8 April 2019

Brexit: Consequences on customs activities

The United Kingdom could leave the European Union, shuffling the cards of existing commercial relationships with member states

 

The UK could potentially leave the European Union, saying farewell to the European Single market and the European Customs Union.

Britain’s exit could either take place without a transitory period, be cancelled or eventually be further extended. In the case of a Hard Brexit – which can take place if no negotiations are signed between UK and the EU – tax and customs legislations could jump back to a pre-1993 framework. As an instant result, goods entering and exiting the UK would be immediately subject to VAT and import tax.

A Hard Brexit would not only have a financial impact; it could in fact change the current trade procedures too.  If the UK loses its status of member state, customs procedures will be increasingly complex and bureaucratic, unlike the simplified and centralized procedures that currently take place between EU members. Specific and bespoke customs declarations will have to be submitted for all import and export operations leading to financially cumbersome operations (which greatly depend on possible provisions set up by the UK).

All AEOs (Authorized Economic Operators) authorized in the UK could no longer benefit from the EU’s trade scheme, and all import/export procedures with the UK will be treated as operations held with third countries (i.e. China, US etc.). All authorizations granted in the UK territories could be considered invalid if no other agreements are signed. 

Goods imported from the UK will be subject to customs tax and VAT, with collection of duties upon clearance of every single operation, and unique health & safety and quality regulations could eventually arise for import processes – and they might not be in tune with the ones existing between EU states.

 

The European Commission has already started sending out notifications to cargo owners, inviting them to take note of possible outcomes of a “Hard Brexit” and to act accordingly.

Contship Italia is a pioneer in containerization since 1969, acting as a trusted business partner in the global supply chain. Contship RHM terminal situated in Melzo (AEO) can offer customers and partners all necessary assistance both in terms of customs procedures and for handling cargo in dedicated bonded warehouses.

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