The customs consequences of Brexit – when and how?

The customs consequences of Brexit – when and how?

With Brexit on the horizon, trade operations with the United Kingdom will no longer be considered intra-EU transactions and will therefore be subject to a different customs regime to the one currently in place.

For the time being, 31 January 2020 has been set as the deadline for the UK’s exit from the European Union. In the current unlikely event of a “soft Brexit”, an adequate temporary transitional period to allow those implicated to adapt to this exit is included. On the other hand, it is also uncertain whether there will ultimately be a “hard Brexit”, especially since it also depends on the upcoming elections’ result that will take place in the United Kingdom in December.

One of the major consequences of this rupture is that the flow of goods between Spain and the UK will no longer be considered “intra-EU transactions” and will thus become subject to customs formalities as is currently the case for all countries outside the EU. According to a statement from the Spanish Tax Agency, among the formalities that will have to be taken into account, provided that no different arrangement is agreed upon between the EU and the United Kingdom, will be the following:

– Shipment of goods from Spain to the UK will require submission of a standard customs declaration, in which more requirements have to be met than in the simplified procedure. However, in certain cases customs rules also allow for the simplified procedure.

– For customs purposes, traders importing or exporting shall be identified by a registration and identification number (EORI Number). This number is valid throughout the European Union. Trade operators not established in the EU must also designate an EU-established fiscal representative.

– Certain goods may be subject to some type of authorization or certificate that requires processing prior to import or export.

– There may be an obligation to pay certain taxes or tariffs, or to apply certain restrictive measures, which vary according to the product and its origin. There is a clear, precise and universal classification of these for the different goods exported or imported in the form of a TARIC code.

– Shipments to the United Kingdom are exempt from VAT. UK imports, on the other hand, will be subject to VAT.

– Exports and imports may be subject to so-called Excise duties (special duty on goods such as beer, wine, mineral oils, tobacco, etc.). In this scenario, the intra-EU application of EMCS (Excise Movement Control System) will not allow for messages to be received or sent from and to the UK.

As apparent, a No-Deal Brexit would call for the UK to be directly considered a “third country”, with all that this implies. It would initially lead to significant disruptions in freight traffic, affecting not only European citizens but also, to a large extent, the companies that operate every day in the European market.

As a means of aid for companies operating in the EU or the UK, the European Commission has published an informative list which contains certain guidelines and issues to be taken into account in the event of a UK withdrawal from the EU. You can find this list at the following link:

Lastly, the European Commission has also proposed that both the European Solidarity Fund and the European Globalisation Adjustment Fund be made available to the companies, workers and Member States most affected in the event of a No-Deal Brexit.

Marinel-lo @ Partners