While the UK and EU continue Brexit negotiations, Britain’s exit from the European Union (EU) is expected to cause significant disruption and cost if shippers are not prepared. With the transition period concluding December 31, 2020, here’s what you can expect and how to prepare:

Overview – What if UK and EU Don’t Reach a Deal on Trade?

The EU and UK continue to negotiate the terms of how trade will flow; customs enforcements, quotas and tariffs will be handled; but there is still much to be decided and implemented by Dec. 31. Whether a trade deal will be reached before the deadline is uncertain.

How to Prepare – Review and assess the impact of the World Trade Organization tariffs on your products. Research UK programs related to the suspension/postponement on the outlay of duties and taxes.

Customs Import Declarations

Effective January 1, 2021, all shipments from the EU to the UK will require a UK customs declaration. For imports where the UK importer is a registered consignee – trade will flow as normal and VAT will be deferred. All other shippers, including those that redistribute to the EU, will need to prepare accordingly.

How to Prepare – Although shippers will have up to six months to complete an import declaration and duty/tax payments, delaying the declaration can create an administrative backlog. Review your import documentation to ensure you have the required EU/UK EORI numbers and provide all information necessary for smooth clearance of your goods. UK tariffs that will be effective Jan 1, are found here.

Export Declarations

All shippers exporting goods from the UK to the EU will be required to submit export declarations. The safety and security information can be submitted on a combined export declaration or on a standalone Exit Summary Declaration. Note an entry declaration would need to be processed for the recipient in the EU and VAT applied at the EU member’s state rate.

How to Prepare – Advise if you or your customer are registered in any of the EU countries so the most cost effective entry point can be assessed. Note that some EU recipients may be able to claim back VAT.

Expect Delays at the Borders

It is anticipated that in the first few weeks following the Jan. 1 Brexit, there will be delays at the borders in southeast England due to incorrect post-Brexit documentation.

How to Prepare – Review your trade lanes and port of entry/exit to ensure you have appropriate paperwork in line to mitigate delays. Note all trade documentations should include: Commercial Invoice, packing list and certificates will require important data elements including value of the goods, HS codes and product description.

Note that the UK Government announced full border controls on goods entering the UK will not apply until July 2021. The government will implement border control and health checks in three phases:

Phase 1 – Jan 1, 2021: Full tariffs and checks on controlled goods

Phase 2 – April 1, 2021: Health checks on products of animal origins

Phase 3 – July 1, 2021: All goods are subjected to import declarations and tariffs.

Not only will tariffs be subject to change if any free-trade agreements are signed, but trade processes and procedures could change based upon the outcome of the ongoing Brexit negotiations. It is likely that if any deal is reached, it will not occur until close to the deadline, so it is crucial that you review your EU/UK supply chain now in preparation.

Sources: U.S. Commercial Service, U.K. Government, Mallory Alexander Global Network, M-PACT Solutions