BREXIT: Consequences on the Import and Export of Goods
Keep up-to-date on the main consequences in the import and export of goods regarding the United Kingdom’s departure from the European Union.
In case the exodus of the United Kingdom from the European Union is confirmed, more so if a “Hard Brexit” scenario comes to pass, there will be direct implications on systematic trade with third-party countries. Local and national operators should be extremely prepared for this situation as it becomes more likely to happen. When it comes to the preferential origin of goods, the moment when the UK is to be considered a third-party country as well, the practical consequences shall convey to the following aspects:
Brexit is the name given to the United Kingdom’s departure from the European Union. It’s a combination of ‘Britain’ and ‘exit’.
1. WHEN EXPORTING
When exporting local products to third-party countries which have concluded preferential trade agreements with the European Union, it shall be necessary to reassess compliance with the applicable rule of origin under the Protocol of Origin of the Agreement, taking into account that raw materials originating from the United Kingdom which are incorporated into the final product to be exported and are treated as non-originating materials, will consider materials from a third party country — which mean that a product who was considered as originating from the EU would lose their status in the future.
This will also have a bearing on the control of proofs of origin requested by the customs authorities of the importing country which may question whether products declared to be of local preferential origin continue to comply with the rules of origin applicable after Brexit. The same applies to supplier declarations for products of local preferential origin issued by local operators in order to ensure traceability on the Community stage of both the traceable manufacturing processes.
This means that, under a international trade agreement concluded with the partner countries, local exporters wishing to claim preferential treatment for their goods should ensure that United Kingdom materials used in the manufacture of such products are identified and treated as originating in the determination of the preferential origin of the products in question and which, in the case of subsequent verification, are able to prove the local preferential origin of their products by showing that the inputs of the United Kingdom have not been taken in to account for local imports.
2. WHEN IMPORTING
When importing products from preferential countries into the European Union, local importers should also guarantee that the exporter in the partner country ensures that the declared preferential origin has not been obtained by bilateral cumulation with products of local origin which may include the United Kingdom, as these are now considered to be third party country materials, which are not subject to such bilateral cumulation.
Furthermore, in the case of subsequent verification, exporters from third-party countries may also have to prove, by applying bilateral cumulation for the purchase of origin for their products, the Community preferential origin of the EU materials used in the manufacture. In this context, EU importers should ensure that the third party country exporter is in a position to prove the local preferential origin of the imported product that they used in manufacture, being aware that UK material will be excluded from the process after Brexit.