Be Prepared For Brexit

The UK left the EU at the end of 2019 and will be exiting the transition period on 31.12.2020. From a customs perspective, the UK will be outside the EU Customs Union and Single Market. As such, we know:

  • The UK will have its own customs regulations and customs tariff (already published)
  • Imports from the EU will be treated the same as the Rest of the World movements and so subject to: a) Customs regulation b) Customs declarations and c) Customs duties (also known as tariffs), determined on the basis of classification origin and customs value
  • Movements to the EU will be regarded as exports, again requiring customs declarations and potential tariffs in the EU

The key remaining unknown is whether there will be a Free Trade Agreement (FTA) to enable goods that meet specific origin list rules to be shipped between the EU and UK free of duty. If agreement is reached then this is likely to be last minute, leaving businesses to urgently determine whether goods meet the origin list rules and how to provide evidence and certification of this.

Time is short and businesses have a lot to do, including:

  1. Modelling the customs impact of Brexit (customs duty costs, customs declaration costs etc.)
  2. Working with customers and suppliers to determine who will take on responsibility for exports, imports, customs costs and compliance
  3. Implement mitigation planning to reduce customs costs
  4. Highlight and address the barriers to movements
  5. Ensure they hold the necessary authorisations (EORI, Fiscal representation etc.)
  6. Engage customs brokers, freight forwarders or other parties to make the necessary customs declarations and determine documentation, data flows and processes to controls this (this area is subject to audit based control)
  7. Determine the necessary customs elements (classifications, origins, valuation adjustments etc.) required by the customs declarations

Failures to address these issues could have significant impact on your businesses, including:

  • Supply chain delays
  • Additional duty demands or you or your customers
  • Customs penalties
  • Reputational damage

We would encourage businesses that are struggling to address the above action points to engage help. We are including contact details for Barbourne Brook, a business we know well, who can assist with these matters.