The Chancellor of the Duchy of Lancaster, Michael Gove, has formally notified the EU that the UK will neither accept nor seek any extension to the Brexit Transition Period – something which under the terms of the Withdrawal Agreement could have lasted for as long as two years.
The announcement followed a meeting of the EU/UK Withdrawal Agreement Joint Committee (WAJC) – the last meeting before the deadline for a formal request (1 July 2020), and therefore the last opportunity to discuss and agree such an extension. In fact, only the WAJC can agree to extend to the Transition Period and it cannot do this via written procedure.
Having ruled out an extension means that from 1 January 2021 the UK will be outside the single market and outside the customs union, and therefore able to introduce its own approach to goods imported to GB from the EU.
Goods imported to GB from the EU: the new border controls
In a change of strategy from the plans outlined in February, full border checks on imports to Great Britain (GB) will no longer be immediately introduced on 1 January 2021, when the Brexit transition period ends. Instead, recognising the impact on companies of the COVID-19 crisis, new border controls – has been announced – will be introduced in three stages, up until 1 July 2021.
The stages, as disclosed by the Cabinet’s Office, are:
- From January 2021: Tariffs are due from Day One, but traders importing standard goods, covering everything from clothes to electronics, will have up to six months to complete customs declarations and pay the relevant tariffs, if any applies. Checks on controlled goods like alcohol and tobacco will stay, as well as on all “high-risk live animals and plants“.
- From April 2021: The checks will be extended to all the imports of products of animal origin such as meat, milk or egg products, which will require “pre-notification and the relevant health documentation”.
- From July 2021: Traders moving all goods will have to make declarations at the point of importation and pay relevant tariffs (which will be determined by the outcome of the current Brexit talks on the free-trade agreement). “Full Safety and Security declarations will be required”, and there will be “an increase in physical checks and the taking of samples”.
What about Northern Ireland?
The Cabinet Office’s new plan affects only trade between Great Britain and the EU. It does not cover trade between Northern Ireland (NI) and the Republic of Ireland – which will be covered by the NI protocol of the Withdrawal Agreement – or between NI and GB.
What about third countries?
These measures will not apply to third countries outside of the EU. Full import controls will continue to apply on trade between the UK and third countries outside of the EU.
What about exports to the EU?
Even if the UK does soften borders checks, Brussels will determine its own approach on British exports to the EU.
EU Commission Vice-President Maroš Šefčovič has already confirmed that the EU “will continue to fully protect the integrity of the single market and the customs union“: customs formalities, regulatory checks and animal health inspections on UK goods entering the EU single market might soon be introduced.
What does it mean for Businesses?
There’s a matter of months left to prepare, and still no overall Agreement between London and Brussels on how the future relationship between the UK and the EU will look like. Despite the uncertainty, what’s clear is that from the start of next year businesses operating between the UK and the EU will face a drastically different trading environment which will need immediate preparation.
Our Team of specialists is at your disposal to further discuss these subjects, answer any related queries and help your strategic planning ahead of Brexit.
