BREXIT : HOW READY ARE YOU?
Brexit will expose 150,000 traders to Customs formalities for the first time........and that's just UK traders! Many across Europe will also be confronted with unfamiliar Customs paperwork at the end of the transition period.
Customs estimate that Brexit will create an additional 200 million declarations per year. How, when and where you submit those declarations is the key to achieve the smoothest UK-EU-UK supply chain.
How ready are you? Do you know the significance of the following sequence : EAD / EXS / (TAD) / ENS / C88 / DAN? Or how EXW and DDP
can impact the Customs process? You might not be as prepared as you thought.
We are Customs and border process specialists and have the expertise to make sense of Brexit....
Don't take our word for it...
Some of our most recent updates are shown below...
Well that’s it then, we have left the EU!
Now our attention diverts to the trade talks. Our
message is ‘keep calm and carry on’…preparing. Expect Customs
formalities from 1st January 2021 and prepare as such.
EVERYTHING CHANGES, NOTHING CHANGES
We received a lot of worried calls about the 31st January leaving date. Many thought the paperwork started from 1st February. It did not! We are now in a transition period during which time the UK Government will negotiate with the EU (and others) and those negotiations will decide what tariffs and processes apply from midnight on 31st December 2020. It should be noted that UK Gov now refers to EU as ‘rest of world’ and bunches them in the same category as USA, Australia, New Zealand, Canada etc The mood has changed and the need for some form of frictionless deal by end of the year is firmly in the ‘nice to have’ column and a long way from the ‘essential’ column. They are adamant that the transition period will not be extended.
NO DEAL IS HISTORY!
The concept of NO DEAL is dead. There might not be a suitable trade agreement (with the EU) by the end of the year but Government is not referring to that as no deal but rather as a ‘work in progress’. The border process is very likely to be similar to the previous NO DEAL version, only worse ! Many of the easements that were introduced as a survival tactic for the cliff-edge exit are now off the table. TSP (Transitional Simplified Procedure), lack of UK border inspections for food, feed and plants, temporary tariffs and perhaps even postponed VAT accounting (to be confirmed) are all shelved. Do NOT rely on them because, right now, they no longer exist. Remember, keep calm…. Plan for border friction and make sure your systems are capable of meeting the challenge. We are with Customs and various Border Agencies for an all-day event on the 10th February, the message is : autonomy over alignment (not good for a comprehensive trade deal) and expect friction. Will update you after that meeting (assuming we don’t also see the return of the dreaded Government NDA!)
EXPORT TRANSIT
Whilst we are well placed to handle import and export Customs declarations, (UK, Ireland and rest of EU), we still have an issue with TRANSIT and will be working hard to prevent this potential banana skin. Transit is likely to be very important but it has the potential to create authentication queues in the UK. We have the power to fix it, so our message to the Future Borders Group is….. help us fix it! You should be concentrating on being ‘border ready’ and never intending to approach the port to get your paperwork, that’s what the under-prepared will be doing and you don’t want to be there! We did a piece on transit with Sky news last year – it is still relevant and well worth a second watch. https://news.sky.com/story/lorries-face-huge-queues-in-a-no-deal-brexit-industry-11684363
INCOTERMS
Make sure you know your incoterms. Make it job number one. On the whole, you don’t need to panic but be careful with ex works or delivered duty paid (remember, delivered may become delivered duty paid if the buyer is not so keen on paying the duty!). These are very common terms but have major draw-backs when it comes to (a) Customs representation, (b) VAT registration in the buyers country and (c) the duty itself (which might actually be less than you thought). You need to understand the implications of incoterms and how they apply to you. Get in touch if you need some help, we’ve done webinars and many talks around the subject and have never failed to help. Better still, pop along to the event on Tuesday, see below.
CUSTOMS CLEARANCE CONSORTIUM
We’ve been busy. Our teams are now trained to UK Customs Academy level 4 and are helping clients prepare for whatever shape our eventual exit becomes. Paperwork is very very likely. There is not a trade deal in the world that does not require paperwork (mostly to prove eligibility). If you are holding out in the hope Boris can pull a rabbit from the hat, you’re probably going to have a long wait. Prepare for paperwork. We have and many of our systems are now being fully automated and integrated. Want to know what we need to prepare Customs paperwork? Give it a try : https://www.mybrexit.uk/what-do-i-need-to-do We’ll validate your data and let you know if any problems.
MEET THE EXPERTS
Along with our friends at Unsworth, we are holding a series of face-to-face events starting this Tuesday at the NEC Birmingham. Reserve your place by picking the time slot that suits you best:-
10:00 to 12:00 : https://bit.ly/2GPzqW5
12:30 to 14:30 : https://bit.ly/2GPGORA
15:00 to 17:00 : https://bit.ly/2vHGFgx
Hope to see you there. Bring your questions with you and we will do our best to address them there and then. This event is for importers/exporters specifically. Future events will include intermediaries.
NO SUCH THING AS A FREE LUNCH!
We provide this advice and guidance free of charge and are happy to do so. However, I am cycling from Land’s End to John O’Groats in June in support of Transaid and a small donation would be very much appreciated. Actually, if you should see me in June, a little push would be nice also! You can donate here : https://www.justgiving.com/fundraising/robhardyfr8
It’s been a while since we issued an update. Things have been a little quiet since the panic of the October no deal threat but, as usual, we have used the time wisely.
WHAT HAVE WE BEEN UP TO?
We’ve installed new IT. New hardware and recruited new staff. We’ve moved to a larger office and have welcomed the twentieth member to the Customs Clearance Consortium. That’s 20 companies that now have a dedicated Customs solution going forward. One that is shaped around them and building capacity around their traffic flows. We have our first member meeting on 15th January and we are looking forward to the next stage of planning and prep. Training is going well. Robert Keegan and Joseph Cranston both passed UK Customs Academy Level II training today and are itching to move to Level III and eventually on to degree status. Maniba started a little later but we are confident that she will also pass. We’re going to need a larger wall for all of the certificates (mine included!).
THE GENERAL ELECTION
It’s been nice to have the politicians pre-occupied for a while but all that is just about to change. As I type the exit polls are showing a fairly significant increase for the Conservatives, who have lead with a strong #GetBrexitDone message. Looks certain that Withdrawal Agreement will now be passed and UK will leave the EU at the end of January 2020, as planned. Conservative majority looking like it could be 80+ seats and this represents a very strong mandate for Boris. Getting Brexit done means that we enter an implementation period during which nothing changes at least until 31st December 2020. There is an option to extend this transition period for a further two years (to end of 2022) but that option needs to be exercised by 1st July 2020. Should be an interesting year!
NO DEAL DEAD?
In real terms yes. Leaving without a withdrawal agreement is now highly highly unlikely. There is still the possibility that we could leave at end of Dec 2020 without a trade agreement but, even if that were to happen, it would be less severe than leaving without a withdrawal agreement. GATT art.XXIV (which allows tariff free trade whilst final deal is negotiated) becomes an option. Paperwork and Customs formalities look to be part of the future and we see nothing that changes that. Hence the continued expansion and training. GATT XXIV does not per say remove the need for paperwork but can temporarily suspend the imposition of tariffs, in either direction.
WHAT MIGHT THE FUTURE LOOK LIKE?
Conservatives having a large majority changes the outlook completely. The last few years have had Conservatives relying on DUP and pandering to the ERG (eurosceptics). A large majority gives Boris more room to move but equally more room to be bullish. A lot will depend on how the USA deal takes shape and whether that means UK will move closer to EU or further from. We will continue to monitor negotiations and cut through the posturing to find the more likely path in each scenario. This victory for the Conservatives (if exit polls are to be believed) also changes the dynamics with EU. The second referendum argument is effectively dead, UK can now plan with some certainty and EU will be aware of that. Can a deal be done by end of 2020? It’s a every tough task but a barebones deal is possible, remember the GATT XXIV safety net.
WHAT CHANGES?
In the short-term, nothing. We have a year to ready our clients for the next stage. Very hard to see a frictionless exit but quite possible to see an exit with less friction (than you might have expected). Customs processes do not worry us. We are ready now and will be super ready by end of year. Our efforts will now focus on IT integration since this election gives us the time and confidence to invest in IT based simplifications. Paperwork is likely to remain but tariffs are now to be negotiated and hopefully reduced or removed in most cases. We will continue to press the policy makers on export health certificate issues as this process still gives us cause for concern. Most Customs processes can run parallel to the movement of the goods, health certificates cannot and we are keen to propose alternatives to the current stop/go process.
NORTHERN IRELAND
The Boris deal creates challenges with GB-NI flows. Challenges which even Boris seems to have failed to grasp . Again, Customs processes to not cause us any great concerns. The requirement for health certification on UK internal (GB-NI) movements needs attention and the ‘at risk of entering the EU’ tariffs need to be carefully assessed and mitigated. There will be a Joint Committee to agree these terms who will have their work cut out during the 2020 implementation period. We will continue to work closely with trade on the island of Ireland and do all we can to limit the impact of the current NI Protocol before it comes to pass.
Interesting times. The election result at least creates some certainty even if it is not perhaps the result you wanted. Leaving the EU and removing the second referendum option means we can at last plan for the future. We are not completely sure of the destination, but at least we are moving.....
Couple of big weeks ahead, culminating in the European Council meetings 17-18th October. As it stands we are leaving on the 31st October 2019. Quite how that can happen is a mystery. PM is still saying “we are leaving on the 31st” despite the Benn Act suggesting otherwise. Hopefully this is little more than a negotiating tool to keep the heat high.
We are still preparing for a no deal exit on the 31st October and will continue to do so until there is firm information to the contrary.
THE WORRY LIST
Government have four items giving them cause for concern. Shortage of Customs agents, heat treated pallets, export transit and vets! Most other items are ticked off (even if the tick is not particularly big in some cases). The shortage of agents is a concern. The work load will increase five-fold in the UK and more than ten-fold in Ireland. There are not enough agents. We have been working hard to get the Customs Clearance Consortium up and ready by 31st October and things are, so far, going according to plan. We are getting ready to handle more than 2,000 declarations a day…from day one! Impressive numbers but still less than 0.5% of the market!
Heat treated (ISPM15) pallets is still an issue. EU have not yet confirmed a concession but considering the three main pallet poolers are EU based (Chep, IPP and LPR) we are hopeful of some leniency. If you have a stock of ISPM15 pallets, keep them safe. You might not be able to export from UK to EU unless on an ISPM15 compliant pallet. For the avoidance of doubt a ‘euro pallet’ is not ISPM15 compliant unless it has the IPPC stamp. Do not think that because it says ‘euro’ it is okay. Do not export (from UK to EU) on a wood pallet unless it has the IPPC heat treated stamp. As it currently stands, you do not need ISPM15 pallets to import to UK.
Export transit. Transit is the solution to many woes but creates its own challenges. You should plan to authenticate any UK export transit documents at your premises or other premises away from the port. Wherever possible do not plan to endorse a transit document at the port of export – there are likely to be large queues. HMRC are attempting to solve this problem by creating 100+ pop-up Customs offices at truckparks across the UK. The mantra is “border ready”. Go to a pop-up, get the documents checked and if all in order you should be able to avoid any export queues which should only exist for those that have not yet obtained documents. In most cases you do not need a transit to import to UK.
Vets! Big problem. There are not enough vets for the volume of export health certificates required. Finding a vet is quite easy. Finding one that can be with you when you want (at a price you are willing to pay) is not so easy. If you export products of animal origin, get to know your local vet. Get to know her/him well! Agree the process and price. There is no point in us arranging export Customs documentation if the health certificate has not been done first. You cannot export without the certificate. Government are employing a whole bunch of assistant vets who can issue (but not stamp) the export health certificate. Idea being the ‘flying vet’ will appear to stamp those certificates that have been pre-arranged. UK have been on a recruitment drive for vets, so much so that we now understand that there is a shortage of vets in Spain!
PRODUCTS OF ANIMAL ORIGIN
Online advice has recently been updated and is conflicting. We have reported this to the Border Delivery Group. The webpage has improved but it is still foggy. Our understanding is that imports from EU do NOT require IPAFFS or IV66 from day one. We have meetings in Whitehall on Tuesday and will seek further clarity on this point. For now, if you have not already done so, it would be worth registering on IPAFFS, it’s quick, easy and free!
OUR BREXIT GUIDE
We created an interactive guide and have received a lot of positive feedback on it. If you have not already done so please go to www.mybrexit.uk/downloads and select the red button. It covers all of the above and much much more. The guide is aimed at EU exporters through to UK imports and logistics companies.
WHAT DO I NEED TO KNOW?
We are often asked the same questions. What paperwork is required and where? What do I need to do if I trade on DDP incoterms? What duty rate will apply to my imports and my exports? There are many questions but there is a recurring them. We have decided to do something about this. We have written an interactive guide that helps you understand what is required and what you need to be aware of. You can find it here : https://www.mybrexit.uk/what-do-i-need-to-know Take the test and see how much you understand. Share it within your organisation as a training aid. We hope you will find it useful.
WHAT DO I NEED TO DO?
For those that understand the basics the next question is always “what do you need from me?” We always planned to write this guide but rather than list the things you need to tick off when importing or exporting we thought we would take it to the next level. We’ve imagined you have a live transaction and you require Customs documentation. What better way to show you what is needed than actually doing a dry run? To access this element go to : https://www.mybrexit.uk/what-do-i-need-to-do Work through the questions and submit your data. You will receive a confirmation that we have the information, referenced by the trailer number and date. The data arrives with us in a way that allows us to efficiently prepare Customs documentation. Try it, share it and generally have a play. We will prepare a dummy entry based on what you send to us. There is no charge – we need good test data and your sampling of the process will help both of us.
PERSONALISED VERSION
If you are a logistics company and would like your own branded version of the ‘what do I need to do?’ process let us know. It will be set-up in your name with the entry data going directly to whatever email address you nominate. There is a charge of £500 for the personalised version. There is no charge for members of the Customs Clearance Consortium.
It has been a while since we published an update. Probably overdue. We have not been idle though. April came and went and hardly anybody was ready. We got an extension until end of October and it’s been pretty chaotic since then! We sat back, re-assessed and realised that we could not repeat the March/April panic – we needed to do something different. So we created the CUSTOMS CLEARANCE CONSORTIUM and have been busy training new staff ready for 31st October and life after Brexit. We expect to be handling around 2000 declarations a day, from day one! This is precisely why we might have gone a bit quiet. We’ve been building and it’s looking pretty good.
For us there are only three major issues remaining:-
1. Export transit
2. Shortage of vets for health certification
3. Pallets
For many, number 4 would be the lack of Customs agents, but that is precisely why we created the CONSORTIUM.
So, what can we tell you? Actually, quite a bit now that the Government have lifted the NDA’s that may have prevented us from being quite so open in the past.
EXPORT TRANSIT
UK exports might not affect you and you may be tempted to ignore this issue. Don’t! If the truck that brought your goods in struggles to get back out again, he may not be quite so keen to repeat the process. Transit is mostly related to export movements from UK to mainland EU. The vehicle will either clear at the EU port of arrival or transit inland for clearance at approved premises closer to the ultimate destination. The majority will be on transit. We often hear that transit is the solution to all…..it can be the problem too! To raise a transit document you need a transit guarantee (not cheap!). To authenticate a transit you need authorised consignor status or you need to go to the port….along with all the others who are not as prepared as they could/should have been.
Arrive in Calais, for example, with no transit or a transit that has not been authenticated and you might be coming back on the next ferry! (unless you have a pre-lodged entry in place). Operation BROCK, which is the freight stacking system for Kent is mostly for transit – while trucks queue up to get their TAD (transit accompanying document) raised and stamped at STOP24 or MotisFSA. You need to avoid these queues….and you can. Government want to make sure that only those that are BORDER READY are allowed to reach the port/terminal of export. There is even the suggestion of fines if trucks arrive at Dover, for example, with incorrect or incomplete documents.
What is being done about it? More locations are needed to (a) check the paperwork and (b) authenticate the paperwork. Government plan is to install a number of pop-ups (about 100) dotted around the UK. The driver will be required to call in, get pre-checked and directed accordingly. This can work. We are also working with a number of truckstops to have them approved for the authentication of export documentation. The most notable being the recently extended Ashford International Truckstop which can now accommodate around 600 trucks, thereby doubling the capacity in Kent.
A large part of the effort is focussed on export transit at the moment. I’m back in Whitehall this week precisely for this reason. Watch this space but be aware that diagnosis is 50% of the cure….we’re working hard on the other 50%!
SHORTAGE OF VETS
Products of animal origin (POAO) will require an export health certificate to be allowed entry in to EU. For the avoidance of doubt, in most cases you will NOT need a health cert for UK imports. There is a shortage of vets, probably more than there is a shortage of Customs agents. Exporting POAO goods will be a delay at despatch (waiting for vet sign off) and a delay at EU import as goods and paperwork will need to be checked. There simply aren’t enough vets. We are expecting DEFRA to delegate responsibility to authorised traders and 3rd parties (similar to the process today with the issue and authentication of EUR1/ATR1 preference certificates). We have suggested that some (not all) of the proposed export pop-up stations should include the ability to issue health certs.
If you know a vet, talk to him/her as soon as possible – you need to secure their services in the event of a no deal…..and they’ll be getting many calls right now.
PALLETS
Not a Customs issue but could be a major issue. Wooden pallets entering the EU should be ISPM15 heat treated. Most are not. Mainland EU have shown signs of relaxing this requirement. A recent communication from Tesco Ireland would suggest that Ireland are intending to apply the letter of the law. We continue to monitor the situation. You should speak to your pallet provider. You need the ones with the IPPC stamp!
BREXIT GUIDE
Of course that is not it. We also need to tell you about TSP, about the pitfalls of DDP, about registering with TRACES/IPAFFS/PEACH/DAFM. Too much info for an email. So we’ve written an interactive guide. The guide offers punchy advice whether you are a UK exporter, UK importer, EU exporter, EU importer or logistics provider. It also includes a walk-through of the no deal border process. To get your copy go to : https://www.mybrexit.uk/downloads and click on the link for BREXIT guide Aug19 (we’ve made it red so you can find it easily). Download the file to your desktop and play as a powerpoint show otherwise the animations and links will not work. Enjoy!
IRELAND
Conspicuous by its absence. Not included here in great detail as not fully designed as yet. We know what the processes will be for GB-IRL-GB. We know what the process will be for IRL-NI. The missing piece is NI-IRL. We know what the process is but the question is more where than what. The CONSORTIUM is set-up to also prepare and present Customs declarations in IRL so we are fine with the processes. We continue to monitor developments and are confident that we are agile enough to handle the eventual process, no matter what it is. We have also not covered IRL-UK-IRL transit here but again, we know the process, aside from GB-IRL-NI as currently there is no stand-out solution for closing the transit in NI. Again, diagnosis is 50% of the cure.
We hope you will find this update useful. Make sure you download the BREXIT Guide Aug19. As usual, please excuse any typing or grammatical errors, we are more concerned with the content than the appearance.