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Brexit – Expect Cross-Border Trade To Be Impacted

Baskar Sundaram
Baskar Sundaram
Brexit

06th Sep 2019

Businesses bracing for a no-deal Brexit with support from HMG

As part of a withdrawal agreement, the EU expects Britain to pay between 40 to 45 billion Euros, if it wants to leave the union amicably and continue its trade ties smoothly with the rest of the bloc. Brexit supporters feel that the sums are too high and bring no guarantees to the future relationship. EU on the other hand concludes that the payout is only against settlement of the bill for commitments undertaken. Commitments such as the Galileo program, the Global Navigation Satellite System (GNSS) that is being built by the European Union (EU). Amongst the various chapters that could possibly unfold in the Brexit story there is one most dreaded – ‘no-deal’. It is the possibility of UK completely shunning the EU and leaving the union without any sort of withdrawal agreement in place. No payouts.

Deal or no-deal, Brexit is set to happen on 31 October; although there is a distinct possibility that the date for Brexit could be moved further to 31 January 2020.

In the event that the UK leaves the EU without finalising a deal, businesses importing and exporting goods with the EU will have to comply with a new set of rules and regulations. Her Majesty’s Revenue and Customs (HMRC) department is assisting businesses in understanding these new rules and the course of action that should be adopted to take to ensure compliance and continuity in case of no-deal exit.

Customs declarations will be required on UK EU trade in the event of no-deal. HMRC is trying to ensure that businesses are capable to make customs declarations at the earliest. Businesses can also weigh options such as appointing an intermediary or using specific software; however having an EORI number is essential and so is the understanding of the Common Transit Convention (CTC)

Economic Operator Registration Identification (EORI) number

All businesses require an EORI number to interact with UK Customs systems. It applies to both – importing goods into the UK or exporting them from the UK. Businesses that also act as importer into or exporter from EU will require an EU EORI number. For an EU EORI number businesses should contact the EU country where they make their first declaration. For a UK EORI number, refer to GOV.UK

Common Transit Convention (CTC)

Currently, the custom systems in EU are subject to CTC which allows the movement of goods under duty suspense between the 28 member states and other associated partner countries. Once it leaves, UK would have the option to accede to the CTC as a separate contracting party. The requirements to use CTC will remain unaffected; however, traders will need to have a Transit Accompanying Document (TAD) scanned at the point of entry into the UK.

Although nothing is set in stone yet and Britain is bracing itself for all eventualities, it is advisable that business organizations also prepare themselves for all outcomes.

 

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