Brexit contingency planning

The UK Government is continuing to contingency plan for No Deal Brexit, but have you ever wondered what this really means to your supply chain? Here’s a brief summary to help shape your thoughts.

Withdrawal from the Customs Union

Withdrawal brings an end to the free movement of goods between the UK and EU member states. In practical terms this has several implications for importing and exporting companies:

  • Customs Declarations would be required to move goods between UK and EU member states
  • Tariffs become payable on imports
  • EU exporters would need to register for an EORI number
  • Product labeling may need to change
  • Rules of origin would change
  • Licences may need renewing
  • Contracts may need updating

More widely, UK access to the EU Free Trade Agreement with non-EU countries will also cease. This also affects exports to the rest of the world and in the absence of new trade agreements between the UK and these countries it is expected that WTO MFN Tariffs would come into effect.

With the additional administration and workload for customs staff, we may also experience delays to goods clearance, at least in the short term.

Preparation for UK Importers/Exporters

There are some low cost preparations that businesses can explore in advance of withdrawal and in readiness for a potential No Deal:

  • Financially plan for the additional cost of Tariffs and the cost of Customs Declarations
  • Register as an Authorised Economic Operator
  • Evaluate the most suitable Customs Freight Simplified Procedures
  • Check that your existing courier or freight forwarder is equipped to perform customs declarations on your behalf

The UK Government continues to state that the preferred solution would be to form a new trade agreement with EU. There are precedents of such arrangements, for example between the EU and countries such as Turkey, Norway and Canada. However, as the hard stop October date looms nearer, the prudent approach for UK importers/exporters is to hope for a new trade agreement, but to contingency plan for No Deal.