James Browne (Wexford, Fianna Fail)
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117. To ask the Minister for Finance if his Department has conducted an economic analysis of the impact of potential customs checks at border points following Brexit; and if he will make a statement on the matter. [37188/17]

James Browne (Wexford, Fianna Fail)
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118. To ask the Minister for Finance if the Revenue Commissioners anticipate increased levels of customs checks and enforcement following Brexit; and if he will make a statement on the matter. [37189/17]

Joan Burton (Dublin West, Labour)
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160. To ask the Minister for Finance if there are investigations being conducted by the Revenue Commissioners or his Department regarding the possible erection of customs posts between Ireland and the United Kingdom in the event of a so-called hard Brexit in March 2019; and if he will make a statement on the matter. [38033/17]

Stephen Donnelly (Wicklow, Fianna Fail)
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214. To ask the Minister for Finance if his Department has conducted an assessment of the additional number of customs officials that may be required in the event of the UK leaving the customs union; and if he will make a statement on the matter. [38657/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 117, 118, 160 and 214 together.

The Government’s position in relation to the border with Northern Ireland in the context of Brexit is very clear.  Continued freedom of movement, absence of a ‘hard’ border, and protection of the Good Friday Agreement are key objectives for the Irish Government. The arrangements that will apply after Brexit will depend on the outcome of negotiations between the EU and UK.  The Government is clear that any manifestation of a hard border would have very negative consequences.  A key priority is to ensure the continued free flow of trade on the island and the need to avoid a hard border. Clearly in this regard the closer the trading relationship between the UK and EU the better.

The European Council Guidelines that set out the EU’s position for the Article 50 negotiations state clearly that, in view of the unique circumstances on the island of Ireland, flexible and imaginative solutions will be required, including with the aim of avoiding a hard border. It is not helpful to pre-empt any particular outcome at this early stage of the process. Both the Government and the EU Taskforce have welcomed the indications that EU and UK objectives on the Irish issues are converging but have also stressed that the UK needs to back this up with tangible commitments that can pave the way for practical solutions.

My Department has been preparing for the impact of Brexit since well before the referendum on 23 June 2016, with this work now intensified. The primary areas for the Department of Finance relate to the economic and financial sector implications stemming from Brexit. This work is being undertaken within the whole-of-Government framework established by the Department of the Taoiseach.  In relation to ongoing analysis of the impact of Brexit, my Department sponsors a joint research programme between the Department of Finance, Revenue and the Economic & Social Research Institute (ESRI) on The Macro-economy and Taxation. This programme began in January 2015 and continues through 2016 and 2017. Its objective is to undertake research on a range of macro-economic and taxation issues in Ireland, this has included a number papers published on different aspects of Brexit (available on the ESRI website www.esri.ie). 

Like all Government agencies, the Revenue Commissioners are actively engaged in examining a range of scenarios in order to support Ireland's objectives.  Until the shape of post-Brexit arrangements becomes clear, it will not be possible to formulate specific plans.  The precise arrangements that will apply after Brexit will depend on the outcome of negotiations between the EU and UK.  I am therefore informed by Revenue that at this juncture it is not possible to assess what additional resources would be required if the UK left the customs union.  For this reason Revenue’s focus to date has centred on upgrading their IT systems in order to have the most advanced systems possible and to maximise the simplifications provided for within the Union Customs Code. I can also confirm that no investigation or planning is being undertaken by my Department or by Revenue in relation to the creation of new customs posts. 

The total volume of trade subject to customs checks will increase significantly in the event that customs processes become necessary after Brexit.  It is not possible to accurately predict the level of volume increase until the detail of the future EU-UK relationship is known. At present, customs checking mainly consists of verification of documents and examination of records. The number of physical checks of goods is small; less than 2% of all import consignments were physically examined in 2016.  The majority of checks are carried out in approved warehouses and other premises with a very small number at a port or airport.  The low level of checks is the result of pre-authorisation of traders, advance lodgement of declarations and an extensive system of post-clearance checks, including customs audit, which are carried out at traders' premises.

As previously stated, the nature of the future trading relationship between the EU/Ireland and the UK, and consequent customs arrangements, will be determined by the outcome of the Article 50 negotiations which cannot be prejudged.