As with any new regime, there are the inevitable teething problems as everyone gets up to speed with the changes. There have been delays at the EU borders with the most common problems being missing or incorrect documentation, software glitches and lack of capacity.
Here are some of the other challenges we are seeing:
- There’s a shortage of customs agents. CHIEF export declarations need to be submitted before goods depart for the port. However, traders are struggling to find available customs agents. For those exporting to non-union countries via the EU, a T1 declaration is needed and not all customs agents are authorised to do them so the situation is challenging.
- There is a lack of awareness of REX rules where EU based traders with consignments valued over €6,000 must be Registered Exporters (“REX” traders) in their country. Northern Ireland based traders must be registered as REX here in the UK. Here’s the link for more information
- Safety and security declarations are now required for exports and will be needed for imports from 1 July 2021 and not everyone is up to speed on these yet. There’s more information on what the requirements are here
- Traders are unaware that for certain goods they must register with various regulatory bodies in the UK and EU.
- Freight agents are demanding VAT and duty because of misunderstandings over the Postponed VAT accounting and origin issues
- Statements of origin documentation can’t be processed because the software isn’t up to date. There is also confusion over what language they should be in and a lack of understanding of the Mode of Transport.
It will no doubt take some time for everyone to adjust, and with some of the rules still to be fully enforced, we could see a few more bumps in the road ahead.
The hidden costs of the free trade deal
Goods with an origin outside the EU or UK are more often than not subject to tariffs. In order to benefit from preferential tariffs, exporters must produce statement of origin documentation. These can be complex when, for example, goods made from both non-originating and originating materials need to be specified and the proportion of non-Originating materials (“NOM”) determined. Businesses are facing an increasing admin and red-tape burden. It’s worth noting that under the deal, the UK or EU can unilaterally impose tariffs to level the playing field if, for example, the other side were to grant subsidies to a particular industry. Although ideally they would give around 45 – 60 days’ notice, tariffs can be imposed with immediate effect. Negotiations with the EU will likely continue for years to come.
Take care – mistakes can be costly
Missing or incorrect documents at the border can mean goods are turned away and re-exported back to the UK – at your cost. Here’s a checklist to help you avoid the most common mistakes:
- Do you need an Entry Summary Declaration? (ENS/safety and security)
- Is your EORI number valid and correct?
- Have you made sure your documents do not contain references to the previous customs arrangements?
If exporting food, or goods of animal or plant origin, check that your SPS documents are present and correct, you’ve pre-notified the Border Control Post of the arrival and booked an appointment for inspection.