PATRONS Worried about Brexit
trading unknowns? Here’s how addressing the
‘known knowns’ can really help As the post-Brexit EU trade deal negotiations continue into the autumn, and we come to the end of the transition period on 31 December, UK businesses must prepare. Department for International Trade (DIT) export champion and chief executive of Morningside Pharmaceuticals, Dr Nik Kotecha OBE (pictured), shares his thoughts on how to be ready for every known and unknown eventuality.
“As the famous quote goes, ‘there are known knowns, known unknowns and also unknowns unknowns’. This very much applies to the
current Brexit negotiations between the UK and the EU as we know there are red lines on both sides, though the outcomes are still unknown. What is clear to me and my
company is that businesses must prepare for every eventuality, and start right now, if they have not done so already.
GETTING STARTED The first question is where should you start? The best source of information if you are just beginning the process is
gov.uk/transition where you can find the latest Government guidance on preparing for the end of the transition period. For most businesses, the
guidance on importing and exporting goods with the EU is particularly important. If you can’t find the answers you
need, you can also make use of an enquiry service run by the Department for International Trade. Fill in the form and one of their experts will get back to you.
PREPARING OUR SUPPLY CHAIN At Morningside Pharmaceuticals, we manufacture and supply quality generic medicines to both UK and international markets. We are actively making plans to mitigate any disruption to our import and export activities from the EU, particularly with our supply chain. There is no import duty on
“finished” pharmaceutical packs, but we are concerned about disruption to our supply chains and the time taken to get products to destinations through customs. We’re checking tariffs that may
In terms of our logistics partners,
most haulage providers are also taking part in alternative routing, which is worth exploring and may help avoid delays at Dover and Calais.
PREPARING TO KEEP EXPORTING All export shipments to the EU will require a customs declaration, and we’ve ensured we have an EU EORI number staring with “GB”, and if there are any licensing requirements or rules for the goods we export. For example, the rule for pharmaceuticals entering the EU is that any product that is being used in the EU, and going to an end patient there, must be released by a “qualified person” within the EU. In the event of no deal, we have
be payable under the new UK global tariff that will apply to goods imported from around the world, unless there’s a trade agreement in place. One of the most important
actions we took was to apply to be an Authorised Economic Operator (AEO), which is an international standard accreditation given by HMRC that shows our supply chain is safe and secure. It also ensures that the holder may be able to benefit from arrangements under Mutual Recognition Agreements (MRA), which are agreed with third country customs authorities. To achieve this, a business must
submit an application to HMRC, which is then followed by an audit and inspection of the supply chain. To help prepare for the audit, we carried out a gap analysis to further improve our processes, which were fully reviewed in line with the criteria. We believe that the AEO (C&S) standards will keep us in good stead for not just trading with the EU, but for the rest of the world as well.
MITIGATING DISRUPTION Another important step is to check if you should register for VAT. You must also ensure you apply for a licence or certificate if you need one for the sector you work in, and make an export declaration to get goods through customs. For importing, businesses will
have to make customs declarations when importing goods from the EU. Be aware that from 1 January 2021, the rules for importing some types of goods will change. You should also make sure you have an EORI number starting with “GB”, have checked the rate of tax and duty needed to pay, and have looked at ways to make the importing process quicker. As a responsible manufacturer
and supplier of pharmaceutical products, we have proactively taken action to ensure there is no disruption to the supply of medicines. An example of this includes a buffer stock of six weeks’ worth of drugs to cover any potential delays with shipping goods at the ports.
built contingency plans to release batches for our customers in the EU through a site in the Republic of Ireland. Having an EU base will also enable us to comply with EU regulations around pharmacovigilance and the licensing of medicines in the EU from an EU territory. Another high priority for us is to
work with the Department for Health & Social Care to ensure we are able to continue to supply our patients in the UK, as well as exporting medicines to patients who need them “on time”, especially as the risks of a second Covid-19 wave this winter are all too apparent. My advice to businesses would
be to look at all of your known knowns and unknown knowns, and start preparing for every eventuality. This is the only way to ensure businesses are as prepared as they can be.
The Chamber will host a Brexit Conference on 26 November to help businesses prepare for 1 January. To book a place, visit
bit.ly/34D1jgJ
business network November 2020 23
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