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The Brexit trade deal: where are we now?

11 Feb 2021

The Brexit trade deal and new EU trading rules have caused much confusion and delays with exports into Europe. Hallmark Consumer Services explains the new rules and what businesses exporting to the EU need to do to help ensure a smoother delivery process.

New EU trade laws came into effect on 1st January 2021 after the UK struck a Brexit trade deal with the EU at the eleventh hour. With the deal coming so late in the day, businesses and carrier networks had little time to prepare, which is why we’ve seen significant delays at the ports. The main cause for the delays has been due to incorrect paperwork at customs.

Big Ben, BrexitWhat does the Brexit trade deal mean for you?

The UK and the EU have agreed that there will be no tariffs or quotas on the movement of goods produced in the UK. However, if you import a product from, say, China and then export it to the EU, you will be subject to tariffs. This is because of the country of origin. Goods must have originated from the UK to avoid the tariffs. Local VAT rules still apply.

Strict EU laws on animal food products also means that some UK products can no longer be exported. For example, uncooked meats like sausages and burgers can’t enter the EU unless they are frozen to -18C.

What paperwork do you need to provide to export to the EU?

To avoid unnecessary delays at customs it is critical that the following data is provided on all consignments:

  • Sender telephone number and email
  • Item details (detailed, technical description, quantity, weight and value of contents)
  • Country of origin of the goods
  • Postage and insurance costs
  • Trade Tariff code
  • Recipient telephone number and email address
  • Importer details
  • Importer EORI Number (this is needed for trade orders)
  • Custom declaration forms
  • Commercial invoices

Hallmark is working closely with both our parcel carriers and our clients to make sure that all the required data is supplied and processed correctly before any shipments leave our fulfilment house.

Why are there still delays at the ports?

Despite best efforts, it was inevitable that there would be some delays to shipments into the EU following Brexit. Frustratingly, because the Brexit trade deal wasn’t struck until the very last minute, carrier networks have had to play catch up to get the required systems and processes in place to allow the correct data to be passed to customs. Incorrect paperwork and lack of details was one of the main causes for the delays. Following the above guidelines should minimise any further delays.

Another reason for the delays was due to the Coronavirus pandemic. Getting essential PPE into the UK was prioritised (and rightly so), but this meant the UK ports became congested and caused delays with getting containers through customs.

There was also a rush to get goods to and from Europe before January 1st which added to the congestion. The ports are now moving again, but it’s taking time to work through the backlog.

Our advice to businesses is to allow extra time for goods to get to Europe – we can help with ensuring that the correct paperwork is in place to avoid unnecessary delays, but we have to be patient with other factors that are out of our control.

Avoiding further delays

In addition to getting the correct paperwork in order, it is also critical to agree who is responsible for paying any tariffs before the goods are shipped – the exporter or the importer. Being upfront with customers and trading partners and agreeing the terms early on will avoid further delays at customs as well as disputes. Hallmark has worked with a German fulfilment partner for a number of years who can help clients who wish to have European-based fulfilment.

Ireland and Northern Ireland trading

As part of the Brexit trade deal there is currently no hard border with the Republic of Ireland. Northern Ireland will stay in the EU single market for shipments to/from the EU27 countries. This means that there will be no clearances, tariffs or restrictions on trade in either direction. It also means that Northern Ireland must align with certain EU rules such as the shipment of agri-food and industrial products.

Goods shipped from Great Britain to Northern Ireland will be subject to customs declarations but will be tariff-free unless they are deemed to be ‘at risk’ of ending up in the EU. In this case, any applicable EU tariffs will apply. UK authorities can reimburse businesses if the goods are later proven to have stayed in Northern Ireland.

For further guidance, and to check if the goods you are shipping from Great Britain to Northern Ireland can be declared as not ‘at risk’ of onward travel to the EU – for example if they are eligible under the UK-EU Trade and Cooperation Agreement (TCA) – visit the UK government website.

If the rules are exploited to avoid paying tariffs, then this could lead to a hard border being enforced in the future.

For trading outside of the EU, Northern Island remains part of the UK’s customs territory and will benefit from any free trade agreements the UK signs with other countries.

Goods shipped to Northern Ireland from outside of the EU will be subject to the UK Global Tariff, unless deemed ‘at risk’ of onward travel into the EU. In this case, EU tariffs will apply. Again, the UK authorities can reimburse businesses if the goods are later proven to have stayed in Northern Ireland and where the UK tariffs are lower than the EU tariffs.

Northern Ireland will remain in the UK VAT area but will align with EU VAT rules.  Lower VAT rates or exemptions in Ireland would also be able to be applied in Northern Ireland.

Looking ahead

The long delays at customs and the confusion over exporting and importing processes will inevitably lead to a drop off in goods getting shipped from the UK into Europe, however we believe this will be short term and will start to increase again as understanding of the requirements improves and everyone has got to grips with the new processes.

That said, potential increases in tariffs and tax may put some businesses off, as well as increasing carrier costs which are starting to rise due to the additional administration involved.

At Hallmark we are continuing to help our clients navigate their way through the new Brexit trade deal requirements and ensure that their EU and Northern Ireland shipments conform to the new rules. Once the teething problems are overcome at the ports, we’re confident that the process will become smoother.

Need some assistance with exporting to the EU?

If you’d like some advice or assistance with getting your products into the EU, our fulfilment experts at Hallmark are happy to help. Contact us here or call 01664 485 000.

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