www.bifa.org


Policy & Compliance


out how to prepare for EU Exit, and the steps to be considered. One of the most important documents is the continually updated partnership pack. This pack provides an overview of the processes and procedures that are likely to apply to cross-border trade in a no-deal scenario. Whilst most of the focus is on Customs matters, traders have to be


aware that many other regulations may become applicable on 29 March. For instance, licences may be required for moving ‘dual use’ goods to and from the EU, where previously none has been required, and additional checks may be required for animal and agricultural products moving between the UK and EU. There are many additional and often overlooked regulations to be considered. For instance, the Department for Environment, Food & Rural Affairs (DEFRA) has announced that in a no-deal scenario, businesses importing timber and timber products from the European Union (EU) and European Economic Area (EEA) and placing it on the UK market will have to carry out ‘due diligence’ from day one of EU Exit. These checks demonstrate they are importing legally harvested timber, helping to protect against illegal deforestation. This gives an indicator of the level of detail that business has to consider.


Moving goods One area that has consistently worried trade is not just the regulatory processes applied to allow cargo to move through frontiers, but how to move the goods in the first place. Until now, the vast majority of intra-EU trade has been based on road movements with approximately 80% of all such consignments moving through the Straits of Dover. Going forward, when considering how to move cargo, consideration will have to be given to the routing and mode dependent on capacity. For instance, there has been a modal shift from driver accompanied to unaccompanied trailers with the latter increasing by 7% in a year. Some are considering a switch to shortsea freight, which is being heavily promoted by some ports and carriers. In


BIFAlink


fact, one shortsea carrier has announced a ‘Brexit surcharge’ on all containers being shipped to the UK. Traders are not only looking at routes and potential suppliers


outside the EU in the run-up to a possible hard Brexit, they are also increasing their stockholding, which is leading in some areas to a shortage of warehouse capacity. Additionally, we are hearing that importers and exporters are ensuring they will either ship their exports or receive their imports before 29 March in order to prevent disruption to their business.


Postponed VAT accounting Non-tariff barriers take many forms, one of which is the cost of financing trade and customs activities. Government has stated that it will be assisting trade by re-introducing postponed VAT accounting, as detailed in Statutory Instrument 2019 No. 60. Also, there are welcome changes relative to deferment and special


procedures. One notable exception relative to relaxing the need for a guarantee relates to the Common Transit Convention, governed by international regulations, where no easements are anticipated. However, traders need to consider carefully what guarantees they have in place and work out the financial implications of the potential additional duties being levied on EU goods being imported into the UK from the EU, or if suppliers have changed from the rest of the world. In this brief overview of the potential pitfalls and opportunities


provided by a potential no-deal Brexit we have attempted to highlight the main issues from a UK perspective. Clearly this is potentially the biggest single change to UK trade and customs activities in 50 years, and nobody is sure what the impact will be on the UK. Members, particularly those engaged in trade across the Dover Straits and with Ireland, have voiced particular and understandable concerns. Let us just hope that the worst case scenario of a drop in trade of 87% across of the Dover Straits is proven to be unduly pessimistic.


March 2019


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