Import, export, logistics

SME Toolkit: Trading with the EU and Northern Ireland

SME pack for trading with the EU and Northern Ireland
Import Licences and certificates from 1 January 2021

From 1 January 2021 you’ll need to get a licence or certificate to import some types of goods into the UK. You might also need to pay an inspection fee for some goods before they are allowed into the UK. You can find out more here.

Export Licences and certificates from 1 January 2021

From 1 January 2021 you’ll need to get a licence or certificate to export some types of goods from the UK.  You can find out more here.

Rules of Origin

With the signing of the UK-EU Trade and Cooperation Agreement, the vast majority of traders moving goods between the UK and EU will avoid paying tariffs on that trade. In order to avoid paying tariffs, all traders must – from 1 January – ‘claim preference’ by way of meeting the relevant Rules of Origin (RoO) for their products and making a declaration to that effect.

Businesses should ensure that the following actions are carried out as soon as possible so that they are ready to use the Agreement:

  • Check the rules that are applicable to their products to ensure that the products are originating in either the UK or EU and can therefore be traded on preferential terms. The general rules are found in Chapter 2 of the Trade and Cooperation Agreement and the ‘Product Specific Rules of Origin’ are contained in Annex ORIG-2.
  • Consult accompanying GOV.UK guidance [link below]
  • Make sure they and their EU suppliers/customers have agreed whether a claim will be based on an exporter’s declaration or on the importer’s knowledge, informing customs agents as appropriate
  • Get ready to make the appropriate statement on the commercial and customs documentation for all consignments being traded on and after 1 January

The relevant GOV.UK guidance on claiming preference, including links to the Agreement itself and information about customs codes etc., can be found here, alongside longer-form guidance on RoO in the agreement. Every business should consult the Agreement itself and the official guidance linked to above before acting.

To benefit from preferential tariffs when importing into the UK from the EU (or importing into the EU from the UK), the importer will be required to declare they hold proof that the goods comply with the rules of origin.

You’ll be entitled to claim the preferential rate of duty if you have either:

  • a statement on origin that the product is originating made out by the exporter
  • the importer’s knowledge that the product is originating

If you’re delaying your declarations for goods imported into the UK from the EU you only need to include the declare a proof of origin when you make your supplementary declaration.

A claim for preferential tariff treatment and the basis for that claim shall be included in the customs import declaration in accordance with the laws and regulations of the importing Party.

If using an exporter’s statement, that statement shall be made out using one of the language versions set out in ANNEX ORIG-4 of the Agreement, in an invoice or on any other commercial document that describes the originating product in sufficient detail to enable the identification of that product. The English language version is below:

The exporter shall be responsible for providing sufficient detail to allow the identification of the originating product. A statement on origin shall be valid for 12 months from the date it was made out or for such longer period as provided by the Party of import up to a maximum of 24 months. A statement on origin may apply to:

  1. a single shipment of one or more products imported into a Party; or
  2. multiple shipments of identical products imported into a Party within the period specified in the statement on origin, which shall not exceed 12 months.

(Period: from___________ to __________ )

The exporter of the products covered by this document (Exporter Reference No … ) declares that, except where otherwise clearly indicated, these products are of UK/EU [please choose] preferential origin.

…………………………………………………………………………………………………… (Place and date)

…………………………………………………………………………………………………… (Name of the exporter)

[In the EU the Exporter Reference Number will be the exporters Registered Exporter (REX) number.  These are allocated if the exporter is exports consignments with a total value exceeding €6000. In the UK, the Exporter Reference Number will be the Economic Operator Registration and Identification (EORI) number. If the statement on origin is completed for multiple shipments of identical originating products within the meaning of point (b) of Article ORIG.19(4) [Statement on Origin] of the Agreement, indicate the period for which the statement on origin is to apply. That period shall not exceed 12 months. Importations of the product must occur within the period indicated. If a period is not applicable, the field may be left blank.]

Rules of Origin: Additional Support
  1. Rules of Origin FAQs pdf (February 2021)
  2. Rules of Origin one-pager for SMEs
Presentation: click on the image below to download a pdf
Clarification on the impact of the UK leaving the EU customs union on the tariff treatment of different goods

Rest of the World-Origin goods: goods that are released into free circulation (i.e. customs cleared) in the EU or UK, if they are then sent to the other party without further processing that would meet the product-specific rules of origin in the UK-EU Trade and Cooperation Agreement (TCA), will have tariffs applied to them no matter what length of time they spend in one territory, unless they are kept under customs supervision while there.

To avoid paying duties on the initial import, the first option that would be available if a company is holding on to the goods in the UK or EU for any significant length of time ahead of re-exporting them, would be to apply to either operate a customs warehouse yourself or store the goods in another customs warehouse and use the Transit procedure on shipping goods to it, so the goods would effectively never clear customs in the first place.

Where there is a preferential trading arrangement in place between the EU or the UK and the third country where the RoW good originates from (e.g. Japan), businesses could check the ‘Direct Transport’ or ‘Non-Alteration’ clause of the relevant agreement to determine the conditions under which RoW-origin goods could transit through the UK or the EU and still be imported tariff-free into the final destination. However, these clauses often stipulate that the goods must remain under customs supervision in the middle country in the chain.

EU-origin goods that are released into free circulation (i.e. customs cleared) in the UK, if they are then sent back to the EU without any significant processing (see below for definitions of what is not enough), will have tariffs applied to them as well. This is also the case for EU-origin goods which are being moved from Great Britain to Northern Ireland and are considered ‘at risk’ of entering the EU.

To be eligible for zero tariff trade using the UK-EU TCA, there would need to have been some processing in the UK before exporting to the EU, or vice versa. The processing that must take place must be more significant than the following operations (which are taken from Article ORIG-7 of the UK-EU TCA [on page 30], with the agricultural and textiles-specific examples stripped out).

Examples of what is NOT significant processing
  • preserving operations such as drying, freezing, keeping in brine and other similar operations where their sole purpose is to ensure that the products remain in good condition during transport and storage;
  • breaking-up or assembly of packages;
  • washing, cleaning; removal of dust, oxide, oil, paint or other coverings;
  • simple painting and polishing operations;
  • sharpening, simple grinding or simple cutting;
  • sifting, screening, sorting, classifying, grading, matching including the making-up of sets of articles;
  • simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
  • affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
  • simple mixing of products, whether or not of different kinds; mixing of sugar with any material;
  • simple addition of water or dilution with water or another substance that does not materially alter the characteristics of the product, or dehydration or denaturation of products;
  • simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;

Operations shall be considered simple if neither special skills nor machines, apparatus or equipment especially produced or installed are needed for carrying out those operations.

If you are distributing EU-origin goods back to the EU and you have not carried out significant processing on them in the UK, the thing to check is whether the person importing the goods back into the EU could use Returned Goods Relief to avoid paying a tariff. Procedures for using this Relief differ across EU Member States (though the underlying rules are the same) but I have included the Irish guidance here as an example. The goods must be re-imported in an unaltered state, apart from any work that may have been carried out to maintain the goods in working order, and the goods cannot have been upgraded to increase their value.

It will be up to individual companies to decide if they qualify.

New rules for pallets and other solid wood packaging

It is important to bear in mind, that when the United Kingdom leaves the European Union, it will no longer enjoy the plant health exemption we have since ISPM 15’s introduction in 2002.

If there is a no-deal Brexit, then any goods being exported to the EU will have to be ISPM15 compliant. The EU exporters will also have to ensure that any pallets they use are also ISPM15 (International Standards for Phytosanitary Measures for wood packaging in the international movement of goods) compliant.

The essence of which will be that as wood packaging material is a low risk to plant health the level of inspection will be in accordance with the risk.
However, the industry, including UK and EU manufacturers, will have and have been working to achieving 100% ISPM15 compliance.