UK Government publishes technical note on trade impact of a “no deal” scenario
Although still confident that a deal will be reached, the UK government published last week several (on 80 expected) technical notes for a “no deal” scenario, of which one deals with the trade impact under a “no deal” scenario. Read the full report here.
In essence, the technical note points out that under a “no deal” scenario all the trade between the EU and the UK will become import/export transactions with the related customs consequences.
The technical note summarises said consequences as follows:
- The need to file customs declarations, which implies the classification of the goods, origin determination as well as customs valuation of the goods;
- Customs compliance related obligations like the application for an EORI number, the review of the used Incoterms, the export control regulations;
- The UK expects to apply its own tariffs, and an independent trade policy, for goods intended for consumption in the UK – this means the risk of double taxation of customs duties and free trade agreements signed by the EU will no longer be applicable to UK’s exporters as well as UK’s long term suppliers declarations for EU exporters;
- Safety and security checks at the border with the related impact on lead times.
Besides said consequences the UK Government also points out the benefits of the use of following customs procedures, to soften the customs compliance obligations:
- Customs warehousing
- Inward processing
- Temporary admission
- Authorised use
It goes without saying that a “no deal” scenario will have major trade consequences. Although the negotiations are still ongoing, a first impact assessment of a “no deal” scenario is recommended as 29 March 2019 is approaching fast. So please do not hesitate to contact us to further discuss the potential impact of a “no deal” scenario on your company and business.
Lionel Van Reet Claire De Lepeleire
Partner Customs & International Trade Director Customs & International Trade