Northern Ireland could become a Wild West-style smugglers’ paradise under the Government’s no-deal Brexit plans, hauliers have warned.
Seamus Leheny of the Freight Transport Association held confidential talks with civil servants ahead of Wednesday’s official announcement.
Irish goods entering the Northern Ireland market will not face tariffs if the UK leaves without an agreement.
Irish products entering the rest of the UK would face high tariffs on a range of food products.
In essence we are looking at an honesty box on the borderSeamus Leheny
Mr Leheny said: “Northern Ireland could become a smuggling channel to avoid tariffs. In essence we are looking at an honesty box on the border.”
The Northern Ireland policy manager at the FTA addressed a conference for businesses held near the Irish border in Co Louth.
He recognised that UK officials were adamant they had no appetite for regulatory controls on the border.
But he concluded: “You create this place almost like the Wild West, you become that neighbour from hell, both for the EU and Great Britain.”
The No Deal plan for NI is shambolic & as I've said before, in a No Deal scenario NI will be biggest loser— Seamus Leheny (@Freight_NI) March 13, 2019
* no tariffs on ROI/EU goods entering NI across border
* tariffs applicable on goods entering GB via Dover, Holyhead etc
* NI therefore treated differently #Brexit
Mr Leheny added: “It is an avenue to get goods into Great Britain avoiding checks or tariffs.”
Transport companies strongly oppose any extra red tape which could delay the free flow of goods across the currently invisible Irish border.
Mr Leheny expressed alarm about the Government’s proposed way of ensuring that continues after any hard Brexit.
He said: “It is something that would be severely detrimental to Northern Ireland, that would disadvantage us, both with businesses in the Republic of Ireland but also more severely with businesses in Great Britain as well.
“There would be no tariffs, no regulatory controls on goods entering Northern Ireland.
“So for a company based in Northern Ireland, they will face competition from goods coming into Northern Ireland that are not paying any tariffs.”
For similar company based in England or Scotland, imports coming in from the Republic of Ireland or the EU would be subject to tariffs.
That means they would not face the same competition as their counterparts from Northern Ireland, Mr Leheny added.
“So it gives them that competitive advantage. Also it is a system that could be open for abuse as well.”
A company owner based in the EU who wanted to avoid tariffs could ship goods into Northern Ireland and sell them there, avoiding UK tariffs.
Mr Leheny added it would be a system “open to abuse”.
“Most companies would like to abide by rules and good business practice with that, but if you are an agri-food business based, for example, in the Republic of Ireland or the Netherlands, and you are facing tariffs of up to 50%, you are going to face those tariffs as soon as your goods arrive into Dover or Holyhead or Felixstowe.
“But they will be looking at this situation with Northern Ireland and will say, hold on a minute, we can get our goods into Northern Ireland, maybe sell them to an intermediary, an agent based in Northern Ireland tariff-free, and from Northern Ireland those goods can be dispersed anywhere within the UK avoiding any tariffs.”