Exporting to the EU? ‘No deal’ BREXIT advice explained

The UK government has published guidance for UK companies on the procedures and changes that may affect your business if the UK fails to agree a trade deal with the EU (a ‘no deal’ scenario).View the government guidance here.

So what do these points mean?

Exporting to the EU

At the moment trade with Europe is easy – you can ship something to Bournemouth, Brussels or Berlin without barriers or customs procedures thanks to the European single market.  In the event of a ‘no deal’ scenario this would change and UK businesses exporting to the EU would be required to follow customs procedures. 

Before exporting goods to the EU the government has advised that UK businesses would need to:

• Register for or have a valid UK EORI number. 

EORI is an acronym for Economic Operator Registration and Identification. An EORI number is assigned to importers and exporters by HMRC, and is used in the process of customs entry declarations and customs clearance for both import and export shipments travelling to or from the EU and countries outside the EU. Details can be found here.

• Ensure their contracts and International Terms and Conditions of Service (Incoterms) reflect that they are now an exporter

Incoterms is short for ‘International Commercial Terms’ and are trade terms published by the International Chamber of Commerce (ICC). They are used to make international trade clearer by outlining which party (seller or buyer) is responsible for each part of the international shipping costs. For more information see my Incoterms article here.

The Incoterms themselves will not change but there will be additional charges to consider such as customs clearance, local duties and taxes. Which party (buyer or seller) will be responsible for these should be clarified utilising the incoterms.

• Consider how they will submit export declarations, including whether to engage a customs broker, freight forwarder or logistics provider (businesses that want to do this themselves will need to acquire the appropriate software and secure the necessary authorisations from HMRC). Engaging a customs broker or acquiring the appropriate software and authorisations from HMRC will come at a cost.

This is the main difference that will affect UK companies. If your company has only ever traded within Europe – customs procedures will be unknown ground but here is nothing to fear here!

UK freight forwarders and Logistics companies already submit export entries for non-EU countries. A ‘no deal’ BREXIT would just mean they now have to submit export entries for EU shipments too. This is bound to, at least in the early stages, slow down the shipping process due to the sheer volume of added paperwork.

Probably the sentence that will worry companies the most is “Engaging a customs broker or acquiring the appropriate software and authorisations from HMRC will come at a cost.” Of course it will come at a cost because you now need a service you didn’t need before. Depending on your Freight Forwarder this can be anything from ￡10 to ￡30 per entry. If you are a large company you may with to install a link to the Customs system to avoid this per entry cost.

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