With the Brexit withdrawal agreement in the House of Lords, the United Kingdom is moving irrevocably towards the 31st January Brexit deadline, leaving just 11 month’s transition to prepare for the inevitable changes to Customs processes.
With the Conservatives enjoying their biggest parliamentary majority since the 1980s, the Government is determined to stick to its Brexit timetable to take the UK out of the EU on 31 January and enter the transition period, until at least 31st December 2020, during which nothing changes to cross-border trade.
There is an option to extend the transition period for a further two years, but that option needs to be exercised by 1st July 2020 and the prime minister has insisted that there will be NO extension.
Our expectation is:
1. The government will not extend transition beyond 31st Dec 2020
2. A comprehensive FTA will not be finalised by that time
3. GATT XXIV will be adopted to ‘postpone’ tariffs until final deal is agreed
4. New Customs declarations will commence 1st Jan 2021 (with or without tariffs)
Noatum Logistics has implemented new IT systems, processes and data flows – that can handle huge numbers of European movements daily – to support the new paperwork requirements and Customs declarations that will follow the end of transition.
We recommend that you use this transition period to review your requirements AND our capability to protect your supply chain flows.
EU law dictates that trade talks can’t start until the UK legally leaves the bloc and EU countries have agreed a mandate for the EU Commission to negotiate a comprehensive trade agreement on their behalf, so trade talks are unlikely to start before the beginning of March.
The new European Commission president, Ursula von der Leyen, has already stated that it would be “impossible” to reach a comprehensive trade deal in ten months, suggesting we need to prepare to leave at the end of 2020 without a trade agreement.
This scenario is still better than leaving without an agreement – the hard Brexit – as GATT rules would allow tariff free trade whilst the final deal is negotiated.
It is extremely unlikely – borderline impossible – that the UK will be able to negotiate an entirely frictionless exit, which means that some form of Customs declaration will be inevitable in any outcome.
We are working closely with BIFA and HMRC to stay on top of developments and will communicate any points of particular importance.