Reminders regarding EU Exit - key points
On the 24th December 2020 the EU and UK concluded a Trade and Co-operation Agreement, a lengthy document which runs to 1246 pages including various annexes.
The document covers the rules relating to products which will allow them to be freely traded between the EU and UK, market access rules including for air and road transport, co-operation, dispute resolution and the methodology for monitoring the Agreement.
The Agreement does not provide information regarding detailed frontier procedures including customs entries, transit. licences and SPS checks. From communications BIFA have received since Christmas it is important to emphasise the key point that for border procedures when compared to “No deal”, the “Deal” changes very little in terms of border procedures. Whilst there may be tariff free and quota free access for goods moving between EU Member States and the United Kingdom all other border controls and customs procedures, as detailed in legislation and international convention (e.g. CITES and Transit), remain in place.
- From the 1st January 2021 the UK will phase in customs entry requirements and SPS checks over a 6th month period up until 30th June 2021
- The EU will implement full formalities with immediate effect from the 1st January 2021
- In many ways the most complex area is Northern Ireland (NI) but the border in the Irish sea between NI and GB mainland becomes operational on the 1st January 2021.
The Trade and Co-operation Agreement
This mainly impacts the customers of BIFA Members, tariff and quota free trade will allow goods meeting the appropriate criteria to be freely traded between the two Parties without the need to pay duty at import. It will be the shipper’s responsibility to provide the relevant declaration to enable preference to be claimed by the importer. Where the declaration is unavailable there is the concept of “Importer knowledge”, whereby the importer must possess valid evidence that the imported product qualifies as originating in the territory of the other party and satisfies the requirements detailed in the Agreement to allow preference to be claimed. It will be essential for import customs agents to obtain a written statement from the importer to substantiate their instructions.
Much of the text of the Agreement covers Rules of Origin, and the various Annexes provide specific information by commodity on when preference can be claimed - these are complex and a matter for importers and exporters to determine. However, one question that we have been asked related to the “Text of the Statement of Origin” and this can be found in Annex ORIG 4 page 482. As part of the EU Withdrawal Agreement, traders will not be able to continue using a pre-existing REX registration when making out a statement on origin. Instead, they must replace the REX number with their Economic Operators Registration and Identification (EORI) number. https://www.gov.uk/government/publications/apply-to-become-a-registered-exporter.
Modes of Transport
For Air Freight Transport, the Agreement allows basic market access and Airlines from each Party to the Agreement have the right to overfly one another’s territory and to make re-fuelling stops etc. The rest of the Agreement only allows for point to point and return flights for passenger services between the EU and UK. However, for all cargo services a UK carrier can fly to an EU destination, collect cargo and then fly on to a destination outside the EU. Similarly, EU carriers can fly to the UK, collect cargo and then fly to, for instance, the USA. There are commitments from both parties to work closely together and co-operate in the essential area of Aviation Security working under ICAO rules and sharing information.
For Road Freight Transport, as of 1 January 2021, UK companies will no longer hold an EU licence or be able to perform transport services within the EU as part of the Single Market. The draft EU-UK Trade and Cooperation Agreement provides for quota-free point-to-point access for operators transporting goods by road between the EU and the UK. This means UK lorries would be able to reach the EU and return from the EU, including when not loaded. The same rights are conferred to EU hauliers travelling from any point in the EU to the UK, and back from the UK to anywhere in the EU. UK and EU trucks will also be able to perform up to two additional operations in the other party's territory, once they have crossed the border. This will allow EU hauliers that carry a load to the UK to perform two cabotage operations in the UK, thus limiting the risk of having to travel back to the EU without a load.
For UK hauliers, these additional operations can be composed of two cross-trade operations (i.e. transport operations between two Member States) or one cross-trade and one “cabotage” operation (i.e. a transport operation within two points of a single Member State). Special provisions are made in the case of Ireland, as Northern Irish hauliers will be able to perform two cabotage operations in Ireland. The Agreement also provides for full transit rights across each other's territories (to reach third countries or other parts of their own territory).
The full text of the relevant Agreement can be viewed at: https://www.gov.uk/government/publications/agreements-reached-between-the-united-kingdom-of-great-britain-and-northern-ireland-and-the-european-union?utm_source=f7b429ab-2670-413f-a3c4-013bbfe623c3&utm_medium=email&utm_campaign=govuk-notifications&utm_content=daily