The UK left the EU on 31 January 2020 and with the Brexit Transition Period having ended on 31 December 2020, the rules governing trade between the EU and the UK are now governed by the Trade and Co-operation Agreement which was agreed in late December 2020.
The Agreement has ensured that goods may continue to be traded between the UK and EU tariff-free, provided they comply with the relevant rules of origin. As such UK firms should be able to continue to compete with EU suppliers and vice-versa.
That said, the UK is a now a "third country" under EU law which means that customs declarations must be made for all goods being imported into the EU from the UK and likewise for EU exporters to the UK.
Furthermore, different regulatory regimes now operate in the UK and EU and so a number of products will need to comply with bespoke regulatory regimes – including safety, labelling and packaging which will be applied to all relevant goods entering the EU.
To assist UK importers, the UK Government has decided to phase in the licensing and certification requirements for certain goods, such as animals, plants, drugs and chemicals. Full compliance for all such products will only be required from 1 July 2021. Certain high risk products such as animals will, however, require full documentary compliance from 1 January and a second category of intermediate risk products from 1 April.
Different rules apply to Northern Ireland which effectively remains within the single market in order to avoid the need for a hard border with the Republic of Ireland. As such goods entering Northern Ireland from Great Britain are treated as imports to the EU and appropriate controls apply. To assist the grocery trade, for a limited period these rules will be relaxed for 3-6 months for food products.
Excise duties will apply to alcohol and tobacco products (with the return of "duty free" shopping for UK citizens in the EU).
It is not just goods traded between the UK and the EU that are affected. The UK has now assumed responsibility for its own trade defence measures under WTO rules (known as "trade remedies"), meaning that businesses around the world may find themselves subject to decisions by the UK to impose additional restrictions on imports in response to what it perceives to be distortive trade practices.
Finally and of significance to the UK economy, the Trade and Co-operation Agreement is largely silent on services – the ability to provide services in the EU will, subject to on-going negotiations with the EU, be a matter for each Member State to determine.
The overall impact is inevitably to generate more "red tape" for any business trading with Europe. (Those companies trading with non-EU countries will already be aware of much of the protocol for exporting from the UK).
Our trade practice advises and represents businesses in relation to trade related disputes, as well as providing day-to-day and strategic advice on compliance matters. In particular, we can advise on:
- interpretation of the Trade and Co-operation Agreement and the UK's other trade agreements;
- WTO rules and proceedings;
- trade remedies such as anti-dumping and anti-subsidy measures and quotas (both in relation to challenging / opposing decisions to introduce remedies and engaging with authorities to have them introduced); and
- customs disputes (e.g. classification, valuation and origin disputes, as well as disputes relating to e.g. seizures of goods).
As a firm, we also advise clients on sanctions compliance, state aid, UK foreign investment screening, trade related tax issues, and the regulatory implications of operating across multiple jurisdictions.
Some examples of our trade advice include:
- advising a publisher of children's books on a UK customs code dispute
- advising a major European retailer on Brexit-related business planning
- advising a global building materials company on sanctions issues
- advising a global engineering company on type approval and trade post-Brexit
- advising a manufacturer of dual use goods on export-licensing issues, including managing a Government investigation into potential unauthorised exports
- advising an Asian manufacturer on challenging anti-dumping duties imposed by the European Commission
- advising an automobile company on rules of origin applicable to the export of cars from the UK