Brexit in focus
As we start to emerge from the global pandemic thoughts are turning back to Brexit, where negotiations continued during the crisis between the UK and EU.
The UK government has now formally notified the European Union, that they will not be seeking to extend the Transition Period. This means that from 1 January 2021 the UK will be a third country operating outside the EU’s Customs Union and Single Market.
New Customs and Sanitary and Phytosanitary (SPS) checks will apply to trade between the UK and the EU from 1 January 2021, regardless of whether there is a Trade Agreement between the EU and the UK. The dedicated Ireland – Northern Ireland Protocol will also take effect regardless of the outcome of the negotiations.
This now leaves six months to prepare for the end of the transition period and in the absence of any positive progress in the trade negotiations there is the potential for a ‘No Deal Brexit’. In response the EU has pledged to step up negotiations with the UK towards a agreeing a potential Trade Deal; though many issues remain to outstanding.
Our customers can rest assured that our Brexit Steering Group, headed by Ian Hampton, is working hard to ensure we are ready for any outcome. We are working closely with the UK government on regulations, guidance and policy arising from the negotiations.
A Phased Approach to Implementation
The UK Government’s has outlined a phased approach to the introduction of import controls in the UK over a 6 month period from 1 January 2021 to 1 July 2021. This provides much needed time for traders, hauliers and the ports and shipping industry to make ready infrastructure and IT systems that the UK new borders will require. This relaxation applies to UK imports only and exports will be subject to EU requirements.
The three phases are as follows:
From January 2021
- Traders importing standard goods, covering everything from clothes to electronics, will have up to six months to submit customs declarations to HM Revenue & Customs (HMRC).
- Tariffs, if applicable, will need to be paid on all imports, payments can be deferred until the customs declaration has been made, at latest 1 July 2021.
- Safety & security declarations will not be required for 6 months for all goods.
- There will be checks on controlled goods like alcohol and tobacco.
- Traders will need to consider how they account for VAT on imported goods.
- There will be physical checks at the point of destination or other approved premises on all high risk live animals and plants.
From April 2021:
- All products of animal origin (POAO) – for example meat, pet food, honey, milk or egg products – and all regulated plants and plant products, will also require pre-notification and the relevant health documentation.
From July 2021:
- Traders moving all goods will have to make full declarations at the point of importation and pay relevant tariffs.
- Full Safety and Security declarations will be required,
- For SPS commodities there will be an increase in physical checks and the taking of samples: checks for animals, plants and their products will now take place at British Border Control Posts. The changes are aimed at British/EU trade only.
This phased approach does not apply to the flow of trade between Northern Ireland and Ireland, or between Northern Ireland and the rest of the UK.
New border facilities will be built in England, Scotland and Wales for the purpose of carrying out the required checks, such as customs compliance, transit, and Sanitary and Phytosanitary (SPS) checks. Where there is no space at ports for new these activities to take place, the government will build new infrastructure inland.
This phased approach clearly raises many questions about how it will all work in practice – as soon as Stena Line has any insight it will share it with its customers.
Northern Ireland
While customers trading with the EU will have until July 2021 to fully adapt to any post-Brexit customs regime, the changes in Northern Ireland will come into effect from 1 January 2021, in order to comply with the EU Customs Code.
The UK government has indicated that traders exporting from Northern Ireland to England, Scotland and Wales will face minimal changes and trade going from Northern Ireland to the rest of the UK should take place as it does now. However it is possible that the EU will take a different view with the possibility that exit summary declarations will be required.
While there remain many outstanding issues, the UK government has confirmed there will be some changes to goods entering Northern Ireland from England, Scotland or Wales though these have yet to be agreed with the EU. For instance the EU has strict rules on the entry of animals and food products, which must always enter the single market through designed Border Control Posts (BCPs). The UK government has already indicated to the EU that it will develop BCPs at Northern Ireland’s ports.
It is clear, though that there will be no Customs or SPS checks on goods between Ireland and Northern Ireland.
In the coming months we will keep our customers up to date with any further progress in the Brexit negotiations and provide advice on what they need to do in order to be prepared.
David Holderness
Lastly, some of our customers may know David Holderness, the formerly Freight Commercial Manager on the Irish Sea South; he has now been seconded to the role of Brexit Co-ordinator.