As British Prime Minister Theresa May continued her mission in Austria Thursday to promote her blueprint for a future trading relationship after Britain leaves the European Union (EU), a committee of Westminster politicians issued a stark warning.
The British parliament's EU External Affairs Sub-Committee published a report Thursday on the May's so-called Chequers proposal for a Facilitated Customs Arrangement (FCA) and the customs challenges under "no deal".
The report found that under the suggested FCA, British importers would face an administration cost of more than 923 million U.S. dollars a year.
The report said the FCA proposals raise a number of significant questions that need to be resolved for it to be workable and acceptable to Brussels.
In its report the committee said May's government has not yet made clear how goods under the FCA could be reliably tracked and who would carry liability for keeping EU and UK-destined goods separate.
"The UK's proposal to collect revenue on behalf of the EU makes agreement difficult as the EU's chief Brexit negotiator has stressed that the EU will not delegate duty collection to a non-Member State," it added.
It said the FCA's repayment mechanism is untested and will take several years to be developed and implemented.
"In the case of 'no deal', trading with the EU under WTO rules would be disruptive and costly. Up to 245,000 businesses currently trade exclusively with the EU and would have to gain expertise in complex customs procedures, which they do not yet have," the report warned.
It added that checks to customs paperwork and time-consuming regulatory checks on some goods would cause delays at roll-on/roll-off ports and disrupt highly integrated supply chains.
The British government's position that, in the event of 'no deal', customs checks of EU goods could be unilaterally suspended to keep goods moving, may be in breach of WTO rules, added the report.
Baroness Verma, chair of the EU External Affairs Sub-Committee, said: "The government must, as a matter of urgency, provide answers to questions on the Facilitated Customs Arrangement, such as how goods would be tracked, how revenue would be collected and how the repayment mechanism would work.
"A 'no deal' Brexit will cause disruption -- mitigation options are limited and no technology currently exists, which would eliminate border checks completely. Even if the UK waived customs checks on goods arriving from the EU, the EU has said that it will not reciprocate."
