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Brexit – why do you have to worry and what should you do?

Brexit – why do you have to worry and what should you do?

The United Kingdom (UK) will leave the European Union’s (EU) single market and customs union on 31 December 2020. The end of the transition period will affect citizens, businesses and travel to and from the EU and the UK.

Please note! This means that from 1 January 2021 customs formalities will have to be completed for trade with the UK. If you do nothing, this is guaranteed to block your business.

If you want to know immediately what will change, scroll to the heading: New UK-EU relationship – it’s really going to be completely different!

For a brief explanation of where we are now, read on.

Agreed – and now what?

On 17 October 2019, after long negotiations, the United Kingdom (UK) and the European Union (EU) reached an agreement (The EU-UK Withdrawal Agreement) on the conditions for the UK’s departure from the EU – the so-called Brexit – after which the UK left the EU on 31 January 2020 at 23:00 GMT. Brexit was thus a fact on 31 January 2020.
So why don’t you notice this in daily life at this moment?

The Withdrawal Agreement sets out the conditions for the orderly withdrawal of the UK from the EU in accordance with Article 50 of the Treaty on the EU because the UK’s departure from the EU has various logistical and economic consequences for, among other things, trade between the EU and the UK.

In addition, a transition period of 11 months has been agreed for the post-Brexit arrangements between the EU and the UK to be negotiated and agreed.

Transition period until 31 December 2020 – what comes next?

During the transition period, nothing will actually change (yet!) for entrepreneurs because the UK will still have to comply with all EU rules and laws until and including 31 December 2020 in preparation for new agreements that will apply from 1 January 2021.

This transition period could have been postponed by up to 2 years if the UK had requested an extension before 1 July 2020. However, the UK has not made use of this option as result of which the EU rules and laws will no longer apply to the UK from 1 January 2021.

How the EU companies will do business with the UK by 2021 is still unclear as negotiations between the UK and the EU are still ongoing.

Negotiations – what will it be?

The UK is negotiating with the European Commission (EC) acting on behalf of the remaining 27 EU member states on the basis of a mandate.

The corona crisis has caused additional delays in the negotiations.

Since the UK and the EU cannot agree on many issues (e.g. import duties, fisheries, competition, European standards, etc.), it is expected that the negotiations will not result in a trade agreement on 31 December 2020 and a hard / no-deal Brexit by January 2021 will still be possible.

New UK-EU relationship – it’s really going to be completely different!

On 1 January 2021, the EU’s relationship with the UK will change dramatically – that’s for sure.
The Single Market – the European free movement of goods and people – will no longer apply to the UK.
Not only will there be more controls and administrative actions at the border, but also import and export declarations will become compulsory and entrepreneurs will have to deal with regulations for the import and export of products. All this will cause delays which will, among other things, jeopardize production processes.

Perform a Brexit baseline measurement of your company to make sure your company is prepared for the end of the Brexit transition period: on 1 January 2021, it is really time.
Does your company have direct or indirect business (relationships) with the UK? You still have – very limited – time to check (i) whether your agreements are still in place after Brexit, (ii) how your product line is set up and if it can handle the delays, (iii) whether your company is ready for the new customs formalities, (iv) whether your VAT administration is set up for the change or (v) whether you have your health certificates for all agricultural shipments to and from the UK etc.

What can you do now?

You need to carry out a Brexit Baseline Measurement in your company as soon as possible to know what you need to adjust within the remaining days to ensure that your company is not faced with unpleasant and unnecessarily expensive surprises on 1 January 2021.

Only after you know what you need to adjust can you start thinking about how to adjust it.

Act now!

To perform the Brexit Baseline Measurement, you need to know where to start and what to check. Send an email to info@acginter.com and use the subject “Brexit Baseline Measurement Checklist” and we will send you a free copy of the Brexit Baseline Measurement Checklist.

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Do you have a question? Please feel free to contact us. You can email to info@acginter.com.