Brexit and customs – companies need to know this now

On the roadshow “Brexit und Zoll“, customs informed the economy about changes in the upcoming Brexit. O&W Attorneys at Law were also represented at the event.

The event took place on Friday, 9 November in the Hamburg Chamber of Commerce on the initiative of the German Foreign Trade Association, the Bundesverband Großhandel, Foreign trade, Services e.V., the Association of German Chambers of Industry and Commerce as well as the German Haulageand Logistics Association e.V is taking place. The event in Hamburg was part of a nationwide lecture series on the topic of Brexite

Various lectures tried to explain the manifold possible consequences of the probably forthcoming Brexits and to throw the first possible solutions into the room. It was interesting to note that the consequences for shipping companies as well as for logisticians and the customs administration were discussed.

What will be the main consequences of Brexit?

  1. With a hard Brexit, Britain will be a “third country” like other countries outside the EU
  2. In the case of a hard Brexit, there will be a customs clearance wave, so that delays at airports and seaports can be expected
  3. The customs administration will control exports and penalise infringements in the same way as for exports to other third countries
  4. Companies need to build up customs expertise, especially if they have so far only acted on the internal market
  5. The correct customs tariff numbers and the origin of the traded products must be clarified
  6. An EORI number will be mandatory and should be applied for now
  7. It would be better if supplier’s declarations were only issued for a limited period of time today

Top-class speakers from customs on Brexit

Top-class speakers could be won for the roadshow. The moderation took over Mr. Axel Rostal ski from the Department of Foreign Trade Policy and Law of the Hamburg Chamber of Commerce. Also represented were the Federal Ministry of Finance, the Directorate General of Customs, the Hamburg Ministry of Health and Veterinary Affairs and the German Freight Forwarding and Logistics Association.

Each speaker described his or her view of the Brexiteand highlighted his area of expertise.

In his greeting Arne described OlbricHead of Foreign Trade Policy and Law at the Hamburg Chamber of Commerce, the current interim report of Brexite and made it clear once again that so far, in the absence of a withdrawal agreement, it would still not be safe,how companies, logisticians and customs would have to behave with the expiry of the leaving date. In case of a hard BrexiteA withdrawal without the agreement of a transitional period would probably lead to enormous disruptions in the movement of goods and supply chains. In particular, he pointed out that smaller enterprises (SMEs) are also affected by the Brexite could be confronted with problems, as they could be confronted with the task for the first time in March 2019t ein a third country of the Union To trade, they should have business relations with Great Britain

State of negotiations

In her lecture Mrs. Karolin Abel, Federal Ministry of Finance, took up the opening words of Mr. Olbrischand reported on the current state of negotiations. Thus it knew to report that up-to-date still in vain for a break-through in the Northern Ireland controversy one waited and ever more restaurant economics the Exit from the Brexite“…would suggest.

However, she was positive that a Brexit agreement between the European Union and Great Britain was about to emerge, at least on a factual level could. Even if such an agreement were to be finalised, the British hardliners would still be faced with the question of whether the British Parliament would actually ratify such an agreement. Nevertheless, she also pointed out again and again that the danger of a hard Brexits without an agreement.

Youreported that, according to information from the Federal Foreign Office, the EU had probably called on all Member States to draw up ’emergency plans in the event of a hard Brexits to develop. In Germany, information on such a plan is expected to be announced in mid-December. This contingency plan would probably address in particular issues of nationality, freedom of movement and recruitment within the customs administration.

In case of a hard Brexits is a customs clearance wave and the creation of customs clearance hotspots at airports and seaports to fear. In this case, it is expected that there will be an additional need for trained staff for the customs administration of almost 900 customs officials.

Ms Abel also emphasised once again that, in view of the deadline which was soon to expire, all parties involved, i.e. both the customs administration and the companies and logistics sector, urgently needed planning security for Brexit

Rumour has it that Theresa May gave the go-ahead for negotiations on Britain’s retention in the EU customs union or in a new customs union. However, nothing is yet known about the current state of negotiations.

Theresa May put forward the idea that the EU and the UK could possibly agree on a transitional period until the end of 2020, as the UK would still be involved in the European Union budget until then. As with most points within the topic Brexit,but even this is just an idea. Should the parties concerned be able to agree on such a transitional period, the entire Union law would probably continue to apply unchanged in Great Britain for the time being. This would mean that all customs arrangements would also remain unchanged for the time being and that all parties would have to wait longer before to adjust to a new customs law. Whether Great Britain would like to agree on such a transitional period, must be waited however, because as pure “rule-taker” they would no longer have a say in Union legislation

In case of a hard Brexits however, the Union Customs Code (CCC) with all its provisions would be ArrangementsThe EU would not expect customs officials to relax customs controls simply because the UK is a former Member State of the Union. In particular, because this is about funds for the EU budget, the controls would be as strict as for any other third country in the Union

With regard to the subsequent arrangements for the relationship between the Union and Great Britain, she said that the Union currently wanted a free trade agreement with Great Britain. The problem, however, is that Great Britain neither guarantees the free movement of persons, nor pays into the EU budget, nor does it comply with case law of the ECJi want to acknowledge. The UK’s relationship as it sees it would therefore lag behind the EU’s relations with Norway and Switzerland, and Britain would be no different from a third country such as Canada or Japan, so that we would have to prepare for difficulties in this area as well. In a white paper, Great Britain had called for a single market only for goods. The fundamental freedoms of the Union cannot, however, be of each other be separated

Brexite for forwarding agents and logisticians

About the problems of the Brexits hans-Peter spoke from the point of view of forwarders and logisticians Grave, Customs Manager of Hellmann Worldwide Logistics.

Brexit for freight forwarders – these are the consequences

  • Increased demand for personnel
  • Time delays
  • Necessity of customs clearance
  • no binding date commitments possible
  • More need for trained personnel and also for customs software

He began his lecture by pointing out that, in his opinion, it was in the area of the Brexits would only give question marks and still no exclamation marks In any case, the advantages of the common market would be lost for all sides. It was also a step backwards that all customs procedures had to be re-imposed. A step back to the point before the completion of the internal market.

For the logistics industry, he considered the increased demand for personnel and the massive delays that could result from the necessity of customs clearance to be particularly problematic. Customs procedures would tie up a large amount of loading material. Whether tractor, trailer or cargo hold – all material resources would become scarce and thus more expensive. He also held out the prospect that in the worst case scenario deliveries to Great Britain might no longer be profitable at all due to the high commitment of material and personnel resources, and that logistics experts might no longer be able to make binding delivery commitments.

In addition, the fact that smaller companies, which previously only traded on the internal market, would now have to become active in third-country transport would increase the need for trained staff and customs software.

He put an idea into the room to process export customs declarations for goods to Great Britain at the exporter’s headquarters in order to prevent the formation of customs hotspots. In addition, the United Kingdom must be involved in the Union transit procedure, since otherwise each consignment, even small consignments, must have its own shipping document.would be necessary. An effort that is difficult to manage

He insisted on a solution that maintains logistical flexibility.

No transitional period of the duty for the Brexit

Mr. Marko Uhl from the General Directorate of Customs of the Directorate V also sees enormous problems of delay within the supply chains.

He advised companies trading outside the Internal Market for the first time to urgently start to look at the Application for an EORI number and access to the ATLAS procedure. Such access would become relevant for customs declarations

He also recommends that companies already take precautions to avoid the To take care of pricing of their goods and determine the origin of its own products. It can also make sense to have the authorization changed or rewritten now as \”Authorized Exporter”. However, this depends on the The design and scope of the own authorisation.

”There will be no grace period for companies once the Brexit is completed. Customs regulations will have to be complied with from that day on.”

At the time of withdrawal, a high administrative burden and waiting times were to be expected. How long it would take to apply for such an approval could not be foreseen at this time At the working level, the Commission had probably admitted that it was currently working on an emergency plan concerning authorisations and simplifications. However, concrete details have not yet been revealed, particularly in order not to weaken the Union’s negotiating position.

With a view to simplifying procedures, it may also be worthwhile to submit an AEO-S or an AEO-C application now, as the processing of these applications would already take some time.

Similar to Mr Grage, mr Uhl also saw it as urgent that the Union and Great Britain agree on a common transit procedure. In May, Great Britain expressed interest in acceding to the Convention on simplifications in trade in goods and the Convention on a common transit procedure. The other 27 Member States have so far done their utmost to prepare for accession to this international agreement. However, the EU still has to formally invite Great Britain to join. After the invitation, Great Britain will then have to prove that it is actually in a position to participate in this agreement. However, the United Kingdom still has problems with the provision of the necessary material resources.

The public raised the question of whether companies could expect some kind of transitional period for Brexit through customs, during which breaches of obligations in trade with GB would be punished more mildly and leniently. Mr Uhl replied to this with a clear no.

Preferential origin issues, prohibitions and restrictions

Angelika Lorenz from the Directorate General of Customs gave a lecture on the subject of preferential origin, prohibitions and restrictions.

She pointed out that, according to the current situation, no preferential treatment was possible due to the lack of a preferential agreement between Great Britain and the EU. The consequence is that Third country duties would have to be paid in full

Since there are still no regulations on preferential origin at the moment, raw materials from Great Britain would also have to be classified as possibly critical at present. In the future, there could also be Be– the processing of Union goods in Great Britain can lead to a product losing its EU origin

It would also have to be expected that there will be problems with regard to supplier and long-term supplier declarations, as there is as yet no information on how to deal with the Brexite supplier’s declarations issued. For companies, it might be appropriate at present to limit such declarations to the date of departure with regard to Great Britain. There is still a risk that goods originating in Great Britain will become nonunion goods after they leave the country. However, the problem of this complex of issues has been recognised – the Federal Ministry of Finance last week sent a comment to the Commission in this regard.

As a precaution, it may currently be advisable to mark goods from Great Britain in the warehouse so that they can later be distinguished from other third-country goods.

With regard to export monitoring, the situation will improve possibly soon be designed in such a way that the customs authorities fully monitor the movement of goods from the UK with regard to all existing bans and restrictions in order to maintain the European level of protection. Great Britain would then examine Union goods against its own British bans and restrictions. What these would look like is not yet foreseeable. However, in a memorandum of understanding, GB has stated that in particular the technical standards and the generally high level of protection of the EU should be maintained. Nevertheless, divergences are also conceivable in this respect.

However, it was to be expected that the submission of permit and accompanying documents could possibly become necessary

So far, the shipment of dualUseGoods to Great Britain without a permit. In case of a hardBrexitswithout a withdrawal agreement or transitional period, however, deliveries to Great Britain would no longer be a shipment but an export of these goods to a third country This would result in an obligation to obtain a permit under the jurisdiction of BAFA. An export declaration would also have to be submitted. It would be conceivable here that, in terms of effective risk management, the company would in future have to pay for deliveries of dualUse-Goods to GB a manual release by pass through customs must. This could lead to long time delays. Just-in-time deliveries would be virtually impossible.

Repercussions on current Customs procedures and transit goods

Problems can also be expected if goods are still in transit between Great Britain and the Union on the date of departure. In the case of the hard Brexitsthis Automatic movement of goods to the Third-country traffic will be. At working level, the Union is probably also working on an emergency plan in this respect, but it has not yet announced anything concrete in order not to weaken its own negotiating position. The aim here must probably be to end a process that was begun under Union law, then also under Union law.

In summary, it can therefore be stated that, with regard to the Brexits there are still many question marks and hardly any exclamation marks. It is highly desirable for all parties that Britain and the European Union can agree on an agreement or at least agree on a transitional period. The uncertainties will probably only disappear in the coming months and years.

 

Lawyer Dr. Tristan Wegner

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