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Oakland International - Article

BREXIT Update No: 13

Robert Hardy

Robert Hardy

Founder and CEO EORI

Brexit is raising its head again, so probably time we raised ours! Covid-19 has rightly shifted focus and, for a period at least, has knocked Brexit off the top spot of things to contend with. We are not epidemiologists and therefore do not have a learned view on the pandemic, suffice to say that we hope everybody is fit, well and able to #staysafe.

Let’s get back to what we know best: BREXIT and the Customs/border processes associated with it…

HOLDING ON FOR A HERO

The transition period ends on 31st December. Trade talks (with the EU) are not going well and the possibility of a ‘no FTA’ exit at the end of the year is ever-present. Actually it doesn’t matter much (at least not in terms of Customs/border processes).

An FTA might, if we are very lucky, achieve three things:-

1. Zero tariffs on most goods (agri-foods and other ‘sensitive’ items may still attract duty, even in an FTA)

2. Relaxation of SPS controls (no need for health certs in layman’s terms)

3. Safety & Security agreement similar to the one between EU and CH where S&S declarations are not required.

If these three (rather large) boxes can be ticked it would be Brexit utopia. Notice how we have not mentioned Customs processes? If you think a trade deal would/could remove Customs processes, think again! Customs paperwork will be required, deal or not. Accept that as fact and get ready.

EXTENSION REBELLION

There will be an extension to the transition period because of Covid-19, right? Almost certainly not. David Frost has said no, as have Liz Truss, Michael Gove and other senior figures. Even Michel Barnier’s team seem to have accepted that there will not be an extension. For us the most significant response was actually from Keir Starmer. When asked (on LBC radio) if he would push the Government for an extension [to the transition period], he thought for a bit and said “no”. He explained “the Government said they could deliver a trade deal by the end of the year, let’s see how they get on with that”. Very clever.

DON’T PANIC, DON’T PANIC!

So, what do we know so far and what are we planning for?

– Customs formalities will be required

– TSP (the simplified UK import process) has been withdrawn

– UK unsecured deferment numbers starting with ‘6’ are no longer valid

– Safety & security declarations will be required

– DDP and Ex Works require foreign VAT registration (in most cases)

– UK imports (and exports) will require SPS* health certification as appropriate

– Goods subject to SPS will be required to pass through a Border Control Post (BCP)

– All tariffs are under review, do not expect information until Q4 2020

– UK VAT does NOT need to be paid at importation. Handled through VAT returns

– Movements from GB to NI require import entry in NI and may be dutiable (at EU rate)

– SPS goods from GB to NI require health certificate and BCP on arrival

The Northern Ireland Protocol is established on the basis that NI remains in the UK Customs territory, but is working to the EU Customs code. Certain GB goods at risk of moving to Republic of Ireland will be subject to EU duty on arrival in Northern Ireland. The Joint Committee is responsible for defining the categories of goods at risk. Expect outline information Q3 2020.

*SPS = Sanitary and phyto-sanitary (products of animal origin, plants, vegetables, fruit and produce). Fish could also require additional control in the form of catch certificates.

SPS remains the largest challenge. Whilst we are comfortable with the TRACES NT and IPAFFS processes the physical health certificate is an issue and one which we are not able to soften. It is the exporter’s responsibility to raise the health/phyto certificate. We can do the rest, but we can’t do that part. If you handle products of animal origin, plants, vegetables or produce make sure you have the certificate process mapped.

DATA DATA AND MORE DATA…

Customs and border processes are pretty well defined and, believe it or not, follow a logical pattern. The real skill comes in the management and sequencing of these processes so that delays can be minimised or avoided.

We have made significant progress in our RPA (Robotic Process Automation) trials and are now entering the robot build phase. Master data is essential otherwise trucks could be delayed whilst header information is created so that item (transaction) data can be entered. There is no need to wait for this step in the process. It should be done now and tested now. We have created an online process for this vital data capture and would urge you to allocate time to complete it. Click HERE. You would be amazed how much of the process can be completed from this data or how prepared you can become in under an hour!

NEED CUSTOMS DOCUMENTATION?

Many have completed the basic training and now have a better understanding of Customs processes. Some have even installed the software. Now what? “Putting on gloves doesn’t make you a fighter, picking up a pen doesn’t make you a writer” (Paul Weller, from the song Science). It took me a few months to learn Customs documentation but years to understand the intricacies of border processes and what to do when things go wrong. “..the Customs entry does not have to be right, but it can’t be wrong!” If you do not understand the significance of this statement, you are not ready.

We have set out to make life easier for you and have created three ways of arranging Customs documentation:-

1. PORTAL – manually input the data by answering a series of questions

2. SLICK – quick entry for single line standard entries (CCC VIP only)

3. CDI – Customs Data Interchange: transfer data to us by xml, csv, xls or pdf

For the full technical user guide click HERE.

WHO IS THE HAULIER?

Brexit border processes are mostly electronic and rely on the MRN (Movement Reference Number) being in the right place at the right time. At some ports this means the driver having the MRN’s to hand. In many cases we will be working directly with the exporter or importer and will not always have the contact details of the haulier, particularly if the load is sub-contracted. We can easily envisage a situation where we have generated the MRN but do not know who the haulier is, or where to send it (particularly outside of normal office hours). As usual, having identified a potential problem we have built a solution. Register your truck and trailer numbers with us and we will pass border information to you whenever one of your vehicles is involved. Click HERE to access the register or pass this link to your transport providers and ask them to register.

FOREIGN VAT REGISTRATION

If you are shipping on DDP or Ex Works terms you will probably require VAT registration in the destination country. In most cases you do not require a legal entity and can, instead, have non-resident registration. We have handled many UK VAT registrations for EU shippers and are pleased to report that we can now handle non-resident VAT registration in Ireland as well. Click HERE for details. Note in some EU Member States you will be required to appoint a Fiscal Representative to manage your local tax affairs. Not so with UK or Ireland.

WHITEPAPERS

We have been productive during the lockdown and have created a bunch of information whitepapers and videos, covering:-

– Jargon busting

– Deferment – do you need one?

– Freight forwarders and their role

– Transit – friend or foe?

These and other useful information can be downloaded from our website. Click HERE.

BRUNCH

Last, but not least; we are holding a series of BRUNCH events (Brexit lunch). Now that virtual meetings have become part of our working life (and social life for that matter), we have decided to schedule a series of open meetings where we will delve in to various critical aspects of Customs and border processes. The first one is scheduled for Thursday 28th May (12:30 to 13:30 UK time). We hope you can join us!

Robert Hardy, Commercial Director, Oakland International/Oakland Invicta