What to expect at the borders

Whilst the deal has sought to eliminate tariffs and quotas on most products, this will not mean “frictionless” trade.

Dispatches become exports, and arrivals become imports and customs procedures have changed to reflect this with customs declaration and product safety documentation being required.    Reports are that some parcel operators have temporarily suspended UK-EU goods movements due to an increased burden of customs paperwork.

The UK government has introduced the Border Operating Model, which introduces changes in three stages (January, April and July this year) and sets out what importers and exporters will be expected to produce in terms of documentation.   The EU however has introduced its new requirements in full from 1 January 2021, including the requirements for entry and exit summary declarations.

Whilst in most cases it will be the trader who has responsibility for providing the necessary documentation for its goods, it is the vehicle driver who has to carry this and present it at the border.  Heavy goods vehicles using Dover will need to use the “Check an HGV is Ready to Cross the Border” service from the Government, and apply for a Kent Access Permit before they enter Kent (which will be valid for 24 hours).  Traders will need their Movement Reference Number, Transit Accompanying Document, ATA Carnet and TIR Carnet, and, depending on their cargo, certificates like Export Health or Phytosanitary or those relevant to restricted goods.

Rules of Origin will apply – see here for details – and there will be customs declarations and checks for health and safety at UK/EU borders (with special rules for Northern Ireland (see Trade With Northern Ireland). 

Trusted Traders (Authorised Economic Operator or AEO) programmes will still operate however, allowing some traders to benefit from simplified customs processes.

There are changes after the border crossing too, as British truck drivers will be limited to a single drop-off and a single pick-up when in mainland Europe (as against the three they were previously able to do).

Product marking requirements have also changed – with products being sold in the UK market requiring a UKCA mark and, as there was no agreement to allow the same bodies to certify conformity for both EU CE marks and UKCA marks, the EU will no longer recognise CE marks based on conformity assessments carried out by UK notified bodies (although in practice many UK notified bodies have been making arrangements with their EU counterparts to try to minimise disruption, so check with the relevant Notified Body for your product if you haven’t already done so).  There is a one year interim period before switchover meaning the CE mark will remain acceptable in the UK until 1 January 2022 (as long as EU and UK requirements don’t deviate) but this only applies to products that have been made before 31 December 2020.  Note that goods being sold in Northern Ireland may require the CE or UKNI mark as well as the UKCA mark.

There is no longer free movement of persons, free provision of services or freedom of establishment for businesses between the EU and the UK.  Service suppliers have lost their automatic right to offer services across the EU and may need to establish themselves in the EU in order to keep operating, and to comply with different rules for different EU member states in which they operate.  The particular rules which will apply will be determined by the relevant sector in which businesses operate and also the way the service is supplied (e.g. internet or in person) and by whom (e.g. a local supplier owned by a foreign company).

However, the Free Trade Agreement does contain a commitment not to introduce any new trade barriers to service suppliers – such as quotas, equity caps, economic needs tests, joint venture requirements, or nationality requirements for senior managers or directors.  Also, there is no general requirement to have a local presence or residency in order to be able to supply a service.  There are however a number of member state “reservations”, for example insurance services in Germany can only be supplied from a locally based entity, so service suppliers will need to check against their sectors for particular restrictions.  Those services requiring particular professional qualifications will also need reviewing as there will no longer be mutual recognition on this.

Although the deal is relatively light on tax provisions as a whole, arrangements on VAT seem at present to be causing the most headaches to businesses since the UK has exited the EU VAT regime.  Businesses, and particularly those operating in Northern Ireland, will need to review the changes to VAT on recovery, registration and reporting, particularly now that goods arriving in the UK from the EU (and vice versa) now attract import VAT. 

The UK Customs Academy has some useful materials at https://www.ukcustomsacademy.co.uk/resources/webinars/.