The UK also wants the freedom to strike new trade deals with other countries such as Australia during the transition phase - deals which would come into effect once the transition is over. It then fleshed out two potential options for a long-term deal.
"[Ministers] might promise frictionless trade, but they are offering a red tape bombshell for British business", said Labour MP and Vote Leave Watch chairman, Chuka Umunna.
"However, this is a complex issue, including safety checks as well as customs paperwork and we need to develop a system that avoids disruption at our ports", she said.
Ms Sturgeon elaborated on her initial comments made on Twitter ahead of a public meeting in Montrose, telling the BBC: "You've got the United Kingdom government appearing to say that they don't want to stay in "the" customs union, but they want to stay in "a" customs union, which would be pretty much identical to the European customs union that we're in already". According to one of the first official Brexit papers, published on Tuesday 15 August, transition and a "softly-softly" approach will be employed during negotiations.
However, the government still concedes that this option would still involve an "increase in administration".
Josh Hardie, deputy director general of the Confederation of British Industry, said businesses "need to see much more detail from these papers".
"A highly streamlined customs arrangement", is one option the British government seems more eager to propose to European Union negotiators.
The UK has set out the "ambitious new customs arrangement" it wants to secure with the European Union after Brexit.
The UK Government has begun producing a serious of papers outlining its post-Brexit vision for relations between the UK and the European Union.
Since the 1998 Good Friday peace accord, British military checkpoints along the Ireland-Northern Ireland border have been dismantled, rendering it all but invisible.
Brexit will not mean "a return to the border posts of the past" between the Republic of Ireland and Northern Ireland, the government has insisted.
Davis declined to say by when the exact payment would be set.
Another aspect of the proposal which is of particular value and importance to merchants in the UK and Ireland is complete clarity that the UK wants a tariff free and fluid movement of people and goods across the only UK land border.
After this period is over, the government is proposing two alternate models for a future relationship: a streamlined customs arrangement or a new customs partnership.
BILL: A Customs Bill will be brought forward in autumn to ensure a new regime is in place by the exit date.
Meanwhile Mr Davis's former aide has launched a scathing attack on his former boss.
Safeguards would need to be implemented to prevent Britain becoming a backdoor for exporting to the union. The Brexit negotiations between London and Brussels, which started on June 19, are expected to conclude by the end of March 2019.
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