Finance

Theresa May’s Brexit customs plans could be illegal


LONDON — Theresa May has been privately warned by her own Brexit Secretary that her plans for new customs relations with the European Union after Brexit may be illegal.

David Davis has reportedly written to the prime minister warning that her plans for a “customs partnership” with the EU, in which Britain would collect EU customs union tariffs and track goods on Brussel’s behalf, could be blocked under international trade law, forcing the UK to remain in the EU customs union.

Under the prime minister’s plans, goods destined for the EU would be tracked once they arrive in the UK to establish whether they are eligible for rebates from EU-wide tariffs.

However, Davis is concerned that the UK would be hit by World Trade Organisation anti-discrimination laws which state that “imported and locally produced goods should be treated equally after the foreign goods have entered the market.”

He is supported by other Brexit-supporting members of May’s Cabinet, who have warned her that her plans may be struck down in international courts.

“In that scenario, you’d end up staying in the customs union because you’d have no other choice,” one senior government source told the Times.

Senior government figures also believe that the alternative “maximum facilitation” proposal being backed by Davis may also run into legal problems. As a result, May’s government is urgently examining the legality of both proposals.

“There are potential legal problems with both plans as they stand,” a senior government source told the Times. “The attorney-general has been asked to provide an assessment that will then be fed into the cabinet discussions.

The so-called “max-fac” option would require some form of new border checks with the EU, which its backers insist would be made as “frictionless as possible” through the use of as yet undefined technologies.

The prime minister is reportedly concerned that any new border checks on the border between Northern Ireland would be the subject of terrorist attacks from Republican dissidents.

An alternative “third way” in which the whole of the UK remains within the customs union while new arrangements are created is also reportedly being considered by the government.

A senior government source told Business Insider that senior members of the cabinet would continue to meet “regularly over the coming days” to decide upon its preferred option for post-customs relations with the EU after Brexit.

The lengthy process has bewildered EU officials who have previously dismissed both options being considered by May’s government as “magical thinking”.

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