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What business owners need to know about import and export compliance post-Brexit

on Friday, 10 September 2021. Posted in Global

Since leaving the EU, the UK has implemented a new customs border with EU countries, meaning moving goods between the UK and EU is now considered importing and exporting.

What business owners need to know about import and export compliance post-Brexit

Since leaving the EU, the UK has implemented a new customs border with EU countries, meaning moving goods between the UK and EU is now considered importing and exporting. 

To allow for a period of adjustment, the UK is slowly introducing new import and export regulations, ensuring businesses are not faced with a sudden strain on their administrative resources, or overwhelming cash flow requirements. The Government has also offered traders access to grants of up to £2,000 per business to pay for practical support as they prepare for additional import and export controls to be introduced within the coming months.

Phases two and three of the Government’s border operating model – the post-transition customs procedures for controlling imports from the EU – has been postponed to give businesses more time to prepare. This includes the need for customs declarations, which will be required from January 1 2022, rather than July 1 2021, as originally planned. 

However, there are new procedures already in place that business owners should know of to ensure they are compliant when importing from or exporting to the EU. 

EORI numbers

All businesses in the UK that import or export goods to or from the EU must have an Economic Operator Registration and Identification (EORI) number. Depending on a business’ location, it may require up to three differing EORI numbers. 

Businesses that make declarations or get customs decisions in an EU country will need an EORI number from the customs authority in the EU country where they submit their first declaration or request their first decision. 

The Government began sending out GB-series and XI-series EORI numbers to businesses that it believed required them before the transition period’s end. Those businesses that have not yet received their EORI number should apply for one online via the Gov.uk website as soon as possible.

Importing 

As of January 1 2021, the UK Global Tariff (UKGT) replaced the EU’s Common External Tariff, meaning customs and excise duties might be payable on imports into the UK from the EU, like those with non-EU countries. 

The UKGT applies to all imports from countries that the UK does not have trade agreements with. Businesses can check the tariff for imports using the Gov.uk website. They also need to check whether they need a license to import certain goods into the UK, as some may require an inspection fee to be paid. 

Exporting

Before exporting goods to the EU, businesses must check the duties, rules and restrictions of the goods in the destination country, as this  determines any tax and duty rates, as well as which exporting documents will be required. 

Some goods will now require an export license, and businesses will need to ensure this is in place prior to export.

A simplified declaration of procedure has been introduced for businesses exporting to the EU, though this can only be used for certain kinds of exported goods. This means businesses do not need to provide as much information as a full declaration and can instead use a pre-shipment advice declaration. However, businesses will still need to provide the remainder of their customs export information at a later date.  

Terms of Trade

Businesses should review the commercial terms of trade in their contracts relating to importing and exporting goods. These define who is responsible for customs duties, import VAT, and any additional transportation and insurance costs. 

Businesses may wish to consider using Incoterms in their contracts –  a set of international trade terms  that customers and suppliers in different countries may incorporate into contracts for the sale of goods. 

In any event, it is vital that all contractual terms are as clear as possible, as vagueness can lead to disputes and unexpected costs. It is also important to consider that, in international trade, culture and national differences between the buyer and seller can create misunderstandings, and disputes like this may cost the exporter time and money to resolve,

Businesses must remain compliant when importing and exporting from the EU and ensure they know the new dates for phases two and three, and the changes these dates will bring, as failing to do so can result in hefty fines, and in some cases, legal prosecution. 

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