BREXIT Summary

[UPDATE October 16, 2020 written by Nese Öztunc]

Over 4 years of Brexit negotiations: No final agreement in sight

Four and a half years have passed since the UK decided to leave the EU. Since February 1, 2020, the United Kingdom is defacto no longer an EU member state and in two and a half months, i.e. on December 31, 2020, the transition period will also end. However, there are still open issues that are proving more difficult to resolve than hoped. One of the issues in dispute is the British Single Market Act. This law stipulates that Northern Ireland should be part of the British single market in the future. However, the Brexit agreement states that a customs union is planned between Northern Ireland and the United Kingdom. Boris Johnson is holding on to the idea of the British single market, but the EU is exerting pressure, saying that if Johnson does not adhere to the Brexit agreement, the United Kingdom will not be able to obtain third-country status and will also violate international law. Despite the tough negotiations, both sides still want a result and want to avoid a breakdown in relations. The latest talks at the EU summit, on Oct. 15, in Brussels also failed to produce a successful outcome, despite attempts by the chancellor to facilitate compromises. Fair competition conditions, leadership in the future agreement and the right for EU fishermen to fish in British waters are the issues that are likely to continue to delay an early agreement. Sources:

[UPDATE April 12, 2019] As can be seen from the current messages, the BREXIT date on April 12, 2019 has been cancelled. The new official BREXIT exit date is expected to be October 31, 2019. We received information from the Federal Information Technology Center (ITZBund) that the “Brexit” maintenance window scheduled for April 13, 2019 will be cancelled. The export portal will operate as usual on that day. As soon as we have new information, you will find out more here.

[UPDATE March 27, 2019] Even after weeks of negotiations, there is still little solid news to report on the BREXIT. Theresa May has so far been unable to win a majority in the British Parliament for a regulated exit from the European Union. Therefore, the deadline of March 29, 2019, is off the table and a postponement to April 12, 2019, is considered likely. In this regard, the customs administration has issued an ATLAS participant info that systems will be switched over on April 13, 2019. You can download the ATLAS INFO 1757/19 under this link. So far, the code lists for testing exports to GB in case of a BREXIT are not yet available due to the pending agreement. As soon as the code lists are available we will provide them immediately. At the moment there are the following BREXIT scenarios:

  1. BREXIT without a deal
  2. Theresa May’s deal
  3. Remaining in the customs union
  4. Second referendum
  5. No Brexit
  6. Cancel Backstop
  7. The Canada Model
  8. The Norway Model

Meanwhile, more and more people in the UK are taking to the streets to demonstrate against BREXIT. In case of any news, we will keep you informed about the impact and what precautions we are taking in our software solutions.

[Created: Dec 18, 2018] Even at the end of the year, there is no let-up in the BREXIT issue. Hardly a day goes by without new headlines and it is sometimes difficult to follow the current development. It seems as if this “never-ending story” simply does not want to come to a “happy end”, let alone to an end at all. That’s why we have summarized the most important facts about the current status of the BREXIT. The fact is: as of March 29 next year, the United Kingdom will have officially left the European Union as things stand at the moment. To be sure, some things are finally taking shape. For example, to regulate the future movement of goods across borders, the British Parliament has already passed its own customs bill, which you can access at this link.

Possible BREXIT scenarios

But which cases do German companies have to be prepared for? Since an agreement on the expiration is still pending, there are the following possibilities:

Case 1 – Worst Case: Hard Brexit

A hard Brexit would probably be the worst solution: no possibility of granting preferences and a regular third-country status would be the result.

Case 2 – Customs union

An agreement to form a customs union, similar to that with Turkey, would be an alternative. A customs duty exemption upon proof of the status of Union goods could be claimed here. A customs union could also help avoid a “hard” border between Ireland and Northern Ireland, as the need for border controls would be reduced.

Case 3 – Free Trade Agreement (FTA)

If only a free trade agreement were agreed, it would be possible to obtain a preference. However, this is subject to the condition that a preference calculation must be carried out each time exports are made to the UK.

Case 4 – Exit from BREXIT

From a customs point of view, the best solution would be an exit from Brexit – this is also still being discussed, as is a transition period until 2020. Then, for the time being, nothing would change in March 2020. Meanwhile, the European Court of Justice has ruled that the UK could still unilaterally stop the Brexit without the consent of the other EU countries.

Brexit from a preference perspective:

However, should Brexit occur, supplier declarations from the UK will no longer be valid from March 29, 2019! Goods which are “exported” from the UK and “imported” into the EU after this date must be considered as non-Union goods. In this case, customs declarations must be submitted, export licenses, procedural simplifications and, if necessary, import licenses must be applied for. More details on this and how the handling of preference calculation in GENESYS will look like are summarized in our previous article: BREXIT – preference calculation, trade in goods – what do companies have to consider?

Is German customs prepared for the exit?

The customs administration has also not yet provided feedback on whether the ATLAS software will accept customs declarations to and from the UK by the deadline.

Martin Bullinger

Nach 10 Jahren bei der Zollverwaltung und mehreren Jahren Tätigkeit in der Industrie in den Bereichen Import, Export, Versand und Präferenzabwicklung unterstützte ich von Oktober 2018 bis Juni 2019 die Kollegen im Support bei der BEX Components AG. Die Beratung der Kunden bei der Anwendung der Produkte AES FOR YOU!, SANSCREEN und EXPERIUM zählten hier zu meinen Aufgaben. Seit Juli 2019 bin ich als Zollbeauftragter in für den Aufbau der Zollprozesse im neuen Global Distribution Center eines weltweit tätigen Unternehmens beschäftigt. Ich hoffe, meine Artikel bringen Sie in Ihrem täglichen Aufgabenfeld weiter. Ihr Martin Bullinger