Analysis

Customs and trade facilitation

Brexit deal analysis 

What does the Free Trade Agreement say?

  • The FTA sets out clear objectives to co-operate to support compatibility in customs legislation and practices, to combat fraud and to promote legitimate trade. The UK and the EU undertake to work towards simplification of customs formalities and to apply the Freedom of Transit principle through the Common Transit Convention.
  • There is mutual recognition of Authorised Economic Operator (AEO) programmes, which will help to reduce the administrative burden on businesses.
  • There are common provisions on areas such as risk management and post-clearance audit, review and appeal processes, temporary admission, publication of information, customs brokers, non-requirement of pre-shipment inspections and relations with the business community. The UK and the EU agree to facilitate roll-on roll-off (Ro-Ro) traffic (although the provisions do not go as far as the UK’s initial ask ).
  • The UK and the EU will work towards a single window that will allow traders to submit documentation for import, export and transit to a single entry point, which would help to reduce the administrative burden for businesses.
  • Advance rulings will be available on classification, origin and other matters.
  • A Trade Specialised Committee on Customs Cooperation and Rules of Origin is to be established.

How does this compare to what was expected?

  • Customs and trade facilitation is comprehensively covered, as might have been expected given the volumes and values of traffic, and the modes of transport used, between the UK and the EU.
  • Just as importantly, the Agreement provides a wide platform for future co-operation and to promote trade and customs development. This should help to reduce the administrative burden placed on businesses over the medium to long term.

What are the actions for business?

  • As outlined in the alert on Trade in goods, there will be customs compliance requirements for movements of goods between the UK and the EU. The UK will phase in these measures, but they will apply in the EU from 1 January 2021. The provisions on customs and trade facilitation provide a framework for future cooperation, which over time should help to simplify some processes for businesses.
  • Businesses should be aware of both the facilitations currently available, like AEO, and monitor future developments.
  • Businesses will need to consider where advance rulings on classification, origin etc. would be beneficial to their operations.
  • Businesses will need to check where the use of Transit may be relevant for their product flows.

To discuss specific support with your Brexit preparations based on this latest development contact: Deloitte Brexit Insights.

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