No Match Found
On 11 March 2019, the European Commission released a guidance note on customs related matters in case of a hard Brexit. Following yesterday’s vote in the House of Commons where again May failed to win a majority for her deal, the prospect of a withdrawal of the UK without a deal remains.
In light of this, the guidance note offers vital information for anyone selling, buying or moving goods through the UK.
Below we will give an overview of some of the most striking points from the guidance note.
Without a withdrawal agreement that foresees in a transition period, the UK will be a third country as from 30 March 2019 00:00h. This means that Union rules on customs will no longer apply to the UK. Furthermore, the UK will no longer have access to the customs IT systems of the EU.
As a general rule for the status of goods that are moving as intra-Union movement from the UK around the withdrawal date, the European Commission states that their treatment will depend on when they enter the customs territory of the EU. Goods arriving before the withdrawal date will keep their customs status of Union goods. As soon as the withdrawal date has passed, these goods will be treated as any other third country goods. For example, where required, these goods will then need coverage of an entry summary declaration (ENS). However, the returning goods exemption may be applied for Union Goods that are re-imported, provided sufficient proof is available.
As of the withdrawal date, customs formalities will require an EORI number. The commission stipulates that submitting the required data and undertaking the necessary steps for obtaining an EORI number can be done in advance of the withdrawal date. Customs authorities of the Member State should accept requests already before the withdrawal date and assign the EORI numbers
It is important to note, that a currently valid EORI number that is assigned by the UK customs authority will be invalid in the EU27 as of the withdrawal date. When you have a UK EORI number, you need to register with the customs authority of an EU 27 Member State and use this new EORI number when applying for customs decisions after the withdrawal.
Similar to UK EORI numbers, authorisations, decisions or registrations that were granted by the UK customs authorities will nog longer be valid after the withdrawal date. Authorisations, decision and registrations by EU27 customs authorities are also affected. They will need amending on the geographical coverage or any other aspect relating to the UK, and when granted to economic operators with a UK EORI number will no longer be valid as of the withdrawal date.
For example, when you have a binding tariff information decision (BTI decision) that is issued by the customs authorities of a EU27 Member State, which is linked to your UK EORI number, it will no longer be valid after the withdrawal date. This follows from the fact that the UK EORI number will be invalid after the withdrawal. Similarly, a BTI decision from the UK customs authorities will no longer be valid after the withdrawal date. In such cases, the commission advices to obtain a EU27 EORI number and subsequently to apply for a new BTI decision in the EU.
The guidance notes stipulate that goods from the UK will be non-originating goods under preferential trade arrangements after a withdrawal without a deal. This means that goods produced in the UK before the withdrawal date, but imported after, are not EU originating. A similar fate befalls goods produced in the EU27 before the withdrawal date and imported from the UK after.
Contrary, proofs or origin issued or made out in the UK before the withdrawal date will remain valid. Just like proofs of origin relating to goods with UK content from the EU27 dating from before the withdrawal date and certificates of origin issued by EU27 customs authorities for UK exporters.
The authorisations regarding special procedures (e.g. customs warehousing, temporary admission, inward processing, etc.) will be invalid after the withdrawal date when granted by UK customs authorities. Goods that are located in the customs territory of the EU under the authorisation granted by UK customs authorities must be discharged before the withdrawal date. This means that they have to be re-exported, placed under a subsequent customs procedure, destroyed or abandoned to the State.
Where goods placed under a special procedure in the EU27 are moved to the UK before the withdrawal date and are located in the UK as of the withdrawal date, the procedure will be deemed to have been discharged
If you have any questions regarding the above or require any assistance with verifying what this means for your company and what steps can be taken, please do not hesitate to contact your PwC Customs advisor.
The complete guidance note can be found by clicking on this LINK.
Senior Tax Director, PwC Netherlands
Tel: +31 (0)65 329 63 07
Senior Manager - Customs & International Trade, PwC Netherlands
Tel: +31 (0)62 293 16 98