At this stage, no definitive decisions have been made as to where the UK will stand with regard to international trade regulations Post-Brexit, yet businesses are being urged to plan for consequences that leaving the union may have upon their operations come the 29 March 2019 (and beyond!).
The Prime Minister has repeatedly stated that the UK will not be remaining in the EU single market after Brexit but there are no further details of any checks or charges that could be implemented at this stage. So, what is the best way to plan for going forward?
There are a few points which could assist you in a smooth transition to the revised trade agreement with the EU, whatever form that may take:
AEO (Authorised Economic Operator Status)
It is definite that AEO, in one form or another, will still be relevant Post-Brexit as the protocol of the Union Customs Code will still be applicable.
Indeed, indications are that, should the UK fail to reach a Customs agreement with the EU come Brexit, AEO certification will become an absolute must for UK businesses wishing to trade internationally.
Goods transported under AEO status are subject to fewer physical and documentation checks, enabling a smoother transition through international borders.
With this being the case, even if a Customs agreement cannot be reached between the UK and the EU, goods imported into the UK from EU countries under AEO status should experience a smoother clearance than those being imported by companies who do not hold the accreditation. Similarly exporters are likely to experience a smoother transition of their goods from the UK into the EU, with the potential for clearance of goods whilst in transit for both imported and exported items.
You may also find it beneficial to utilise Customs simplified procedures, and for AEO certified companies, the application process is quicker. Holding the AEO accreditation also makes it easier (and cheaper!) to qualify. (If you’re not sure what the benefits of CFSP are, read on to find out more!).
Despite its advantages, applying for AEO status can be a lengthy process, which can be off putting for businesses in completing their application. Fortunately, if you are not yet ready, or don’t have the time to make your own application, there is the solution to take advantage of Velta’s AEO status.
CFSP (Customs Freight Simplified Procedures)
At present, with free movement of goods between the EU and the UK, no tariffs are applicable to goods being imported to the UK from Europe. But what if the UK fails to reach a Customs agreement with the EU and additional Customs duties & VAT are applied?
Under CFSP you will be able to import goods for distribution in the UK and defer duty and VAT payments until stock is sold. Any duty and VAT payable is made on an item by item basis and deferred to the month after each item is sold. Great news for business! Stock is immediately available for dispatch, and company cash flow can be increased as no import duty is payable against stock that remains in storage.
Even if the EU and UK reach an agreement whereby additional tariffs are not added, CFSP is advantageous to businesses importing from countries outside of the EU for distribution in the UK, such as the Far East.
Need your goods a little faster? Then CFSP can also be beneficial in the transportation process in providing an accelerated release. Following completion of a Simplified Frontier Declaration (SFD) to a Customs procedure containing minimum details, you may remove goods from the frontier.
Seek the expertise of a freight forwarder
The World of Customs procedures and international business regulations can be a baffling one. Luckily, appointing a reputable freight forwarder can help you to overcome any confusion. Through utilising a company such as Velta, you can tap in to the knowledge and experience of the freight forwarder who are well versed in the Customs and trade regulations with the EU and beyond, and able to offer methods to improve efficiency and decrease supply chain costs, whether you are involved in the import or export of goods.
Like everyone else, we are waiting on an announcement from the government as to how things are set to pan out. Certainly though, we will be able to assist you in a smooth transition as and when further details become available.
Speaking of which, whilst we all await the next announcement with how Brexit will pan out in relation to international trade processes, why not check out our article about the new Customs Declaration Service that is being launched. After all, if you don’t currently have to complete Customs declarations on your EU-UK imports or exports that may be due to change in the not so distant future…