The UK and the EU have both now agreed their negotiating mandates in readiness to start Trade Talks.
While we wait for the UK to publish its position, the publication of the EU’s starting position once again reminds us that there will be Customs Declarations between the UK and the EU, with any customs co-operation and trade facilitation operating within the framework of the Union Customs Code.
It is important to note that if you currently import goods from outside the UK or EU and sell them into the other territory then you should be aware that even under a Free Trade Area agreement you may still have to pay additional customs duties if you do not meet the rules of origin of the agreement.
“The envisaged partnership should include appropriate rules of origin based on the standard preferential rules of origin of the Union and taking into account the Union’s interest.” - [ ANNEX to COUNCIL DECISION authorising the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for a new partnership agreement ]
To avoid paying duty twice, there are only two options if you are dealing with finished goods where no further significant processing will be undertaken, or insufficient local content will be added::
- Ship direct form outside the EU or UK to the other territory
- Make use of Customs Warehousing
However, there may be exceptions if the goods come from countries that hold preferential agreements with both the UK and the EU or goods are duty free in a territory by virtue of the normal tariff, nevertheless this is something importers will need to start considering.
It can take many months to obtain a customs warehousing authorisation, it will also involve a need to submit customs declarations on removal whether they are for import or export. Of course, it is possible to take advantage of third party logistics providers, but that will also come with additional cost, additional administration and co-ordination, plus a potentially limited capacity until supply can meet actual demand as was seen in the run up to a no-deal Brexit.
If this could affect your business, and you are thinking of setting up a customs warehouse that will require the submission of Customs Declarations then contact us today.
For further information on Brexit why not visit our Brexit Resource Center?