05 Dec One-stop-shop solution for Brexit
With the UK elections only days away (12 December), tensions are once again rising in the Brexit-saga that has now been going on for over two years. As Brexit-specialists, we get a lot of questions from clients, partners and media. This article provides you with the latest status, the possible outcomes and solutions with regards to Brexit.
After near catastrophes in March and October, the Brexit-debate is entering its next phase with the upcoming UK elections. We’ll discuss the options after the elections, but first we’ll explain the current status of the Brexit discussions.
Where we stand
The UK elections will take place on December 12. Based on the parties’ campaign promises, we identify the following scenarios:
1. The Conservatives win a clear majority: in this case Mr Johnson will push through his deal, the UK will immediately leave the EU and a transition period until the end of 2020 will be used to negotiate a trade deal between the EU and the UK. On 1-1-2021 all shipments between EU and UK would be subject to customs formalities.
2. Labour (or a leftist coalition) win a clear majority: the new government would most likely engage in new negotiations with the EU. Even though the EU said the Johnson-deal would not be renegotiated, they are expected to comply with the new government’s request since that new government would likely favor a deal in which the UK stays more closely aligned with the EU. According to Labour-leader Corbyn, his government would then organize a referendum for the UK electorate to determine whether they want this new deal or no Brexit at all. This process will lead to another delay of at least six months.
3. A new parliament without clear majority: in case the elections produce a hung parliament, there would likely be no clear majority for any Brexit outcome. It is unclear how the Brexit-debate would move forward in this scenario. This scenario could even result in the outcome almost nobody wants: a no-deal Brexit.
What this means for you as a trader
Many traders are putting their Brexit preparations on hold until the UK elections. This is understandable. But as soon as it becomes clear which of the above scenario’s will materialize, it is essential to prepare in accordance with that scenario.
At things stand, scenario 1 is the most likely outcome. In that case traders have one year to become Brexit ready. This may sound like a long time, but if you want to have a smooth operation on Day 1, you must act. SGS Maco is already running test orders with some of our clients to make sure the process is as solid as it can be on Day 1.
An important thing to consider in your Brexit preparations is that some of the most important simplifications introduced by the UK were only intended to be implemented in a no-deal scenario; it is uncertain whether they will also be available in case of an orderly Brexit. The most important of these simplifications is the Transitional simplified Procedure that would allow importers in the UK to file their first import declarations six months after customs formalities become due for EU-UK trade. If TSP is not part of the new UK customs set-up, then all traders will have to have a solution in place to make import declarations in the UK on January 1 2021.
Many traders and logistics service providers are looking for a one-stop-solution for Brexit. One partner who can help you meet all customs obligations both in the UK and on the EU-side. SGS can offer this solution. SGS Maco in The Netherlands and Belgium and SGS UK in the UK offer the full range of customs brokerage and customs software solutions. We are helping both traders and logistics service providers to be Brexit ready. If you want to know more, have a look at our Brexit webpage.