HOW TO CONTINUE ADAPTING YOUR COMPANY AFTER BREXIT
- Introduction
With the United Kingdom’s withdrawal from the European Union, EU companies are experiencing its consequences in their transactions.
Firstly, Brexit is understood to affect companies that provide or receive services and sell or purchase goods in the United Kingdom; in addition to those that transport goods across the country.
It should be taken into account that the United Kingdom and the European Union have negotiated a withdrawal agreement, so the consequences may vary under the agreement and the transitional period. However, we must anticipate the effects on customs considering the United Kingdom as a non-EU country.
Trade relations with a country outside the European Union are governed by the general rules of the World Trade Organization.
- General Rules of the World Trade Organization (WTO)
The World Trade Organization (WTO) is the international body responsible for the rules that govern trade between countries. The pillars it rests upon are the WTO Agreements, which have been negotiated and signed by the vast majority of countries participating in world trade.
Application of the World Trade Organization’s general rules would mean that any company conducting transactions with the United Kingdom:
- Must comply with the customs formalities for merchandise coming from or going to the United Kingdom; for this purpose, they must present customs declarations and the customs authorities may require guarantees for potential or existing customs debts.
- Goods coming from the United Kingdom shall be subject to customs duties, as is the case with any third-party country not belonging to the EU.
- Prohibitions or restrictions shall apply to certain goods coming from the United Kingdom, which may require import or export licences.
- No authorisations or certificates issued by the United Kingdom shall be valid in the European Union (EU27). For example, import and export licences, authorisations for customs simplifications or procedures, or Authorised Economic Operator (AEO) authorisations.
- Export declarations shall be required for the transport of goods to the United Kingdom.
- Goods entering from the United Kingdom must be subject to import VAT.
- Goods subject to excise duty transported from the UK to the EU (EU27) must be cleared through customs before any movement can be initiated under the Excise Movement and Control System (EMCS).
- What action must be taken by companies affected by Brexit?
Firstly, it is essential to study whether the company has any kind of business relationship, or carries out operations of any kind in the UK. If so, it is recommended the company is registered with the national customs authority, in order to carry out commercial operations with countries that are not European Union members.
The company must have personnel trained in customs matters, as well as technical capacity or customs authorisations. The company should analyse whether it is prepared to address ongoing trade relations with or through the United Kingdom.
It is important to find out about existing simplifications and facilitations that your company can benefit from, such as simplifications for including goods in a customs regime; a reduction in the amount or waiver of comprehensive guarantees; or simplifications in transit procedures.
It is convenient to request status as Authorized Economic Operator from the national customs authority. Furthermore, if the company is registered with the VAT Single Window in the United Kingdom, it would be a recommendable to register in a Member State.
Finally, maintaining communication with business partners will be essential, as the United Kingdom’s exit from the European Union may also affect supply chains.