July 24, 2020
Available here
The recording of our recent Brexit transition webinar is now available, listen if for more information!
24th July, 2020.
With six months of the transition period remaining, it has been re-affirmed jointly by Boris Johnson and Ursula von der Leyen that there will not be an extension beyond December 31st, 2020. This indicates that a deal needs to be reached within the remaining time period in order to avoid the United Kingdom and the European Union trading with each other under WTO’s MFN (Most Favorable Nation tariff) terms.
If the transition was to be extended, it would need to be agreed by both parties by the end of June 2020.
Full regularity controls must be implemented from January 1st 2021 when the UK becomes fully independent from the European Union. This position was reiterated by cabinet minister Michael Gove from the United Kingdom in February of this year. Since then, the COVID-19 pandemic struck Europe, and attention was drawn away from the exit preparations to redirect resources into tackling the virus.
The government has acknowledged that businesses were forced to put preparations to one side as they switched to respond to the Coronavirus spread. With this in mind, it has now been announced that border checks will now be brought in over three phases, even in the event of no deal, to assist international traders to prepare for the increase in customs checks.
PHASE 1 - 1 January - checks will begin on controlled substances, such as alcohol and tobacco. Standard goods, such as clothes and electronics, will be subject to basic customs procedures but companies will have up to six months to complete customs declarations and pay relevant tariffs.
PHASE 2 - 1 April – imports of products of animal origin, including meat, milk or egg products, will have to pre-notified to officials and provide the relevant health paperwork.
PHASE 3 - 1 July - all goods will be liable for relevant tariffs and customs declarations as well as full "safety and security" declarations. From this moment, there will be an increase in physical checks on livestock, plants and other sanitary and phytosanitary products at ports and other entry points.
The United Kingdom recently published its own customs tariff, which is designed to simplify some tariffs and reduce the duty rate of commodities critical to the United Kingdom economy. The list of tariffs available here, outlines the current duty percentage per the European Union's Common External Tariff and the new rate that will be applied to imports from third countries into the United Kingdom from next year.
Details of additional duties, such as retaliatory, anti-dumping and countervailing duties will follow later in the year along with preferential duty rates that have been agreed before 1st January 2021.
If you are concerned about how Brexit will affect your business, we can address any questions you may have, please don't hesitate to reach out!
Our new BREXIT portal is available to you with all the latest information
UPDATE APRIL 2020
There are eight months to go before the transitional period between the United Kingdom and the European comes to an end. The United Kingdom officially left the European Union on January 31, 2020. So what is the status of negotiations?
Evidently, the current Coronavirus pandemic has been the major focus for Boris Johnson and the United Kingdom's government, led by the Conservative party, however, Brexit discussions have been on-going albeit via video link as opposed to face to face meetings. The United Kingdom is hoping to sign a free trade agreement with the European Union similar to the deal the country has with Canada. The European Union, on the other hand, are requesting that the United Kingdom adheres to European Union regulations which the United Kingdom has rejected as a possibility.
In order to ensure that a deal is in place before the 31st December 2020, the agreement would need to be completed by July 1st 2020, however, there is a provision to extend the transitional period by up to 2 years if both sides agree. Boris Johnson is reluctant to agree to any further extensions.
Below is the 2020 Brexit timeline published on the House of Commons library:
Current issues being discussed between the EU and UK:
• United Kingdom are looking for a Free Trade Agreement similar to Canada
• European Union want full fishing rights in UK waters
• The European Union want the United Kingdom to adhere to EU regulations.
• The United Kingdom do not have the intention to be subject to EU regulations after 31st December. However, some regulations currently in place will be written into British legislation.
Assuming that a deal is not agreed between the two parties by December 31st, 2020, the United Kingdom will not gain any benefit from the numerous trade deals in force with the European Union.
However, the British government has a number of deals that are expected to be in force from the 1st January 2021. Here are the trade agreements that have been signed already:
• Kosovo
• Jordan
• Morocco
• Georgia
• Southern African nations
• Tunisia
• Lebanon
• South Korea
• Central America
• Andean countries
• Caribbean countries
• Pacific Islands
• Liechtenstein
• Israel
• Palestinian Authority
• Switzerland
• The Faroe Islands
• Eastern and Southern Africa
• Chile
Negotiations are ongoing with a further 16 countries, including Canada and Mexico.
If you are concerned about how Brexit will affect your business, we can address any questions you may have, please don't hesitate to reach out!
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