Staying prepared for Brexit

Everything you need to know

The departure of the United Kingdom from the European Union (EU), commonly referred to as Brexit, was initially planned for 29^th March 2019. This was the result of the referendum held in June 2016. Having granted an initial extension until 12^th April 2019 – EU leaders have backed a six-month extension until 31^st October 2019. That date is now approaching.

Recently the UK government reached an agreement with the EU outlining the conditions on which the United Kingdom shall leave the European Union. The deal, known as Withdrawal Agreement Bill, is still pending voting in the British Parliament, which has recently withheld the approval of the bill until it has been thoroughly debated by both Houses of Parliament and passed into law, for which the government had initially envisioned three days only.

The British Parliament also recently voted in favour of obliging the Prime Minister to request another Brexit delay from the EU in case the Withdrawal Agreement Bill does not pass in the Parliament by 31st October. However, it is up to the European Union to grant (or not) such extension, which needs to be approved by all member states.

In a most recent development, the British Prime Minister has announced he would abandon the Withdrawal Agreement Bill in case Parliament does not accept his three-day timetable to get it approved.

What are the possible scenarios based on recent developments?

If the Withdrawal Agreement Bill is not approved by Parliament, the UK will either obtain another Brexit extension from the EU or be forced to leave without any agreement on 31st October. If the bill is approved, the UK will leave with a deal, either on 31st October or after, based on how fast the changes in the law can be implemented. Check here for future scenarios explained in graphics (source: BCC).

Brexit could also theoretically be cancelled altogether, for which a change in the law in the UK is required, but there has not been sufficient support in the British Parliament for that option.

At Maersk, we are prepared for various Brexit outcomes, both from processes and IT systems perspective. These scenarios include a “No-Deal” option, any potential further exit deadline extension, as well as special “Norway-style agreement with the EU (where Norway is subject to some EU rules and regulations, without legally being part of the bloc).

What does a “No-Deal” Brexit scenario mean to you and your business?

Such departure from the EU will mean that the UK will no longer be subject to trade agreements between the EU and foreign countries and will also not enjoy any applicable trade agreements with any EU Member State either. Instead, trade between the UK and those countries will be subject to general rules of the World Trade Organisation, in case there are no other bilateral trade agreements in place. This will have impact on duties or tariffs, customs and many other procedures related with moving goods between the UK and other markets and will therefore also impact the transport and logistics sector.

Whether you are located in the United Kingdom or elsewhere, if your business relies on transportation of goods to or from the UK, after the Brexit date you might be impacted by the following:

• Trade between the United Kingdom and countries of the European Union will no longer be treated as taking place within the same economic or customs area and will instead follow the same rules and regulations that apply for trade between the UK and any other third nation. Effectively, this will imply customs clearance and related documentation, application of duties and tariffs or more complex formalities compared to the trade between the countries within the EU.

• Trade between the United Kingdom and third countries with which the EU has special trade agreements will no longer be subject to those agreements after Brexit. This might imply less favourable terms for trading with these countries: higher duties, different or more complex procedures, etc.

One particularly important case to consider are situations when your goods have been expedited BEFORE the Brexit date, but are scheduled to arrive at their destination AFTER the UK has already left the EU. In such cases, they will be subject to new “post-Brexit” conditions upon arrival, which might differ significantly from the “pre-Brexit” terms and conditions.

EU security filings

Important to note is also that the UK will be treated by the EU as any other third country for security filing purposes, in case no other specific agreement is reached between the UK and EU. In case of exports to the EU, this will mean that all cargo loaded at a UK port, as well as cargo loaded at prior EU ports and remaining on board the vessels calling a UK port, will be required to have an Entry Summary Declaration (ENS) filed for it in advance of entry into the EU. This is not limited to cargo for discharge in an EU port, but also applies to Foreign Cargo Remaining On Board (FROB) transiting the EU and shipped to subsequent ports outside of the EU. 

However, UK export cargo will qualify for “short sea” rules in EU ENS, which means that filing must be made two hours prior to the arrival of the vessel to be immediately approved for loading. It will subsequently receive a Movement Reference Number (MRN) at a later stage.

Take actions now to prepare for post-Brexit Customs requirements

The UK Government have outlined several steps that the importers or exporters must adhere to, to ensure they can continue to move and customs clear their cargo post Brexit. 

These actions are listed under the below links and change depending on whether you import or export. These links include important guidance including - but not limited to - applying for an EORI, appointing a customs broker, applying for Transitional Simplified Procedures (TSP).

Importers
Exporters 

Please follow these links and ensure you have taken the necessary steps prior to 31st October.

Staying informed . general information

Prepare your business for the UK leaving the EU– follow the information published regularly by the UK government on their dedicated page and stay informed on all the changes and additional requirements resulting from Brexit.

You can also read the guide put together by the Confederation of British Industry, advising businesses on the practical steps they can take to try and minimise disruption after Brexit.

Finally, click here to read the official European Commission guidance note on the withdrawal of the United Kingdom and customs related matters in case of  No Deal.

Moving your cargo efficiently to and from the UK and giving you the peace of mind at all times regardless of Brexit remains our priority at Maersk.

Maersk connects Britain with the world with direct services and convenient transhipment options in major ports around the world, while Sealand – A Maersk Company offers a wide range of short-sea connections within Europe and Mediterranean. We are also happy to offer you comprehensive supply chain management solutions, along with other expertise – such as Customs House Brokerage, helping you plan your cargo deliveries efficiently despite administrative complexities.

For any further questions or concerns, don’t hesitate to contact your local Maersk representative.