How to prepare your company for a possible Brexit without an agreement

11 April, 2019

Prime Minister Theresa May has asked for an extension of Article 50 to prevent the UK from leaving the European Union without an agreement. As we have said on other occasions, Brexit is expected to have major logistical consequences in Europe. As reported by the UK government, it is advisable to warn that there will be many customs and tax procedures to be implemented for both UK exporters and importers.

Theresa May has travelled to Berlin and Paris to meet with their leaders. The aim of this meeting is to obtain the support of the two great European powers in order to obtain an extraordinary extension until 30 June.

Road freight traffic between France and the United Kingdom poses a significant risk of congestion at border crossings in France.

If the exit from the UK is ratified, companies will have a two-year margin to adapt to the new situation, so it is necessary that companies are informed and start preparing as soon as possible.

Firstly, the current exposure of our company in the United Kingdom must be assessed, so that we can create a strategy and minimise the negative effects of a Brexit without an agreement. We must take account of our British suppliers and customers as they will drastically change customs formalities.

As far as the export of goods to the UK is concerned, if the UK eventually becomes a ‘third country’ it would be subject to the European Union’s current external tariff, although it could change later. For the time being, the tariffs and barriers that will have to be paid if this non-agreement Brexit goes ahead must be reviewed.

On the other hand, companies that import goods and components of British origin will have to check the documentation and homologation requirements established by the European Union with these “third countries”, as well as the trade barriers according to tariff.

We recommend that companies review supply contracts for renegotiation of price or payment terms, as import and export costs can change significantly. As far as the transport system is concerned, except for the minimums laid down in the agreements, British and Community logistics operators will not be authorised in the event of a Brexit without an agreement, so this could also have an impact on these costs.

Ultimately, companies must be kept informed at all times of the negotiations and processes that this Brexit is bringing with it. Visiting the official pages of the European Union will help us to be up to date at all times in the face of possible changes, including different reports depending on the field and the sector.

 

 

 

 

 

 

 

Fuente: PIMEC