Brexit - opportunities beyond the bluster
As discussions around the potential future relationship between the UK and the EU enter a critical stage, we have also inevitably reached peak political positioning and bluster.
The rhetoric surrounding the future state negotiations has been dialled up and the publication of ‘reasonable worst-case scenarios’ in the UK prepares the groundwork to shift blame to individual companies lack of preparation if we end up with queues of up to 7,000 trucks trying to access the port of Dover. This again raises the potential for delays to critical supply chains, at least in the weeks following the transition period.
We already know that customs paperwork will be required from the 1st January 2021 and we outlined a number of actions that companies should be taking now in our August newsletter and these remain valid ahead of the end of the customs transition period.
Regardless of the political outcomes, there are a number of customs simplifications that companies can consider that may ease some of the compliance burden and costs.
- Authorised Economic Operator (AEO)
- Two forms of AEO – customs and safety and security
- Customs authorities place increased reliance on customs and security procedures for known traders – after application and audit process
- Fewer physical and document related checks
- Easier access to customs simplifications
- Priority treatment if selected for control
- Possibility to request place of control
- Mutual recognition of AEO status with third countries (CTPAT (US) and others)
2. Authorised consignor / consignee
- Regular shippers / receivers registered with customs
- Start (consignor) or end (consignee) customs movement at own premises
- Declare goods without presenting them at customs office
- Electronic authorisation to load / unload from customs
3. Comprehensive customs guarantee
- Defer customs duty and VAT payments from point of import
- Cover customs duty and VAT on transit shipments
- Requires financial guarantee to cover expected throughput
- Guarantee can be reduced for AEO certified companies
4. Customs warehousing
- Store goods in an authorised location without being subject to duties
- Cashflow benefit – duty payable only when goods released into free circulation
Duty avoidance – no duty payable if goods re-exported
5. Inward processing
- Products imported for further processing, manufacturing or repair
- No duty or VAT at the point of import – only due if subsequently released within the customs territory
- Goods tracked and discharged within a specific timeframe
6. Outward processing
- Products temporarily exported for processing or repair outside the customs territory
- Claim full or partial relief from import charges when these goods are re-imported
7. Temporary admission
- Temporarily import goods free from Customs Duties and VAT
- Must not alter the products and must be identifiable on re-export
- Defined timeframe for re-export of goods
Key to getting the benefit from these simplifications starts with an understanding of the customs opportunities in conjunction with the supply chain flows within your business – not just in relation to Brexit. Our team is well positioned to discuss and advise on these matters.
Read more on Brexit planning