Importing and exporting preparations in the event of a no-deal Brexit
BEIS and HMRC recently hosted a webinar (11th April) highlighting importing and exporting preparations businesses should take in the event of a no-deal Brexit. A summary of the webinar is provided as follows.
The event was hosted by Richard Murphy, Business Intelligence and Readiness Directorate (BEIS) and supported by Philip Bower of HMRC and Alex Kay of the BEIS Consumer Goods team.
Where we are now –
UK & EU 27 agreed to a flexible extension of art. 50 period for 6 months to 31st October meaning that there is no “immediate” risk of no-deal. If the withdrawal agreement is ratified by both parties before 31st October, extension will be terminated and exit would take place on the first day of the following month. During this period the UK would continue to be a full member of the EU with all rights and obligations.
Importing and exporting in the event of no-deal
As per previous communications, should the UK leave the EU without a deal, it would fall under the current import / export rules for third countries and HMRC is aiming to replicate as closely as possible existing rules & procedures for trade with third countries to apply to movements of goods to & from the EEA.
Currently, the majority of consumer goods are subject to freedom of movement and do not require import / export declarations nor are they subject to import duties. However, should the UK leave without a deal this would be subject to change from exit day 1.
All UK Ports and airports would be affected by the new customs regime, with the biggest impact being to those who deal mainly with EU trade such as “roll on, roll off” (RoRo) ports (vehicle ferries, channel tunnel etc.), however to make this easier HMRC implemented a series of easements including transitional simplified procedures (TSP’s) for goods imported into the UK from the EEA.
TSP’s are simplified measures HMRC has put in place to make importing as easy as possible and enable both the transport of goods from the EEA into the UK without the immediate need for a full customs declaration in advance of goods arriving and the postponement of import duties and VAT. These easements are key to giving businesses further time to prepare for transition to the new customs processes.
The latest information is that following feedback from stakeholders, TSP’s has recently be widened (from RoRo ports only) to include goods imported through all airports and ports. This situation will be reviewed over the next 3-6 months to assess operation and businesses will be consulted prior to with at least 12 months notice of any changes. As of 11th April it was estimated that TSP’s would be available until at least 30th September 2020.
To benefit from TSP’s companies must register for this and set up a duty deferment account (effectively a form of direct debit).
In future, and in the event of a no-deal scenario, full customs declarations will be required for goods moving between UK & EU and businesses should consider how to comply with these new requirement such as:
- Appoint a customs agent if in any way unsure about how to make a customs declaration; or
- Buy specific software to enable declarations to be made; or
- Use an end to end service, incorporating provision of customs declarations.
In all cases, companies currently trading or intending to trade with the EEA will require an Economic Operators Registration and Identification number (EORI) to continue to do so. Companies already trading with countries outside of the EEA would already have an EORI number and as such would not need to register again.
Entry Summary Declarations (Safety & Security declarations)
A new requirement in the event that the UK leaves the EU without a deal, declarations were due to be introduced for goods moving from the EEA to the UK. The government has recently announced that importers would not need to submit Entry Summary Declarations for goods arriving from the EEA for a period of 6 months from the date the UK leaves the EU. The rationale for this is that they are not currently required for movement of goods between the EEA & UK and the associated risks would not immediately change.
Entry Summary Declarations are still currently required for goods arriving from ROW.
Common Transit Convention (CTC)
CTS enables movement of goods across borders of EU member states, Turkey, Iceland, Norway, Switzerland, Lichtenstein, North Macedonia and Serbia, requiring customs declaration and duty payments only once the goods arrive at their final destination.
The UK is currently a member of CTC through its membership of the EU and will continue to remain a member even once the UK has left the EU, although the UK would be classed as a separate customs territory in the event of a no-deal scenario. Requirements would be largely the same, however goods would need to pass through a Transit Office and an additional Transit Accompanying Document will be required at point of entry either to the UK or to the EU (from the UK).
Businesses should consider how to comply with these new requirement such as:
- Register to use the NCTS system for moving goods under transit or appoint an agent/ intermediary to do this; or
- Register as an Authorised Consignor / Consignee to enable start and end transit movements from a company’s own premises (frequent / larger volumes of goods)
Goods covered by New Approach requirements and UKCA Marking
Product and consumer goods legislation is effectively applied in 3 categories –
- ‘Old Approach’ – described as standalone Regulations, typically covering goods such as cars, pharmaceuticals and chemicals;
- ‘New Approach’ - essential high level requirements are given in legislation and compliance is determined by using a series of harmonised standards such as those covering toys or machinery.
- ‘Non-harmonised goods’ – where no CE marking is required, goods are subject to national as opposed to EU legislation
The EU has made it quite clear that certain compliance activity undertaken in the UK in relation to EU regulations, including conformity assessments performed by UK Notified Bodies, will no longer be recognised and that the UK will be treated as a third country for regulatory purposes from exit day 1. This will impact goods placed on the market after exit day 1, as products that have already been placed on the EU market before exit day, including those that have been subject to a UK based conformity assessment, will still be able to circulate freely.
Goods placed on the EU market after exit day 1 will continue to require application of the CE mark. This can either be done via self-certification or by means of a conformity assessment however as UK notified bodies will no longer be recognised, either the goods will have to be re-assessed by an EU notified body or manufacturers holding UK conformity assessments can apply for file transfer to an EU notified body.
It should be noted that this restriction only applies to specific conformity assessments. Test reports issued by an accredited body should still be accepted.
In contrast, the UK has chosen to adopt a continuity based approach for a limited period of time (expected to be at least 12 months) to minimise disruption by allowing CE marked goods to be brought into the UK and accepting conformity assessments, where relevant, that have been undertaken by EU notified bodies.
In the meantime, UK equivalent legislation has been established for those goods currently covered by EU regulatory frameworks, and there is expected to be no change in requirements for the period immediately after exit as the UK requirements will mirror those of the EU.
Where goods are classed as Medical devices however, there may be additional requirements to be met and it is recommended that businesses check with the relevant bodies prior to placing goods on the EU market.
Currently when considering the New Approach framework, a CE Mark can be applied to a product either following a self-certification process or through a 3rd party conformity assessment. For a time limited period, the UK will accept goods bearing the CE mark and conformity assessment by an EU notified body.
New UK specific legislation has been implemented which enables self-certification and conformity assessment to be undertaken by a UK Approved body and the new UKCA mark applied. Whilst during the continuity period the UK will accept goods marked with the CE mark and conformity Assessments by EU Notified Bodies, where a conformity assessment has been undertaken by a UK Approved Body, the UKCA mark must be applied.
In the case of self-certification, in order to place on both the UK and EU markets, the UKCA mark and the CE mark can both be used on the proviso that the product meets the requirement of both UK and EU requirements.
In the case of goods covered by specific conformity assessments undertaken by both a UK Approved Body and an EU Notified Body in order to place on both the UK and EU markets, the UKCA mark and the CE mark along with the respective Approved and Notified body details can both be applied to a product.
Important notes for “distributors”
UK or EU based “distributors” may, in the event of a no-deal, become “importers” respectively and therefore must ensure they are aware of the increased responsibilities of importers. This includes additional obligations in relation to product safety and compliance and in the marking of the product with the importers address. Where in doubt, legal advice should be sought.
Whilst there remains a requirement to place the importers address on the product or the packaging, the UK recognises that this may not be immediately practicable and as such a short transitional period of 18 months (after the date of exit) has been agreed during which time a newly classified importer may include their details on a slip of paper with the product, as opposed to marking on the product itself.
It is important to note that this transitional measure applies for goods brought into the UK only, it is not mirrored by the EU.
Further information including summary reports from weekly BEIS Business Readiness Forum Meetings is available on the FIRA website.
In addition, Association members can find further information on preparations for a potential “no-deal” Brexit including links to relevant documents and sources on the HMRC platform. This includes information on importing, exporting and transporting goods, trading goods covered by the “New Approach” framework (CE marking directives), trading timber products and chemicals. More here
Importing and exporting preparations in the event of a no-deal Brexit