Over the next few weeks and months we will be updating our clients and partners on the shape of the UK Customs landscape post BREXIT, but as you may already be aware, matters have still not been finalised with the EU and there is still a long way to go.
The UK has until 30th March 2019 to complete BREXIT, albeit there may be a further transition period following this date. From the industry press releases we are currently receiving, it is suggest that the UK should be preparing for a ‘Hard BREXIT’
So, what is Hard BREXIT?
A hard BREXIT arrangement could see the UK give up full access to the single market and full access of the customs union, along with the EU. The arrangement would prioritise giving Britain full control over its borders, making new trade deals and applying laws within its own territory. Initially, this would likely mean the UK falling back on World Trade Organisation (WTO) rules for trade with its former partners, both inside and out of the EU.
On 23rd August, 2018, the Government issued a series of notices aimed at preparing businesses in the event of a ‘No Deal’ scenario. Under the heading of ‘Exporting and Importing’, the Government states that businesses should consider “whether they should engage the services of a customs broker, freight forwarder or logistics provider to help.”
Having Authorised Economic Operator (AEO) status with our group, Delamode are well placed to assist exporters and importers in this field, and will ensure that all statutory requirements are in place as soon as these requirements are identified. The Group’s BREXIT Committee is working tirelessly to ensure all possible scenarios are examined and implemented to ensure the smoothest of transitions for its client base. For more information on the Government ‘No Deal’ press releases please visit: https://www.gov.uk/government/publications/trading-with-the-eu-if-theres-no-brexit-deal
What are the pros and cons?
During a recent speech in Geneva the International Trade Secretary, Liam Fox said a hard approach would benefit the UK by making it a global trading nation, adding that "the UK is a full and founding member of the WTO".
German business leaders have expressed a similar view. Markus Kerber of the German BDI group recently remarked: "It's better to have a hard Brexit that works than to have a fudge in the middle that has to be renegotiated or doesn't politically work and you have uncertainty lingering on."
A hard Brexit, however, could see British goods and services subjected to new tariffs resulting in a significant increase in systematic checks on goods passing through ports and airports, both inbound and outbound, these checks and clearances adding further costs to the transaction.
Should we eventually become detached from the EU, the Single Market and the Customs Union, the UK will introduce its own laws and regulations. UK law makers are already drafting a UK version of the Union Customs Code. The Union Customs Code (31.05.16) sets out the role of the AEO (Authorised Economic Operator), the benefits of which include customs simplifications, fewer physical and document checks at borders and a more efficient transit through borders. We can assume quite confidently, that the AEO programme will remain at the heart of any new UK Customs regulations and accordingly, Delamode, due to AEO Customs and Security status' available within the group we are well positioned to pass on all the benefits to our customers and partners.
Delamode has tried not to engage in the Brexit speculation, or side with political opinion. We have limited ourselves to the occasional noting of facts and events on our website based on information being fed to our industry by our governing body (BIFA) and other industry sources. We will compile our next news item on BREXIT when something really concrete is agreed, or, as we get closer to a deal (or no deal). As soon as options and issues do become clearer, we will do our best to communicate the relevant parts of BREXIT to you. This will then enable you to prepare and implement your own procedures ensuring that you meet your statutory requirements under the terms of BREXIT.
The UK Select Committee on Brexit Customs Arrangements recently hinted at further advantages for AEO “Trusted Traders”, and also that they thought UK Customs Agents and Freight Forwarders such as Delamode would play a much expanded role for its customers and business partners post BREXIT.