Exit Day
Importing into the UK: Are you ready for Brexit?
Exit Day | Importing into the UK: Are you ready for Brexit?
Exit Day
Importing into the UK: Are you ready for Brexit? The process for importing goods from the EU will change from 1 January 2021, with a new customs border being created between the UK and the EU. Brexit negotiations are still ongoing with much uncertainty. Whether or not an agreement is reached, goods will need to have customs declarations covering their movement in and out of the UK. In addition, if you trade between the UK and Northern Ireland, then goods moved into Northern Ireland will require a movement declaration. Even with a trade agreement with the EU, there will still be a need for customs, and safety and security declarations, which will have to be filed for the movement of goods between the EU and the UK. Liza Zucconi Partner liza.zucconi@laytons.com +44 (0)20 7842 8092
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Exit Day | Importing into the UK: Are you ready for Brexit?
UK Global Tariff As of 1 January 2021, the UK Global Tariff (UKGT) will apply to goods imported into the UK, replacing the EU’s common external tariff which applies until the 31 December 2020. The UKGT will apply to all goods imported into the UK from any country, unless one of the following applies: • an exception applies • the goods comes from countries that are part of the Generalised Scheme of Preferences • the country you are importing from has a trade agreement with the UK
What goods are being imported into the UK? From the 1 January 2020, the rules for importing some types of goods will change (with a period of grace for certain products). Importers will need to check what import licence or certificates they may need. Importers may also need to pay an inspection fee for some goods before they are allowed into the UK. There will be new rules for animals, plants, food and agricultural products, and drugs, chemicals and waste. Marking, labelling and marketing standards will change as well. From 1 January 2021, UK businesses will need an EORI number to move goods between Great Britain (England,
Import declarations Companies importing goods into the UK from the EU will need to make Import Declarations to HM Revenue and Customs (HMRC). These rules currently apply to importing
Scotland and Wales) or the Isle of Man, and the EU. A separate EORI number may also be required if goods are moved to or from Northern Ireland. If the UK buyer does not have an EORI, it may have increased costs and delays.
Manufactured Goods
goods from the rest of the world, including Switzerland, Norway, Iceland and Liechtenstein. A business can either
What an importer will need to do with manufactured goods
make customs declarations itself if importing goods, or
from the 1 January 2020, will depend on what types of goods
engage someone to deal with the customs declarations, for
will be placed on the market. If an importer already placed
example, a freight forwarder, customs agent or broker or fast
goods on the UK market before the 1st January, there is no
parcel operator. It is essential that EU sellers and UK buyers
need to do anything new. The goods can circulate until they
check the new rules for the goods imported.
reach their end user, and do not need to comply with the changes that take effect.
Food labelling An importer will need to ensure labelling and technical documentation on all manufactured goods conforms from the 1 January 2020, if it is being imported after this date, although the UK government has extended the deadline on labelling changes to the 30 September 2022.
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Exit Day | Importing into the UK: Are you ready for Brexit?
Commercial Contract Terms
Delivery
From our experience, contracts for the purchase of imported
In contracts, a supplier will usually endeavour to exclude “time
goods have been drafted on the basis of the UK being a
being of the essence” for deliveries. Brexit (in whichever form)
member of the EU, with no duty tariffs, no import checks,
will result in delays in deliveries. The parties to sale of goods
freedom of movement of people, and jurisdiction and
contracts should therefore consider this aspect carefully,
applicable law provisions in case of dispute. All contracts
as it may carry consequences in damages for late delivery.
should be reviewed to ensure no conflict with the effects of
Under English law (unlike a number of civil law systems) Force
Brexit.
Majeure is not implied into a contract. In the absence of a Force Majeure clause, we have seen parties argue that the
Buyer v Supplier Duty Obligations
common law doctrine of Frustration of Contract should apply, but these claims or defences usually fail as they are difficult to advance and English courts construe Frustration as narrowly
Your Terms and Conditions of purchase/sale may contain
as possible. Accordingly, consideration should be given as to
provisions which may need to be amended as a result of
whether express Force Majeure clauses should be inserted into
Brexit. If the Terms and Conditions are silent on who pays
contracts governed by English law.
the duty, this may lead to a dispute between the parties. Parties have to understand exactly the consequences of their obligations. For example, where there is a provision for
Conclusion
Delivery Duty Paid (DDP), duty is paid by the supplier and the buyer will not have to pay the tariffs; it is also the supplier’s
As we approach Brexit on 31 December 2020, with or
obligation to deal with customs formalities and clearance for
without a deal, the reality is that businesses are concerned
goods for import.
because of the uncertainty. Any commercial entity, whether buying or selling, should review their terms and conditions of business and understand exactly what their obligations are and how they fit into the new world from the 1 January 2021. Particular care and consideration should be given to who pays the duties, who deals with the customs obligations, how are delays dealt with and whether the applicable law and jurisdiction of the contract deals with the requirements of the new regime. Our experience of international business is unrivalled and we can assist in advising on any contractual or other issue that arises from Brexit.
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Exit Day | Importing into the UK: Are you ready for Brexit?
Expertise
Corporate & Commercial We provide a complete range of corporate and commercial advice and support for clients who extend from start-ups, individual entrepreneurs and family offices to multinational corporations. Our teams focus on acquiring a deep understanding of the particular needs and objectives of our clients to deliver advice and outcomes that are tailored to those needs and objectives and which meet them swiftly and cost-effectively. The approach to technical problems is informed, insightful and proportionate, and we take pride in viewing problems from a fresh perspective to provide innovative solutions.
John Gavan
Esther Gunaratnam
Dimitri Iesini
Partner john.gavan@laytons.com +44 (0)20 7842 8000
Partner esther.gunaratnam@laytons.com +44 (0)20 7842 8000
Partner dimitri.iesini@laytons.com +44 (0)20 7842 8081
Robert MacGinn
Daniel Oldfield
Daniele Penna
Partner robert.macginn@laytons.com +44 (0)20 7842 8000
Partner daniel.oldfield@laytons.com +44 (0)20 7842 8037
Partner daniele.penna@laytons.com +44 (0)20 7842 8053
Johnathan Rees
Christopher Sherliker
Cameron Sunter
Partner johnathan.rees@laytons.com +44 (0)20 7842 8009
Partner christopher.sherliker@laytons.com +44 (0)20 7842 8015
Partner cameron.sunter@laytons.com +44 (0)20 7842 8036
Liza Zucconi Partner liza.zucconi@laytons.com +44 (0)20 7842 8092
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