The UK left the EU at 11.00 pm (UK time) on 31 January 2020 (exit day). Under the terms of the UKEU withdrawal agreement the movement of goods between the UK and the EU remained unchanged. The post-Brexit transition period ends at 11.00 pm (UK time) on 31 December 2020 and it is clear will not be extended.

Given the questions over whether a free trade agreement (FTA) will be agreed between the UK and EU in time, the implications of exit day for UK business are enormous. This article provides an overview of the impact on arrangements for the flow of goods from the UK to the EU after exit day. An FTA will doubtless affect some of these requirements.

Customs declarations
From 1 January 2021, when moving goods from the UK to the EU, customs export declarations and safety and security declarations (S&S) will be required. These will need to be filed in the UK and EU. Businesses can attend to these themselves though it is anticipated that agents will be engaged for the purpose. If you opt to do this yourself, check that you have the appropriate software and access to the relevant systems.

Consider applying for an Authorised Economic Operator status to reduce border delays for deliveries.

Duties
Check arrangements for payment of customs duties, VAT and other taxes which may become due.

Consider applying for a Duty Deferment Account (DDA). The DDA allows you to pay customs duty, excise duty and import duty on a monthly basis instead of on individual consignments.

Customs Agents
Consider appointing a customs agent to deal with the customs formalities. As explained above, if you opt to do this yourself, check that your software is adequate to submit declarations electronically.


EORI number
Apply for EORI number. Following exit day, businesses that want to export to the EU will need an EORI number.


WTO Rules
In the absence of an FTA trade between the UK and EU would revert to Word Trade Organisation (WTO) rules. These are a series of multilateral agreements which came into force in 1995 under the aegis of the WTO. Its framework has two principal elements: the General Agreement on Tariffs (GATT) (applicable to goods) and the General Agreement on Trade in Services. The only general restriction on trade in goods is tariffs (a border tax on imports). Almost all nations have capped tariffs for most products; the EU has a common external tariff applicable to imports from WTO members with which it has no FTA or customs union.

It is likely that in the event of a no deal the EU and other countries will continue in the short term to trade with the UK in goods on the basis of the WTO rules.


Contracts
Exporters should review their terms and conditions of supply. The key contractual areas to be considered include:

• change of law

• termination

• enforcement

• currency fluctuation (protections should be considered e.g. hedging arrangements)

• delivery dates

• responsibility for import/ export procedures

• price adjustment (to pass on changes to the costs of manufacturing and supplying)

• tariffs — where possible you should identify the unique international identifier codes of your products and the corresponding tariff. The cost implications should be identified and taken into account when calculating costs and pricing

Businesses should also consider incorporating INCOTERMS into their contracts. These are a standardised set of international trade terms published by the International Chamber of Commerce that traders based in different countries can choose to incorporate into contracts for the sale of goods. Intended to be jurisdiction-neutral (i.e. no jurisdiction or legal system is favoured over another), these terms allocate responsibility between the buyer and seller in respect of several key matters e.g. location of delivery, packaging and marking, the transfer of risk in the goods, responsibility for carriage and loading/unloading of the goods and responsibility for export and import clearances.

Customers
Your EU customers will also need to be ready for exit day. You should check that they can make the necessary import customs declarations and depending on the nature of goods you are supplying, they may also need a licence or certificate to import those goods.


Permits
You should establish if any new export licences or permits are required. Indeed a review of all approvals, certificates and qualifications should be undertaken and where possible obtained ahead of exit day (e.g. see EORI numbers above).


Storage
Stock and storage requirements should also be considered.


Funding
Consider the impact of exit day on any EU based grant or other funding which you or any of your customers has received.

Origin of goods
UK businesses will need to ensure country of origin of goods is clear where components of final products derive from the EU.


Staff Training
It will be important to identify member(s) of staff who can assume responsibility for customs/export training.

Check whether your business needs to take any steps to register any EU citizens who are working in the UK. The UK's new immigration regime will operate from exit day.


In Conclusion
Given the amount of time remaining before exit day it would seem that any FTA is likely to be light and many of these issues will continue to be relevant to UK exporters.

Please contact Johnathan Rees if you would like to discuss any of the issues raised in this article.

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