Brexit – Latest status

Brexit – latest status

The UK formally left the EU in January and on the 1^st January 2021 the transition period which effectively maintained the status quo from a customs and trade perspective comes to an end.

From January 2021:

• Shipments between the UK and the EU will become third country shipments requiring customs formalities for all imports, exports and transit shipments.
• Special rules will apply to Northern Ireland which will allow free movement of product north and south on the island of Ireland but there will be some formalities required for shipments between Northern Ireland and the rest of the UK.
• The UK will lose the benefit of the existing free trade agreements between the EU and the rest of the world, but it is free to independently negotiate its own trade agreements.
• UK and EU materials will no longer be considered as a common origin which may impact final product origin for trade purposes
• In the absence of a UK – EU free trade agreement, shipments between these territories will be the subject of WTO tariffs and quotas. Progress on such an agreement has been stalled for some months and if an agreement is reached, it is expected to be more limited in scope than the original ambition.

Many companies have already conducted extensive preparations for the customs formalities associated with Brexit.   For those that find themselves less prepared we would suggest the following minimum actions:

• Ensure that your company is registered to trade with the relevant customs authorities
• Engage with suppliers, customers and logistics providers on the impact to shipments post 1^st January 2021 and ensure that there is clarity on:
  • Which company will act as importer and exporter of record?
  • The incoterms in place for trade which will define the responsibilities of the buyer and seller in each transaction
  • Who will prepare the necessary customs paperwork and the costs associated with this administration?
  • The source of information around tariff codes, origin and valuation that will be required for customs paperwork
  • Potential to buffer for delays once the transition period comes to an end
• Train key supply chain, logistics and finance personnel on customs matters, company and individual responsibilities.
  • We have developed a variety of courses that can be delivered online including a Brexit essentials series that can be tailored to your individual company needs
• Explore potential exposure to tariffs and consider whether the application of special customs procedures could be of benefit to mitigate against the expected changes.