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Saturday, January 22, 2022

Brexit: what UK/EU customs changes mean for businesses from 1 January

Take a look at the headlines and you could be forgiven for wondering if the UK has moved on by a year. Debate has raged over how strict restrictions should be to combat the latest wave of COVID-19, while Britain’s withdrawal from the EU is far from over. Brexit minister Lord Frost has just resigned, and January 1 will once again see a set of Brexit changes that could exacerbate the economic damage from the pandemic. So what are the January changes and why have we heard so little about them?

Full customs controls will be effective from January 1. One aspect of the changes are new rules that need to be followed in order to enable trade between the UK and the EU to remain tariff-free in accordance with the Trade and Cooperation Agreement.

During 2021, exporters have been allowed to provide proof of origin of goods after they have been exported, as long as they have made a customs declaration at the border. But from 1 January, when UK exporters cannot prove the origin of a product at customs, an EU customer will have to pay the full import duty (and vice versa). For example, a French importer bringing agricultural goods from the UK would on average incur a non-preferential duty of around 11%.

So far, the impact of Brexit on importers has been much less than on exporters, not even having to declare customs duties. This was part of an arrangement called “staged customs control”, but from January 1, they would also have to make customs declarations.

This means that in addition to all the supply-chain problems that manufacturers have been facing in recent months, they will now face the double whammy of full customs controls for the first time. If businesses do not meet the new requirements, the goods will not be able to move out of the port.

Neither transition period has completed on January 1. During the remainder of 2022, we expect to introduce several other safety and security measures. For example, physical examination of live animals will begin on July 1. This will also put more pressure on border controls and slow the movement of trade from one side to the other.

lack of clarity

The basis for all these changes is outlined in the UK government’s policy paper The Border Operating Model. An updated version was published in November, with revisions as recently released as of December 16. These changes reflect the new timetable for implementing import controls, which was set only in September. You’ve probably heard of just-in-time manufacturing, but it equates to policy making. This has left businesses with considerable uncertainty.

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The British government argues that this is only a “practical new timetable”, but it raises concerns about the varying levels of compliance in either direction. For example, a delay in the implementation of checks arriving in the UK may result in goods crossing the border that do not meet the appropriate health and safety standards, whereas these checks may be for UK goods exported to the EU. Huh.

Before all these additional new Brexit rules came into force in January, UK ports in 2021 experienced the lowest volume of trade since 1983. It doesn’t help that Felixstow, the largest British port, appears to be one of the least. Efficient ports in the UK and in comparison to rivals in Europe and Asia. This is the case whether you measure efficiency as minutes per container move, or as the average number of hours spent at port by ships.

The UK government has been trying to address such challenges with its £200 million Port Infrastructure Fund, but this too has been controversial. The Port of Dover took the government to court when it received only about 10% of the money requested to build additional passport checkpoints.

The government’s funds were squeezed by the fact that the total bids received from ports were more than twice the amount it had provided, such that none of the ports received all the money they were asking for. As if that wasn’t bad enough, the government reduced the total size of the pot by 34%. If British ports are not able to upgrade themselves properly and then are under additional pressure due to changes being introduced in January, it means that delays in shipments are likely to be an ongoing issue.

Lorry awaiting clearance at the Port of Dover.
Adrian Seal/Alamy

In other words, not only are businesses facing a major adjustment in the way they deal with customs clearance, but they are likely to have longer wait times for goods in UK ports – further increasing costs on businesses as time and money. Is. This increases the likelihood that supply chains will shift away from UK businesses to other partners.

UK businesses have already suffered from declining trade as a result of Brexit. And let’s not forget that this is all happening in the backdrop of Liz Truss becoming the new Brexit minister while still as foreign secretary. For a government elected on the motto of “Getting Brexit done”, it is perhaps not surprising that so little has been said about the upcoming changes.

This article is republished from – The Conversation – Read the – original article.

World Nation News Deskhttps://www.worldnationnews.com
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