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Brexit – changed customs regulations and impact on logistics

Brexit – changed customs regulations and impact on logistics

25. February 2021
Brexit

Almost two months have passed since the end of the Brexit transition period. A brief review: On 24th December, the EU and the United Kingdom agreed on a trade and cooperation agreement after months of negotiations. As a result, the British will no longer be part of the EU internal market and the EU customs union as of 1st January 2021. In the run-up to this date, the impending changes had already led to chaos at British ports because many companies had tried to fill their warehouses before the end of the transition period. 

How has the movement of goods changed in the last two months? 

At the beginning of the year, there was no major chaos, but what followed was reduced goods traffic. As reported by the German Business News Magazine WirtschaftsWoche, instead of 5,000 to 6,000 trucks, only about 2,000 have crossed the channel on ferries. According to the report, about one fifth of all incoming trucks were returned due to faulty or defective papers. Furthermore, there have been problems with the export of foodstuffs.  The transport of fish partly had to be stopped completely because numerous additional papers, such as health certificates and customs declarations, delayed the transport. Furthermore, DB Schenker and the parcel service dpd had suspended transports in the meantime. 

Changed customs regulations and more bureaucracy 

With Brexit also customs relations have changed. Customs and import declarations are now required for all goods imported from the UK into the EU and vice versa. High costs and long waiting times at border crossings arise especially when different types of goods are transported. By the way, the exemption of duty applies only if the goods originate in the EU or UK (as the exporting country). This means, the goods first need to comply with the appropriate rules of origin. If they do not meet the rules of origin requirements or if it cannot be proven that they do, custom duties will still be due (see trade and and cooperation agreement, Chapter 2). 

Now one could ask why all this additional effort is necessary at all despite the trade agreement. Since the UK is no longer in the EU internal market and the EU customs union, there is no longer any obligation for the country to comply with EU standards. Besides, the UK can now conclude independent trade agreements. More controls and documentation efforts are therefore intended to ensure that quality standards are met and that goods from other third countries are not imported into the EU via the UK without paying customs duty. 

The Brexit problem with Northern Ireland

Northern Ireland posed another problem for the Brexit deal. In order to avoid a hard border between Ireland and Northern Ireland, special regulations apply to Northern Ireland with the “Northern Ireland Protocol”. This means, in contrast to the rest of the UK, the regulations of the EU internal market will continue to apply to the British province. This avoids the hard border between Ireland and Northern Ireland but creates a new goods border with the rest of the United Kingdom instead. 

The new procedures have caused major delays, with the result that some foodstuffs could no longer be delivered to Northern Ireland and empty supermarket shelves followed. From April, after the end of the three-month transition period, the regulations will be tightened even further. However, according to the BBC, Britain has already asked the EU for an extension of grace period until 2023.

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