UK To Launch Freeports To Boost Trade, Simplify Customs Procedures

Trade & Policy

UK To Launch Freeports To Boost Trade, Simplify Customs Procedures

The UK government had announced last year that up to ten Freeports will be opened across the UK, in an attempt to create thousands of jobs, attracting new businesses and investment. It was reported on 4 February 2021 that at least 30 ports and airports across the UK were considering making bids for the ten Freeports. The first Freeports are said to be on track to open for business by the end of 2021. Freeports will benefit from a package of tax reliefs to help drive jobs, growth and investment, as well as simplified customs procedures and duty suspensions of goods. Freeport bidding parties were required to submit their proposals to the Ministry of Housing, Communities and Local Government by noon on 5 February 2021. The bidding proposals are to be assessed with a view to determining the winners by Spring 2021. Successful bidders will then be granted some seed funding to support governance set up costs and will work with the government to develop detailed business cases for their spending plans associated with the regeneration funding offered to Freeports. At the centre of the new Freeports policy is what is proclaimed as an ambitious new customs model, drawing on international best practice. The flexible model will improve upon both the UK's existing customs arrangements and the Freeports the UK had previously in place (until 2012). The government claims that a company can import goods into a Freeport without paying tariffs, process them into a final good and then either pay a tariff on goods sold into the domestic market, or export the final goods without paying UK tariffs. In addition, businesses operating in Freeports will be authorised to use simplified import procedures. This model will expand on existing customs facilitations and procedures available to business. The operator of the customs site will be responsible for ensuring goods on site follow the correct customs processes.