C.J. Flynn to William T. Cosgrave
(Copy)

The President,

CUSTOMS FRONTIER.

1.Article 74 of the Constitution provides that during the present financial year all taxes and duties shall continue to be assessed, levied and collected in like manner as immediately before the Constitution.

2.The effect of this provision is that all Customs and Excise duties in Great Britain and Ireland are at present collected on a common basis leaving the Free State Revenues from these sources to be worked out on an agreed basis of attribution. The whole of Great Britain and Ireland remains the fiscal unit and dutiable goods may be moved between places in the two Countries without any Revenue restraint or formality.

3.At the end of the financial year (i.e. on 31st March) the above arrangements cease and the Irish Free State becomes an independent fiscal unit (unless any legislative provisions in the contrary sense are made in the meantime). All goods coming from Great Britain and Northern Ireland will become subject to the same Customs formalities as goods from Foreign Countries and Customs duty will be payable on all dutiable goods entering the Free State from whatever destination.

4.For this purpose it will be necessary to surround the Free State with a com­plete Customs ring. So far as the sea-frontier is concerned this does not present any great difficulties as Customs Staffs are at present located at all the main ports, and it will only be a question of strengthening these staffs and perhaps stationing staff at points where staff is not employed now. The land frontier (i.e. the boundary between Northern Ireland and the Free State) is at present quite open and the object of the present note is to point out the necessity of taking immediate steps to prepare the necessary machinery to constitute the Customs barrier between the Free State and the North on the 1st April next, if necessary.

5.Article 13 of the Adaptation of Enactments Act 1922 empowers the Minister of Finance to make regulations to adapt the Customs Acts to a land frontier, but before such regulations can be definitely drafted it will be necessary to make extensive enquiries as to the character of goods traffic and the main arteries of such traffic across the border, to consult traders and carriers, and possibly to discuss certain phases of the question with British Customs representatives. It will also be necessary to give a fair notice of the impending changes to Merchants and others in the Free State with full instructions as to the Customs procedure that will have to be followed.

6.Assuming that it is the intention that the Free State should stand on its own fiscal legs from 1st April next it is of the utmost importance that a tentative scheme for the provision of a Customs frontier organisation should be com­pleted at the earliest possible date and I suggest that I be authorised to take the necessary steps for the preparation of a scheme to be submitted for approval in due course.