No Deal Brexit Planning

Ireland will be the EU Member State most affected by the UK’s decision to leave the European Union and we need to recognise that this is happening – the UK is leaving the EU and some things are going to change.  Businesses that buy and sell from the UK should have contingency plans in place which will need to be flexible to cope with a variety of possible outcomes.

There is still uncertainty around what Brexit will mean and planning for a “No Deal” scenario seems sensible right now. 

If a ‘No Deal’ happens after March 2019 here are some of the areas you should consider:

The UK will become a “3rd Country” for customs purposes as it will be outside the EU. Ensure you understand the basic principles underpinning and requirements of customs formalities for non-EU trade and how and where they apply, including import, export and transit formalities.

For some businesses this will be new, so check out the Customs Brexit Information Seminar slides: https://www.revenue.ie/en/customs-traders-and-agents/documents/customs-brexit-Information-seminar-presentation.pdf

If you trade regularly with the UK then you should consider an Economic Operators Registration and Identification (EORI) number and register FOR Authorised Economic Operator (AEO) which enables “Trusted” businesses simplified customs procedures. See: www.revenue.ie/en/brexit for more details.

In the event of “no deal” all exports and imports to the UK will be subject to tariffs under the rules of the World Trade Organisation (WTO). You will need to identify where “inputs” come from and which categories of product they fall into so you can work out the tariffs that will apply.

If you have contracts with UK companies these may need to be redrafted to clarify the terms for trade, including VAT changes.  Enterprise Ireland has some further guidance: https://www.enterprise-ireland.com/en/

What’s clear is that Brexit requires you to have a good think about your future strategy planning.

Take some time to think about what needs to be done sooner rather than later.

Whether there is a “no deal”, a brief delay in the UK’s departure and a “deal” or a longer period of transition we advise all businesses to research all scenarios and “plan for the worst and hope for the best”.

In the event that the UK exits the EU without a deal, from 11pm GMT on 29 March 2019, many Irish businesses will need to apply the same processes to UK trade that apply when trading with the rest of the world (outside the EU).

No Deal Brexit Checklist

Here are some of the areas you should consider, particularly if you import or export goods to the UK and haven’t had the need to complete the various forms before. The checklist also considers general implications of a “no deal” Brexit.

#1 Contracts with UK Companies

  • If you currently have business agreements with UK companies these may need to be redrafted to cover off areas such as customs arrangements, import duties, how VAT is accounted for, definitions such as “Territory”, dispute resolution and unanticipated administration as a result of Brexit. Consult your lawyer for advice to avoid any potential issues sooner rather than later.
  • Copyrights, Intellectual Property (IP) and trademarks: At this point in time it is not clear if EU trade marks would be applicable in the UK post Brexit. If you own intellectual property rights contact your lawyer on protecting your IP post Brexit.
  • Management of currency risk. There has been a downward trend in the pound to Euro rate post the vote in 2016. Volatility may occur post Brexit and you should talk to us about managing your currency risk beyond the UK’s departure from the EU.

#2 Movement of Goods

  • Register (unless you already have) for an Economic Operator Registration and Identification (EORI) number which is necessary for importing and exporting.
  • Consider an agent to help with completing import/export forms or DIY the forms.
  • Contact your haulage company to check whether additional information is needed so they can make safety and security declarations for you.
  • Export rules are specific by sector so review: https://www.revenue.ie/en/customs-traders-and-agents/index.aspx
  • You may choose to register for “Authorised Economic Operator (AEO) status which enables “Trusted” businesses simplified customs procedures.
  • Review the slide presentation prepared by Revenue Commissioners, Dept. of Agriculture, Food and the Marine and HSE The Environmental Health service:    This outlines Customs and other procedures when trading with a 3rd Country (UK).
  • The Government have acknowledged that a “no deal” scenario may affect the working capital of many businesses and have outlined financial supports for business at: https://www.dfa.ie/brexit/getting-ireland-brexit-ready/brexit-and-business/
  • Consider forming a company in the UK. Talk to us about how we can help you with our colleagues in the UK.

#3 Supply Chain Analysis

  • In the event of “no deal” all exports and imports to the UK will be subject to tariffs under the rules of the World Trade Organisation (WTO). You will need to identify where “inputs” come from and which categories of product they fall into so you can work out the tariffs that will apply.
  • Review WTO rates online and check the tariff data for your business. See: https://www.wto.org/english/tratop_e/tariffs_e/tariff_data_e.htm 

#4 Product Standards and Compliance

The European committee for standardization (CEN) and the European committee for electrotechnical standardization (CENLEC) are the leading providers of voluntary European Standards and related products and services for the benefit of businesses, consumers and other standard users in Europe. They are independent of the EU. They provide a single model, whereby each European standard is adopted identically as a national norm. The British Standards Institute (BSI) is a member and will remain so after Brexit (this was agreed 23 November 2018). You should regularly review the situation for updates with reference to your industry sector.

#5 Contact Us for More Information

For more information on how we can help you with Brexit Planning contact our Carlow Office on 059 913 7040 or Dublin Office on 01 278 4455.