G ROW I N G YO U R BUS I N E SS
Time is of the Essence Take time to understand the future of EU-UK trade Change is never easy. When the UK became a ‘third country’ for the purposes of trade and customs on 1 January 2021, it understandably caused a lot of well-documented challenges for Irish businesses, and for their counterparts in the UK. Although, it was never going to be an easy transition, the timing of Brexit, in tandem with a global pandemic, has challenged business to find the time to prepare for an uncertain future, when there was very little clarity as to what exactly lay ahead. While the conclusion of the EU-UK Trade and Cooperation Agreement (TCA) at the final hour was a positive outcome, as it eliminated the possibility of WTO tariffs, the announcement undoubtedly spread confusion. Many SMEs assumed that we had dodged a bullet and expected that there would therefore be no disruption, or no paperwork required, for trade between the UK and EU. At Cork Chamber, we have been listening to and advising businesses on some of the issues they have experienced since 1st January and have put together a few tips for consideration:
Don’t assume that someone else will take care of it!
Many SMEs who never had a contract in place with their UK supplier or customer, are now facing a dispute as to who must complete the customs paperwork. Reluctance by a UK partner or distributor to complete import declarations has resulted in some companies being forced to decide whether to set up their own UK entity or to try and find another partner in the UK to complete the import declarations on their behalf. Companies who may need to draw up a contract for the first time can find a handbook on model contracts on the website of the International Chamber of Commerce (ICC), where they will also find information on Incoterms (standard terms of trade for contracts that establish exactly where the risk and responsibilities lie for both the buyer and seller during the delivery process).
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Know your products inside out
Confusion around ‘Rules of Origin’ and what constitutes ‘proof’ of origin still remains a key source of uncertainty for many SMEs. If you are manufacturing, importing or exporting a physical product, it is vital that you know exactly what raw materials or components are used to make your product and the origin of these parts. Establishing the exact origin of a product which has multiple component parts can be a complex process but is an essential task. Depending on the origin of your product, you may be eligible for preferential or zero-rate tariffs and duties. However, mis-representing the origin of a product – either wilfully or mistakenly – could result in the company having to retrospectively pay any backtaxes and duties if uncovered by a customs audit.
Preferential status for EU and UK products
The EU has the world’s largest network of trade agreements comprising 46 agreements with 78 countries. You can check whether your products are eligible for ‘preferential status’ under any of these agreements by consulting the online Access2Markets database, recently upgraded by the European Commission, and containing product-by-product information for all EU countries and for more than 120 export markets around the world. In the case of products for which you are declaring EU or UK origin in order to avail of tariff-free trade with the UK, you will need to be able to prove the origin of your goods with backup documentation such as a supplier or manufacturer declaration. (In Ireland, Chambers of Commerce are the official bodies authorised by statute to issue and authorise documents called ‘Certificates of Origin’, however these relate to non-preferential trade. It is important to note therefore, that a formal ‘Certificate of Origin’ document is not required for EU – UK trade, except perhaps in certain cases, for example if your UK partner is later going to be re-exporting the product to another third country. If you have further queries on this process you can contact the Exports team at Cork Chamber for advice.)
