Brexit hands

Brexit deal: What does it mean for business?

Martijn Rijk

24/12/2020

Martijn Rijk
Marketing Manager

After four years of negotiating and missing more deadlines than we want to think about, the European Union and the United Kingdom have finally reached an agreement. The news has just been announced.

Boris Johnson just announced that it is a Canada style free trade deal. 

What is a Canada Style Deal?

The BBC explains:

The EU's agreement with Canada is called the Comprehensive Economic and Trade Agreement, or Ceta for short.

Ceta gets rid of most, but not all, tariffs (that's taxes on imports) on goods traded between the EU and Canada. Tariffs remain on poultry, meat and eggs.

It also increases quotas (that's the amount of a product that can be exported without extra charges) but does not get rid of them altogether. For example, quotas on EU cheese exports to Canada increase from 18,500 tonnes to 31,972 tonnes a year.

It does little for the trade in services and in particular almost nothing for the trade-in financial services, which is very important for the UK economy.

In the case of the deal that the European Union and the United Kingdom just struck it appears there will be no import duties. The full details of the agreement are not yet known.

Great! But What Does That Mean For Businesses?

When trading between the European Union and the United Kingdom there are two approaches you can take in getting your goods to their final destination on the other side of the English Channel.

Option 1: Using Transit Documents

Brexit has not yet started, and already we are seeing long lines at transport nodes like Dover and Calais. We expect that there will still be increased waiting times at both borders after January 1st.

There is a way to minimize the time you need to spend waiting once your goods reach the other side of the Channel, and that is the use of transit documents. By using a transit document you postpone declaring your goods until they reach their final destination. The transit document allows you to transport your goods without customs clearing them, which saves time.

For example, you have a shipment of car parts produced in the United Kingdom that need to be delivered to your German customer. Your customs partner in the United Kingdom creates a transit document and takes care of the warranty of this document. The goods are transported to the end customer in Germany, who discharges this T-document and declares the goods into free circulation.

Option 2: Using Export Documents

The second option is using an export document for your shipment. Let’s take the same shipment from the United Kingdom to Germany as an example, shipping it through Calais. When using export documents there are no import duties, but you will have to customs clear the shipment as soon as it arrives in Calais. This means that documents and goods need to be checked and inspected by the French Customs Authority before they can be transported to their final destination in Germany. This takes a lot more time then getting a transit document processed.

Register Your Products and Plan

Whether you use transit documents or export documents, you will have to prove the origin of your products. Typically it is the Chamber of Commerce that assesses and legalizes Certificates of Origin. This process may vary per country. In Germany, it is the Customs Authority. You need to be able to prove the origin of your products. You may need to get declarations from your suppliers to do this. 
Please also keep in mind that there are cutoff times for origin documents. In the Netherlands, the Chamber of Commerce has a certain cut off time if you want to receive the requested documents that same day.
If you have not already registered your products with the Chamber of Commerce, we advise you to do so as soon as possible.

We Are Here to Help

Don’t hesitate to contact us if you have any questions or need help getting your products registered at the Chamber of Commerce or Customs Authority. Our experts are happy to help! Customs Support: Take the Load off Your Mind!