Effects of the BREXIT on the calculation of preferences

Brexit preference calculation

The transition period of the withdrawal agreement is coming to an end – namely December 31, 2020. The state of the negotiations shows that there is no free trade agreement with the EU to be expected at this point in time. Further, the UK no longer benefits from the 40 valid free trade agreements that the EU negotiated on behalf of member states. Now, one might think that this is a purely British problem. But in our globalized industry, such a far-reaching change is not without consequences for the entire economy and its production and supply chains. Many German companies are more closely linked to the British economy than one might assume.

Loss of EU origin of goods

However, the particular crux for preference calculation is that all input materials of British origin are no longer considered EU goods.  They are therefore to be treated as goods without preferential origin or third-country goods, with all the consequences this has for costing. As a result, products manufactured in-house by German companies could also lose their EU origin if the proportion of non-preferential input materials increases accordingly.

Cancellation of preference statement may be necessary

This necessitates a revaluation of these products and companies have to recalculate. In the worst case, the product loses its preference after the inclusion of the UK materials. As a consequence, the companies have to revoke the preference statements they have made so far – which means a very high bureaucratic effort.

Solution concept for GENESYS users

For all users of our preference calculation solution GENESYS to behave correctly with the system and their statements from 01 January 2021, we have developed a Brexit wizard with version, which automatically performs the necessary steps for customers:

  • Address data adjusted accordingly,
  • adjusted the validity of supplier declarations accordingly and deactivated their extension if necessary,
  • goods ever supplied by British suppliers as well as originating goods from European suppliers with British reference set to “no preference”,
  • Calculations have been re-triggered accordingly and thus
  • updated valuations are determined and
  • if necessary, revocations created.

The wizard is used to create a uniform system status and, if necessary, to make up for missing adjustments from a manual changeover from January 2020. This means that all users can start next year without any concerns.


Geschrieben von <a href="https://www.bex.ag/en/blog/author/stefan/" target="_self">Stefan Kluge</a>

Geschrieben von Stefan Kluge

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