Brexit – what does it mean for Swedish trade?
The United Kingdom is expected to leave the EU on 30 March 2019. However, it is not yet clear whether there will be an exit agreement between the United Kingdom and the EU.
With an exit agreement, there will be transitional provisions for trade between the United Kingdom and the EU up until and including 31 December 2020. This means that, throughout the transitional period, there will be no changes as regards trade in goods to and from the United Kingdom.
Without an agreement, all customs regulations for countries outside the EU will apply from 30 March.
For those who have not previously traded with countries outside the EU, we recommend that you prepare as soon as possible.
Customs transactions between Sweden and the United Kingdom
All investigations have indicated that Brexit will entail customs formalities in the trade between the EU and the United Kingdom. This means that, amongst other things, companies must:
- Submit entry/exit summary declarations and, when exporting, comply with the security and protection rules.
- Notify means of transport and present goods to customs (when arriving in the EU and at the export point from the EU).
- Submit customs declarations when importing and exporting.
- Apply import and export restrictions.
- Pay or submit guarantees for customs and other charges before goods can be released for going into free circulation.
Companies may also need various permits/authorisations. This may be for the import or export certain goods. Permits/authorisations may also be necessary for certain customs formalities such as inward and outward processing.
How can I, as a business operator, prepare?
Here are a few tips about what you can already do to prepare:
1. Carry out a risk analysis.
To clarify any consequences for your company, carry out a risk analysis of its operations.
2. Which rules apply to your goods?
- What are the regulations for your goods?
- Do your goods require permits for import to or export from the EU? Are special proofs or certificates required (e.g. for foodstuffs, agricultural products, pharmaceuticals and military equipment)? If the answer is yes, contact the correct authority.
- Are the goods processed in the United Kingdom or in the EU and is your company looking to receive a duty reduction when re-importing or re-exporting? If yes, your company may need to apply to Swedish Customs for authorisation for outward processing or for inward processing.
- Are your goods due to excise duties? Read about possible consequences on the EU Commission's website.
Read about excise goods in the EU Commission’s information about Brexit.
3. How do you transport your goods?
Check which transport companies your company uses and which routes these transport companies use. If these routes seem problematic, you may need to consider alternative transport routes. This may also apply where time is a critical factor in goods deliveries. Should you perhaps engage a customs agent?
- How are the goods transported to or from the United Kingdom? How well prepared are the transport companies that your company uses? What measures have these transport companies implemented to minimise disruptions in flows?
- Which are the current points of entry or exit for the goods? Check whether restricted non-Union goods can be imported or exported at these points. Contact the responsible authority and, if necessary, check alternative transport routes. Be prepared for delays if physical checks are necessary when your company’s goods are imported or exported.
- Do the goods come from a country with which the EU has a free trade agreement? Are the goods currently imported to the United Kingdom for further distribution within the EU? If the answer is yes, check if the direct transport rule applies in the agreement with the country from which the goods originate. If it does, the goods may lose their country of origin status and there will be no duty reduction or duty exemption when importing to the EU. Direct transport is when goods are transported directly from a consignor country to a consignee country. The aim of this is to prevent originating goods being manipulated or replaced in transit to the country that has granted the benefits of free trade.
- Is time a critical factor for the company’s goods? Consider how any delays in goods flows can be dealt with. What length of delays can your company accommodate with no negative effect on your operations? Is extended storage necessary to ensure supply?
4. Contact your suppliers.
Take the opportunity to contact your various suppliers and find out their plans and how they think they will be affected by Brexit.
- How well prepared are your suppliers in the EU and in the United Kingdom? What measures have they implemented to minimise disruptions in flows? Find out if your suppliers are planning the preparations necessary for handling Brexit. If they are not, encourage them to do so.
- What agreements do you have with partners in the United Kingdom? Do existing agreements need to be renegotiated owing to changed circumstances?
5. Check if you need proofs of origin.
Check whether the conditions for issuing proofs of origin are changing. If, for example, you export goods that have inputs from the United Kingdom, it may no longer be possible to issue EU proofs of origin when you export from Sweden to another country outside the EU.
If your trade currently includes United Kingdom inputs or finished goods that you then export, with proofs of origin, to partner countries, you should monitor how any future agreement with the United Kingdom will affect this trade.
Review the current origin assessments for your goods. Will the goods satisfy origin requirements without needing to “take into account” materials from the United Kingdom? Or will the goods lose their origin if the United Kingdom materials no longer have EU origin? Check what this will cost and perhaps compare alternative purchase routes for EU-origin materials that affect the origin assessments.
There is a risk that it may no longer be possible to provide EU proof of origin when re-exporting finished goods that are currently exported from the United Kingdom with proof of EU origin.
Important to follow developments
In brief, your company will be affected in various ways by Brexit. As there is great uncertainty about exactly what the effects will be, it is extra important that you follow the developments and prepare yourself and your company as well as possible.