German MPs demand compensation for UK customs cash-in

At the Bundestag, German MPs don't want to lose out on customs revenues that London will collect post Brexit | John MacDougall/AFP via Getty Images

German MPs demand compensation for UK customs cash-in

New Brexit agreement would see London keep duties it levies on goods entering the EU.

BERLIN — Leading German MPs are demanding that the U.K. compensate the EU for customs revenues that London will collect for goods entering the single market under Boris Johnson’s Brexit deal, and say the German government is backing their request.

Under the revised Brexit deal backed by British MPs late Tuesday, Northern Ireland would formally remain in the U.K.’s customs territory while also following EU customs rules. British customs authorities would check goods going into Northern Ireland from the U.K. mainland and could collect customs duties if those goods are at “risk” of subsequently entering the EU market.

Even though those duties are charged on goods entering the EU market, Brussels agreed the revenues would remain in the British budget: “Customs duties levied by the United Kingdom … are not remitted to the Union,” the protocol on Ireland and Northern Ireland says.

Berlin, however, believes this is not the final word on the issue, according to Gunther Krichbaum, a senior lawmaker from Angela Merkel’s Christian Democratic Union (CDU) and chair of the Bundestag’s committee for European affairs.

“Of course, we have to see that we can retroactively find an appropriate compensation,” he said in an interview, adding: “This view is also shared by the federal government.”

Michael Link, the liberal FDP party’s EU spokesperson, said it would be “quite strange” if the U.K. was allowed to keep customs duties it levied on goods crossing the Irish Sea and entering the EU market.

The German government on Monday briefed selected lawmakers on the Brexit deal and said that it would push for a compensation, according to another person, who was present at the meeting.

A spokesperson for the German ministry of foreign affairs said Berlin “of course stands by the decision” of EU leaders to back the Brexit deal agreed with the U.K. prime minister, but did not comment on whether Germany would seek to obtain retroactive compensation.

However, a European Commission official said the arrangement was “a logical consequence of Northern Ireland remaining in the UK’s customs territory,” and that Brussels had no plans to arrange compensation.

The decision to allow Britain to keep the customs duties comes at a sensitive moment for the EU finances, as leaders debate the next seven-year budget cycle and grapple with how to fill the hole left by the departure of the U.K., which is a major net contributor.

Berlin could seek to make compensatory payments a precondition for granting the U.K. market access under a planned future trade deal with the EU. Such a trade deal would see both sides lowering their tariff barriers, but the EU market is much bigger, giving it more leverage in the talks.

Franziska Brantner, a German MP and the Green party’s spokesperson for European affairs, also backed the call for reimbursement, and suggested Berlin could request compensation through the fees the U.K. would have to pay to remain in certain EU programs. That could include its membership of Eurodac, the fingerprint database for asylum seekers, she said.

Hans von der Burchard 

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