent on those exports. The CSO table provided shows that 67% of UK imports are accounted for by Irish SMEs. These imports do not simply materialise in our warehouses, factories and shops. They are imported by professionals like Roche Freight. Since 1 January, the landscape for importers from the UK has been profoundly altered by Brexit. While we appreciate that professionals in our Revenue and customs services are working hard to minimise disruption, this is not happening quickly enough. I have included in my submission to the committee correspondence between Roche Freight and Revenue in Rosslare which illustrates the complexity of the issues that will shortly result in significant reductions in stocks to which the domestic Irish economy has become accustomed over long decades.

In order to mitigate the costs being imposed on freight across the Irish Sea post Brexit, we need to address a number of matters, the first of which is the issue of movement reference numbers, MRNs, before Revenue debits VAT and duties from the importer. Revenue is debiting VAT and duties due by the importer 30 minutes before port arrival. In cases where the importer has multiple inbound shipments, Revenue may make a deduction which means the importer has insufficient funds to clear a shipment which is 30 minutes from port. The importer can transfer funds during working hours via the Revenue online service, ROS, but outside working hours, this can hold up other shipments. Revenue’s offered solution to this issue is not practicable at present.

The second matter we need to address is that of co-loaded shipments, that is, those with goods for both Northern Ireland and the Republic. Such loads have been a feature of UK-Ireland trade for three decades. These have been effectively stopped by Brexit, with significant implications for shipping costs. We understood that Northern Irish businesses were to be given special numbers to facilitate this but it has not happened. The stopgap fix by the Northern Ireland Government using the trader support service is too cumbersome.

The third matter we need to address relates to movements of goods from UK to Ireland which require Department of Agriculture, Food and the Marine notification. Such goods need better co-ordination with the customs and Revenue authorities. We have had the example of a shipment cleared by customs and delivered to Dublin which was subsequently recalled by the Department. This cannot happen.

We also need to address the issue relating to rules of origin, which is causing severe problem for Irish importers purchasing EU goods from UK distributors. Those Irish importers can never order from EU countries in the quantities that many UK distributors can.

Those are the four issues to which I draw the attention of the committee. My colleague, Mr. Roche, managing director of Roche Freight Ireland, will be happy to explain the necessity of these reforms and the background to them during the question-and-answer session.