Your questions answered.
These pages seek to provide comment and advice on numerous functions and activities that form the complexity of the supply chain by way of 'frequently asked questions'. We hope that these will assist the various stakeholders in navigating the changed landscape they could face.
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Because of a 2016 referendum, The United Kingdom of Great Britain (“GB” ) and Northern Ireland (“NI”), (“the UK”) voted to leave the European Union (EU), in doing so; it also agreed to leave the EU’s Single Market and Customs Union. The Treaty signed by the EU and the UK on 24 January 2020 although titled Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, has unofficially been abbreviated to The Brexit Withdrawal Agreement or Brexit. This Treaty was enacted in the UK by the European Union (Withdrawal Agreement) Act 2020 and resulted in the UK officially leaving the EU on 31 January 2020. However, although “Brexit” has already happened, its effects have yet to be felt because the Transition Period agreed by the UK and EU maintains the pre-Brexit status quo until 23.00 (GMT) on 31 December 2020.
As a result of Brexit, there will be significant changes to the current processes of moving goods between GB and EU. All stakeholders involved in the cross-border movement of goods will need to be aware of the changes, make all necessary decisions and complete all administrative actions at the earliest opportunity to avoid unnecessary disruption. As freight forwarders and customs brokers handle the majority of transport and customs formalities, they will be pivotal in ensuring the seamless flow of goods between the EU and GB from 1 January 2021.
The UK is now in a transition period, during which many negotiations with the EU are taking place. These include trade discussions. The transition period is set to end on 31 December 2020 at 2300 (GMT). Regardless of any agreements made during this period, there will be changes to the way goods are moved between GB and EU once the transition period ends.
After the transition period, GB will impose controls on goods moving from the EU to GB, in a model similar to how it handles Rest of World imported goods. These controls will be introduced in three phases over a six-month period from 1 January 2021.
For movements from GB to EU, full declarations will be required from 1 January 2021 - the approach will not be phased.
In so far as NI is concerned, as things currently stand, the NI Protocol will take effect after the transition period. Please see below for further information about the NI Protocol.
An EORI number is a unique identification code used to track and register customs information in the EU. If you are a VAT registered business, you may have already been assigned an EORI number automatically. The format of the EORI number is constructed of a country code, showing where the business of individual is registered followed by a unique code or number. For example:
- For VAT registered businesses – GB + VAT registration number + 000
- For non-VAT registered businesses – GB + a unique number issued by HMRC
You can use the tool here to check/validate your EORI number.
This will depend on your business model and with which countries you trade. In some cases, businesses based outside of the EU but trading within Europe will require an EORI number.
If you do not apply and obtain either a UK or an EU EORI number, when shipping goods between GB and EU you may experience delays that lead to increased costs. For example, if HM Revenue and Customs (HMRC) are unable to clear your goods you may have to pay storage fees.
There are resources that can be used to verify which goods require SPS controls. Provided that you have the correct commodity code, you can verify any requirements here.
The UK Global Tariff took effect after the Brexit transition period ended, the published list having been issued on 31 December 2020. The UK Global Tariff applies to imports where goods do not fulfil the rules of origin requirements.
No, the new UK Global Tariff is not currently in operation and will not come into force until the end of the transition period. Until the end of the transition period, the current EU Common External Tariff continues to apply.
Each individual consignment within a groupage cargo transport unit (CTU) must have cleared the relevant requirements for those goods to be imported. This includes the core requirements along with any additional requirements. The clearance of the entire groupage load is dependent on this. In practice, one carton which does not clear, has the potential to hold up an entire trailer load of groupage imports. It is critical that extra care is exercised to ensure that all requirements are met for each and every consignment to avoid delays and/or compliance action.
The Northern Ireland Protocol is a practical solution to avoid a hard border with Ireland whilst ensuring the UK, including Northern Ireland, leaves the EU as a whole, enabling the entire UK to benefit from future Free Trade Agreements. There will be special provisions that apply only in Northern Ireland while the Protocol is in force. The final agreement on the Protocol on 17 December 2020 means that there will be no change to the movement of goods covered by the Protocol between NI and the EU Member States including Ireland. There will be no new paperwork, no tariffs, quotas or checks on rules of origin; nor any barriers to movement within the EU Single Market for goods in free circulation in Northern Ireland.
The Northern Ireland Protocol will take effect at the end of the transition period from 1 January 2021.
Certain goods will only be permitted to enter Great Britain through specific ports/BCPs where physical checks and the taking of samples will take place. Stakeholders should take steps to understand whether the goods they are shipping/handling are affected and engage with their customers to explore how these goods will be handled. Consideration may be required in terms of shipping routes, additional costs and potential delays through the existing supply chain.
The Goods Vehicle Movement System (GVMS) is an IT platform which supports the pre-lodgement border control model. The GVMS will generate a unique Goods Movement Reference (GMR) for each vehicle that will need to be presented by the driver prior to boarding and will allow:
- Declaration references to be linked together so that the person actually moving the goods (haulier) only has to present one single reference (Goods Movement Reference (GMR)) at the frontier to prove that their goods have pre-lodged declarations.
- The linking of the movement of the goods to declarations, enabling the automatic arrival in HMRC systems as soon as goods board so that declarations can be processed en route.
- Notification of the risking outcome of declarations (i.e. cleared or uncleared) in HMRC systems to be sent to the person in control of the goods by the time they physically arrive so they know where they need to proceed to.
Several EU ports are proposing to use similar systems.
"Prohibited goods" refers to goods that cannot be imported. In some cases, there may be limited circumstances, known as "derogations" where prohibited goods can be imported. Any derogations from a prohibition will be listed in the UK tariff. Further information can be found on the UK government website.
It would be prudent to undertake a review of any contract that applies to the movement of goods cross border between the EU and UK to ensure that they remain relevant after the end of the transition period. References for example to EU Law or the UK being a Member State of the EU should be of particular interest and might result in the need to revise the contract terms. While there might be risks connected to the legality of the terms, where for example the UK is no longer considered a Member State of the EU, operationally stakeholders could consider the geographical reach of the contract and which party would be considered liable for any additional costs that might be incurred.
CMR notes will continue to be the required consignment note for goods shipped cross border between the EU and UK. However a little more thought will be required (than is common practice today) when completing these documents, a greater level of care for example will be required in connection to the description of the cargo being shipped. The expectation will be that the description of the goods on the CMR note will match that contained within other required cargo related documents. It should be highlighted that there are likely to be more frequent checks by authorities and completeness and accuracy will be important.
The information contained on this web page has been compiled from various sources, and are not a substitute for professional/legal advice. We do not accept responsibility for loss or damage which may arise from reliance on the information contained herein.