Brexit Bitesize – What about the origin of imported and exported goods?
You would be forgiven for thinking that the uncertainty surrounding Brexit has come to an end. While Brexit is now a surety, the details of the future trade deal between the UK and the EU are much less clear. If the Brexit Bill is passed in Parliament and approved by the full European Parliament before the end of January, the EU Transition Period will begin on 1 February 2020, ending on 31 December 2020. That leaves an ambitious timescale within which the UK and the EU need to agree on their future trading relationship, with many commentators expecting only the bare minimum being achieved within that time.
There is still the possibility of a no-deal Brexit at the end of 2020 and, if a deal is agreed, there will inevitably be several details still to be decided. Exactly what those are will hopefully become clearer in the coming year. Until then, there are still several issues that businesses should be considering and preparing for now.
There is uncertainty around the effects of Brexit on country of origin, which could have critical implications for businesses supplying to customers that require goods with European origin.
Rules to establish the country of origin of imported and exported goods help to determine the rate of duty and customs conditions for those goods. Customers often require a particular country of origin for goods they are purchasing to meet their (or their customers’) requirements to ensure qualification for lower or nil customs duties for onward supply.
Leaving aside for the moment the vexed issue of potential tariffs and border delays for UK-EU trade if Brexit comes to pass, businesses need to be aware that it is still unresolved whether goods wholly or substantially produced in the UK will lose their European origin status. This will almost certainly be the case if the UK leaves the EU with no-deal (at the end of 2020).
All businesses whose customers require European origin of the goods being supplied should now be considering their supply chains, their importing and exporting procedures and production processes to determine any risks in this area. Expert advice should be taken to identify ways to minimise any possible adverse impact.
Defining the origin of goods can be complex, particularly goods whose production involves materials or components from more than one country. We have strong links with the Sheffield International Trade Centre who can provide specialist advice on this topic and who can help businesses to prepare and to ensure that they remain compliant with importing/exporting procedures and requirements.
If you have any questions about the latest Brexit updates, or you would like advice on this issue, please contact Carys Thompson at firstname.lastname@example.org or call Carys on 0114 252 1485.