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[Interview] Brexit and the consequences to your supply chain

27 September 2018

Brexit which was voted for on 23rd June 2016 by referendum, will have a significant Customs, logistics, tax and financial impact for industrial supply chains.

Discover how GEFCO supports its customers during this delicate period of transition with Olivier THOUARD, GEFCO’s Customs and Tax Director.

1- Can you remind us of the main deadlines for the Brexit process and explain to us what the current situation is?

Brexit was voted for on 23rd June 2016. Following this referendum, Great Britain has decided to activate Article 50 of the Lisbon Agreement on 29th March 2017.

As a consequence, Great Britain will have to leave the European Union at the latest on 29th March 2019.

The negotiations of this withdrawal agreement are still in progress but are blocked on a number of subjects, including the difficult question of border management between Northern Ireland and the Republic of Ireland. Exchanges are currently in progress to try to reach an agreement by Mid-November 2018.

In case of an agreement, it will need to be approved by a vote from the European Parliament and the British Parliament. If an agreement is approved, a transition period will follow between 29th March 2019 and 31st December 2020. This transition period will enable all economic players to prepare themselves before 1st January 2021 and enable Great Britain to sign international agreements.

 In case of a failure in negotiation or approval, this will result in a « Hard Brexit » situation: March 29th (midnight EU time), Great Britain will become a third country without any international agreement. 
This outcome is not a favourable option for anybody but is still possible and has to be seriously considered by all economic players. 

 

2- What are the consequences of a « Hard Brexit » on Customs exchanges between the European Union and Great Britain?  

A « Hard Brexit » will generate the immediate restoration of a border between the European Union and Great Britain. As a consequence, all goods circulating between Great Britain and the European Union will be subjected to import and export declarations and potentially to customs controls (including phytosanitary inspection, certification of the goods, import licenses …).

These new controls will have  consequences on border crossing times and impact the smoothness of the supply chain. Any Customs duties to be paid will correspond to the basic tariff rules of the WTO, as there will be no preferential agreement.  

 

3- What do you advise to customers that are concerned by Customs exchanges between the European Union and Great Britain? 

As a first step, we advise our customers to analyse their possible exposure to the impacts of Brexit : number of exchanges between the European Union and Great Britain, analysis of their capability to generate invoices in line with international regulations, capability to manage Customs operations or choosing a broker for Customs operations, a valuation of potential Customs duties and an estimation of additional transport or storage costs. 

 

4- What expertise can be provided by GEFCO to its customers on Brexit? 

First of all, GEFCO can provide daily advice on negotiations, terms and conditions of a « Hard Brexit » with all representatives: Customs administrators, customers, professional associations …
Then, GEFCO teams can inform their customers on the operational and financial risks of a « Hard Brexit » on their supply chain: VAT rules, emission of invoices, choice of the Customs clearance location, impact on transport …
With this aim, GEFCO will plan regular communications on practical subjects such as the impact of Brexit, the next completion deadlines, new regulations and VAT rules. 
Lastly, GEFCO Customs teams offer tailor made optimised solutions to actively support customers through this period of transition. Thanks to its expertise in Customs and VAT, GEFCO is the preferred contact of its customers to manage and optimise  Customs, transport and VAT operations between Great Britain and the European Union.

Customs teams offer tailor made, optimised solutions to support customers during this major change.

Olivier THOUARD

GEFCO’s Customs and Tax Director - GEFCO Group

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