Brexit: Preparing for the end of transition period

At the end of the transition period on 31st December 2020, the UK will no longer be in the EU single market or the EU customs union. Regardless of the outcome of negotiations, there are a number of actions business can and should now take to prepare ahead of 31st December.

Businesses need to be aware of the changes arising and what they need to do in order to prepare for the changes. Even though the final arrangement for the future relationship between the UK and the EU is still being negotiated, there are a number of areas that businesses can continue to work on, regardless of the end arrangements.

ADS will continue to update the Brexit Hub and Risk Register with details as future guidance becomes available.

The UK Government has launched a public information campaign to help people and businesses prepare for the end of the transition period.

The new campaign – Check, Change, Go – works in a similar way to the previous ‘Get Ready for Brexit’ campaign. Individuals and businesses answer a series of questions on gov.uk and will then be presented a list of relevant guidance to read and act upon.

Customs and Borders

What is being negotiated?

The UK is leaving the EU Customs Union, and as part of the future relationship with the EU, negotiations are underway for an agreement on customs and trade facilitation.

The Agreement aims to streamline customs arrangements covering all trade in goods, in order to smooth trade between the parties, while ensuring that customs authorities remain able to protect their regulatory, security and financial interests. These arrangements will not replicate the relationship the UK has with the EU currently and will therefore introduce certain degrees of friction to trade.

In addition to this the UK has published a Border Operating Model which details how the UK plans to operate a full external border in the future. The requirements from the EU side depend upon individual member states, which may be streamlined if an agreement is reached.

What happens if there is no agreement?

Whether or not an agreement on customs and trade facilitation is reached for goods moving between Great Britain and the EU, there will be requirements for full customs declarations and procedures as with third country movements.

The exact detail of requirements depends upon the type of goods being moved, where they cross the border and how they are being moved, but businesses should be preparing for full customs declarations and checks.

What can I do to prepare?

  • Register here for an Economic Operator Registration and Identification (EORI) number, you need this to be able Import and Export goods. There are slightly different arrangements for Northern Ireland – this is set out in the same guidance
  • Check the terms of your existing contracts with your customers and suppliers
  • Plan how your business will deal with customs declarations
  • Appoint a customs broker/intermediary to make customs declarations on your behalf
  • Check if customs guarantees and simplified procedures will be helpful for your business and complete the application processes
  • Identify the staff that can be trained on customs and apply for HMRC grant funding
  • Use the guidance available at https://www.gov.uk/transition
  • Speak to your local chamber of commerce, they are experienced in International trade and can help guide you
  • To ease the introduction of customs formalities, the UK government is offering a phased implementation of customs requirements for GB imports from the EU over six-months, but export declarations will apply from day one.

Businesses should consult Government guidance for the required process for importing goods from the EU importing and exporting goods to the EU.

For businesses trading goods under export control or for dual use, there may be a requirement to secure an EU dual-use OGEL. This will be required if you are exporting dual-use items in Annex 1 of EU Regulation 428/2009 to any EU member state from 1 January 2021. Further information is available on GOV.UK to help members identify what licenses they need, if any.

Webinar on new Border Operating Model

On 22nd October 2020 The Border Protocol Delivery Group (BPDG) joined HMRC and BEIS colleagues in an ADS webinar for members. Speakers provided an overview of the new Border Operating Model and guidance on importing and exporting at the end of the transition period. Although we were unable to record the webinar due to the developing issues, we are able to share a copy of the Q&A that took place as part of the event along with the links shared to additional government guidance.

Aviation Safety

What is being negotiated?

The UK Government has stated its intention to leave the European Aviation Safety Agency (EASA) and is negotiating a bilateral aviation safety agreement (BASA) with the EU. There is currently little certainty as to what the BASA will include. ADS will update its risk register to reflect any progress made in negotiations over the coming weeks and months.

What happens if there is no agreement?

The CAA would recognise current EASA certificates, approvals and licences for use in the UK aviation system and on UK-registered aircraft at least for a period of two years following the end of the transition period.

Ahead of a possible no deal exit in 2019, the European Parliament passed legislation that ensured EASA Type Certificates, DOAs, ETOs & ETSOs issued to UK organisations would be recognised by EASA for 9 months after Brexit. It has not been confirmed that this will apply at the end of the transition period.

You may wish to sign up for updates from the CAA on Brexit, and a whole host of other topics, via SkyWise.

What can I do to prepare?

  • Design approval holders need to apply to the CAA for a UK DOA.
  • UK production and maintenance organisations should apply now for EASA third-country approvals in order to continue producing parts for, and maintaining EU registered aircraft.
  • For detailed, technical information on what will change, and what you should do to prepare, visit the CAA’s Brexit microsite.

Webinar – What you need to know about aviation safety regulation from 1 January 2021

On 8 October 2020 Tim Johnson, Director of Policy and Strategy at the Civil Aviation Authority (CAA) explained the regulatory changes, their preparations, and how you can secure the required certifications and approvals to place goods on the UK and EU market at the end of the transition period. Members can access a recording of the webinar here along with a document containing all the answers to the questions asked at the webinar.

 

 

Chemicals

What is being negotiated?

Regardless of the outcome of negotiations, the UK will not be members of the European Chemicals Agency (ECHA) and will no longer participate in EU REACH. A new UK REACH regime will apply in the UK from the end of the transition period. The negotiations will, primarily, focus on data sharing between the two separate regulatory regimes.

What happens if there is no agreement?

Without an agreement on data sharing, companies will have to pay EU substance information exchange forums (SIEFs) for access to the data themselves. This is likely to be extremely costly.

What can I do to prepare?

The information below applies regardless of the outcome of negotiations.

Producing or importing chemicals into Great Britain

In an effort to minimise initial cost and disruption to industry, the UK Government will transfer existing registrations held by UK companies on the EU REACH system to the new UK REACH system without a fee.

There will be then two steps for businesses to take:

  1. Within 120 days, UK companies with EU registrations will have to notify the HSE and provide basic data such as company name, company details, substances registered, quantities produced and evidence of their existing ECHA registration.
  2. Within two years of the 300 day deadline (28th October 2021), a full information package to support the registration will be required, depending on tonnage band.

If you are importing chemicals from the European Economic Area (EEA) then there is a slightly different notification timeline:

  1. Within 300 days, companies would be required to notify the HSE of the substances they import from the EEA, including basic information about the substance and its safe use;
  2. Within two years of the 300 day deadline (28th October 2021), a full information package to support the registration would be required, depending on tonnage band.

The exact processes are still being finalised. If this will impact you, sign up for updates through the HSE website.

Exporting chemicals to the EU

If you are moving chemicals into the EU you have two options:

  1. Ensure that the importer holds an EU REACH registration for the substance or;
  2. You can appoint an Only Representative in the EU to register the substance.

Further detail is available on the ECHA website.

Data

What is being negotiated?

The EU Commission is completing a data adequacy assessment on the UK. Upon completion of this assessment, a decision will be made as to whether the UK will be awarded adequacy status. If it is, then data will be able to flow freely between the UK and the EEA, as it does now.

The prospects of adequacy being awarded were dealt a major blow on 6th October following an ECJ ruling on the UK’s collection of bulk communications data for national security agencies.

What happens if the UK is not awarded adequacy status?

The UK’s current position is that it will allow data to flow freely to the continent after the transition period. Should the EU not award adequacy status to the UK in time for the end of the transition period then it is up to individual businesses to put in place additional legal safeguards to allow data to flow from the European Economic Area (EEA) to the UK.

What can I do to prepare?

Following the ECJ decision, we strongly advise that you take action as soon as possible. You should speak to any customers or suppliers based in the EEA to establish a legal basis for data transfers. The Information Commissioner’s Office website provides detailed guidance about what steps to take, for example to establish a standard contractual clause to keep data flowing.

Workforce

What is being negotiated?

As part of the negotiations on the free trade agreement, the UK and EU are seeking to reach an agreement on mutual recognition of professional qualifications and temporary entry and stay for business purposes. There is currently no clarity on what the arrangements will be from 1st January.

What happens if there is no agreement?

If a deal is not agreed and ratified by 1 January 2021, companies should follow FCO travel advice for applying for work visas in EU countries and consider what ‘right to work’ checks might apply.

What can I do to prepare?

The UK has protected the rights of EU citizens in already in the UK before the end of the transition period. If members of your workforce are EU citizens, they should apply for Settled Status by 30 June 2021..

R&D and Space Programmes

What is being negotiated?

The UK is considering a relationship in line with non-EU member participation in EU programmes such as: Horizon Europe, Euratom Research and Training, and Copernicus. There is currently no clarity on what the arrangements will be from 1st January.

What happens if there is no agreement?

In the absence of any formal arrangement, there will be no access to EU programmes for the UK.

What can I do to prepare?

The Withdrawal Agreement allows the UK to continue participating in EU programmes funded by the 2014-2020 Multi-Financial Framework (MFF). This means that UK companies can continue to bid for, participate in, and even lead Horizon 2020 projects. This includes projects that run beyond the end of the transition period. Detailed guidance can be found on the UKRI website.

Northern Ireland

What is being negotiated?

The unique situation on the island of Ireland means a different approach is required for moving goods between Northern Ireland and the Republic of Ireland, and moving goods between Great Britain and Northern Ireland when compared with the wider UK-EU relationship.

ADS has prepared a short summary of how this will work and what new processes businesses will be exposed to. Detailed guidance on moving goods under the Northern Ireland Protocol can be found on gov.uk.

Actions to take now

If you do any of the following, you will need an Economic Operator Registration and Identification (EORI) number that begins with XI:

  • move goods between Northern Ireland and non-EU countries
  • make a declaration in Northern Ireland
  • get a customs decision in Northern Ireland

You must already have an EORI number that starts with GB in order to get this.

While we await further detail in the form of a “Northern Ireland Border Operating Model”, there is one other specific action you should take to prepare now. Simply, if you are in Northern Ireland or do business with a company in Northern Ireland you should sign up for the Trader Support Service (TSS).

The TSS is a free service targeted at businesses trading in or with Northern Ireland and will provide initial support in key areas of change including:

  • Guidance and training to support traders implementing changes arising from the Northern Ireland Protocol including new declaration requirements
  • Enable traders to make declarations with purchasing software
  • Help traders save time in completing declarations

If you sign up to the TSS before 23 November 2020 you will automatically be assigned an XI EORI.

Webinar – How the Northern Ireland Protocol will affect your business?

On 24 September 2020 EY experts Sally Jones and David Reaney discussed the Northern Ireland Protocol and how it will affect businesses, including what actions businesses can take now to prepare for the changes and what areas are still awaiting clarification. Members can watch the recording here.

Readiness webinars

As well as the ADS fortnightly Brexit webinar series, there are a number of webinars you may wish to sign up for in order to help with your preparations. This list is updated on a weekly basis. View list here.