British businesses involved in the international supply chain may have been provided with some clarity when it comes to the framework of Brexit trade arrangements, but have been warned not to be complacent ahead of the country’s imminent departure from the EU.
Customs expert David Miller is urging companies involved in the international supply chain to act now, as the General Election result cements Boris Johnson’s plans to leave on 31st January 2020.
Following the Conservatives’ historic election victory which has produced a majority government, the UK’s leading independent customs expert David Miller, co-founder of The Customs People, has shared his thoughts on what the future holds for businesses when it comes to trading after Brexit.
He said: “What is clear is that as Boris Johnson now has a large majority in the House of Commons, his ‘oven-ready’ withdrawal agreement is set to pass so that the UK will leave the EU on 31 January 2020, but for trade purposes then enter a transition period until at least 31 December 2020, at the very earliest.”
Miller warned that businesses choosing to be complacent during this period of additional preparation time may find themselves in a difficult situation as time passes by in the lead-up to Brexit.
He added: “Whilst the withdrawal agreement of course still needs to pass through Parliament, which the majority should allow, the good news is that the threat of a no-deal Brexit seems now to have passed, with some certainty at least as to how the UK will trade for at least the next 12 months.
“With the Government planning on a second reading of the withdrawal agreement before Christmas, this means that the intensive Brexit planning that a no-deal would’ve undoubtedly meant between now and 31st January is unlikely to be needed. However, that is not to say that Brexit-weary businesses should do nothing between now and next December or when the UK does leave the Customs Union, as December 2020 is somewhat ambitious given the necessary process for a Free Trade Agreement to be agreed and ratified.”
Once the January 2020 cut-off point has passed, ‘phase 1’ of Brexit will then be complete in that the UK will have left the EU, but the government will still be faced with the integral task of securing a Free Trade Arrangement, which is what the transition period is designed for. During this period the UK will continue to operate under the same conditions, with trade between the UK and EU still treated as part of the Single Market.
The narrative on this process is far from clear, as the negotiations have not even started. As such, Miller has stated that UK businesses should consider the following issues in 2020 to ensure they are ready in good time for when the UK does eventually leave the Customs Union:
- What is the current origin of goods traded? If a business does not know this, then there is a wealth of information available to identify this
- Consider looking at the available accreditations to assist with EU trade under an FTA:
- Exporters to the EU should consider applying for ‘Approved Exporter’ status, as this will save on administration in the long term
- Consider AEO status – AEO or an equivalent trusted trade scheme will continue post-Brexit and after leaving the Customs Union, and will become even more relevant as we move to a managed exit
Miller says: “The result of yesterday’s election is good news from a trade perspective, in that it provides some clarity as to the framework of Brexit and allows Brexit-weary businesses some respite for the time being. It also means businesses now have the opportunity to plan for the eventual ‘orderly’ exit from the Customs Union during 2020.”