No one knows what the full impact of Brexit will be but without a deal, something that is looking increasingly likely, the below graphic are just some the unknowns that should be considered for your import-export business:
The impact of Brexit on international customs and trade compliance is not yet clear but the following factors are something that must be considered at this stage.
By the end of March 2019, Britain will have exited from the European union, with a massive impact on customs and trade processes.
What will happen without an agreement?
- 48% of UK shipments go to EU countries
- 54% of UK arrivals come from EU countries
…without customs clearance and duties to be paid.
Those movements will become third-country imports or exports, including the need for customs declarations and duties due to a missing agreement. Export control regulations will be affected as well.
For just two minutes more for customs inspections per truck results in approximately 27 extra kilometres of traffic jam with a huge impact on the supply chain.
Additional custom specialists will be required.
The administrative burden could increase from five minutes before Brexit to more than one hour of workload per export! 185,000 UK traders could be making their customs declarations for the first time.
Customs declarations in the UK are expected to increase from 55,000,000 to 255,000,000 per year. It could be very costly, with an estimated €50 or more per declaration.
The OECD estimates that inefficiencies relating simply to the process of customs clearance could result in additional costs of up to 10% of the value of the goods.
Beyond this, increased duty rates on imports to the UK, from non-EU countries due to the UK losing access to EU free trade agreements will apply. New free trade agreements need to be negotiated with all relevant countries which could take 5 to 7 years per free trade agreement.
Lastly, more questions still need to be answered that we just don’t know the answers to right now:
- Will the new customs authority system CTS be ready?
- Will support systems be ready?
- Will there be enough capacity and customs brokers?
- Will the companies export control management be ready?
There are many questions to be answered but it is important to understand what is at stake and how your business will be affected. Take the time now to understand how Brexit could directly effect you and research what changes you need to make, so you are not caught out and your business does not suffer Come March 2019.