About Brexit

PREFACE

If the United Kingdom (England, Scotland, Wales and Northern Ireland) leaves the European Union on 12 April 2019, it will no longer be part of the internal market and the customs union. This means that thousands of companies will be forced to file a customs declaration overnight. In the first place, that is a huge volume. In addition, for the vast majority of these companies (in the Netherlands alone this is estimated at 35,000 companies) this is an almost impossible administrative task. After all, they know nothing about having to file declarations, simply because these companies have always traded in ‘Union goods’ within the internal market… and what are ‘Union goods’ anyway?

It is hard to imagine, but a hard Brexit is potentially on the horizon. Both time and preparation time are starting to run out. It’s time to take action!

Gaston Schul has a “Brexolution” for all parties in the logistics chain (shippers, forwarders, transporters, importers, exporters, etc.). We can provide you with a solution for customs declarations (in the EU and the UK) and offer advice and training. With our 150 years of experience as an independent customs specialist, we can honestly say that, even in relation to Brexit: Gaston Schul; Customs & Trade in control!

What will change after Brexit?

What will actually change after Brexit? That depends, of course, on the final agreements reached between the EU and the UK (deal or no-deal, that is the question). If there is a hard Brexit, chaos would initially ensue, but to a certain degree, you can prepare for this too. The more obvious result is a (more) controlled Brexit, but that is by no means certain. Something that is more certain is that, in any case, you have to make a customs declaration if you want to transport goods across the border from and to the UK. After all, Brexit will result in there once again being a physical “customs” border between the UK and the EU.

In that case, if goods are transported to the UK from the EU, this would be considered ‘exporting’. You would then have to submit an export declaration for goods with a union status; this would require you to submit a declaration in the electronic system of a customs authority in the European Union. You would subsequently have to fulfil a number of other administrative obligations for the actual export of the goods. If you trade in veterinary or phytosanitary goods (fruit and vegetables, meat, fish or plants) you must have additional certificates. Are export control measures applicable? If so, the same applies. In short, it is quite complicated.

From a customs point of view, there are options other than export, for example, the transport of goods under the transit procedure, but in any case this would also require an administrative entry with the customs authorities.

Once the goods arrive in the UK, you must file a declaration there. This can be a simplified declaration (for import). In anticipation of Brexit, the UK has temporarily streamlined the process. Basically, it means that you declare goods using a simplified advance declaration and may then transport the goods to their destination, where the declaration is then completed. The details of this regulation aren’t yet clear, but it is certain that Her Majesty’s Revenue and Customs (HMRC) plans to levy import duties and VAT and wants to exercise control. A declaration is therefore required. In this case too, additional documents and/or obligations will apply, depending on the goods to be imported.

Not familiar with the subjects covered above? Don’t forget that we can do this for you!

What does this mean in practice?

Once again, what has to be done in practice depends entirely on the final agreements reached (or not reached) between the UK and the EU. However, a number of things are definite and you can prepare for these. Below is a list of the steps you should take.

1.What is your role in the logistics chain?
Are you an importer or exporter? Will you transport the goods yourself or contract someone to transport them? Do you engage the services of a customs agent who will arrange things on your behalf? Depending on your role, you should take measures.

2.EORI
If you plan to transport goods to and from the customs union (or arrange for others do so on your behalf), you must apply for an identification number at customs. This is known as the EORI number. This stands for Economic Operators Registration and Identification number. You use this EORI number to make declarations or have them made on your behalf, for example by a customs agent/forwarder. An EORI number speeds up the customs handling process. We advise you to request an EORI number if you want to export goods to the UK or import goods from the UK to the EU, regardless of your role in the entire chain. Below is a link with a further explanation and application options:

3. Identify which documents are needed to transport the goods to the UK.
To make a declaration, not only do you need declaration software but additional documents are also required. The documents depend on the type of goods you want to export. This would include, in any case:

Packing list

Invoice

Bill of Lading, CMR, CIM, etc

Certificate of origin

Health certificate

Phytosanitary certificate

ATA Carnet

Export license

Etc.

What do you know about the mandatory parts of the customs declaration

To be able to make a customs declaration, a number of things are important. It would take too long to cover everything here, but to get an idea of this, it is important that you are aware of the following three items:

    1. What is the product’s commodity code (the classification in the combined commodity code in customs terms)? The commodity code is a prescribed part of the declaration. This concerns the classification of goods in the nomenclature. This is a number sequence of 8 to 22 digits. The classification is determined on the basis of the classification rules. If there is no commodity code, there is no declaration. In fact, the commodity code must be correct, otherwise you will be making an incorrect declaration, which is a criminal offence. The import tariff also depends on the commodity code, therefore the tax implications can be significant. Using a standardised article database can help considerably when determining the commodity code. You would avoid having to reinvent the wheel every time you send repeat shipments.
    2. What is the customs value of the goods? Legislation outlines many ways of determining the customs value of goods. These are mandatory and have an order. Only by correctly applying the rules will you arrive at the correct customs value. A very important part of determining the correct customs value are the conditions (INCO terms) that apply to the trade transaction. These determine any costs to be added to or deducted from the customs value. It is therefore very important that you are familiar with the INCO terms and the significance of these for your goods.
    3. Originof the goods. You must state the origin of the goods in your customs declaration. Depending on this, for example, a preferential rate may apply. The origin must be proven with a certificate or a declaration regarding  the origin.

Not familiar with the subjects covered above?

We recommend that you appoint a specialist company to deal with customs-related matters on your behalf. Don’t forget that we can do this for you!