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Preparing your business for exit from the EU

Posted on 14 Mar 2018

Preparing your business for exit from the EU

In the first of a series of articles about Preparing for Brexit, Warrant Group's Head of Supply Chain, Andy Simpson explains how reducing risk is a way to help weather the uncertainties.

In an open letter published to business leaders across the UK at the end of January, the Government said it was aware that many businesses were 'examining the implications of our withdrawal from the EU for themselves and their supply chains'.

Signed by the Secretary of State for Exiting the EU, David Davis, Chancellor Philip Hammond and Business Secretary Greg Clark, the letter stated that the Government's proposal for a time-limited implementation period following March 29th 2019 had been warmly welcomed and promised 'the certainty and clarity needed to plan ahead'.

Whatever finally happens and when, it will be the companies and organisations that operate compliant supply chains with 'trusted trader' Authorised Economic Operator status that are likely to be best placed to weather the unknowns and uncertainties.

In 2015 the value of trade in goods that crossed the UK border was estimated at nearly £700bn; the annual customs and excise duties and VAT collected by HMRC is currently worth about £34bn and there are currently 55m customs declarations each year.

In 2016, a World Bank ranking of the efficiency of border clearance processes including customs rated the UK as fifth out of 160 countries.

The Government said it will agree a new customs arrangement with the EU to ensure that trade is as seamless and frictionless as possible

However with every shipment to or from the EU likely to become a customs import or export declaration, the HMRC has estimated that the number of customs declarations could increase by 200m after the UK exits the EU.

Running alongside the need to deliver frictionless trade post Brexit, is the introduction of the Customs Declaration Service with phased transition due to start in August and end by January 2019.

The new system, replacing the current customs system known as CHIEF (Customs Handling of Import and Export freight), was originally in the pipeline before the referendum on the EU to meet the requirements of the EU's new Union Customs Code. The UCC requires all communications between customs authorities and traders to be electronic by December 2020.

However closely we are aligned at the border with the EU post March 2019, what we can be fairly certain of is that companies and organisations that minimise risk in their supply chain by adopting advanced data procedures and by being AEO certified will be best placed to face the uncertainties.

Companies need to be asking themselves - are we compliant today? Are our current policies and procedures robust?

Authorised Economic Operator (AEO) is an internationally recognised quality mark indicating that a company's role in the international supply chain is secure and that their customs controls and procedures are efficient and compliant.

Increasing training and knowledge around customs stands to reason although the level of investment required is undoubtedly difficult to judge. However, it is never too late to become AEO compliant. Better be in the queue now than leave it to Brexit Day One.

Be Prepared for Brexit

What we know

  • The Government has ruled out of being a member of the Single Market and Customs Union.
  • The Government wants a bold and ambitious Free Trade Agreement with the EU
  • The Government will agree a new customs arrangement with the EU to ensure that trade with the EU is as seamless and frictionless as possible.

August 2018
The date phased transition starts to the new Customs Declaration Service

January 2019
The date when phased transition ends for the new Customs Declaration Service.

March 2019
The date when the UK plans to leave the EU, at 11pm on March 29th. A transition/implementation period is due to follow of around two years - although final agreement on its length of time has yet to be reached.

For more information about how Warrant Group can help your business prepare for Brexit, contact Andy Simpson, Head of Business Development. andy.simpson@warrant-group.com

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