How to export to the EU in the post-Brexit world
Following the end of the EU transition period in 2020, many businesses have spent the first weeks of January adapting to the new processes, particularly those who rely on trade with the EU. This has included increased red tape, which has put some firms off trading with the EU altogether.
Despite the changed protocol to do so, the agreement of a UK-EU trade deal in December means that opportunities still lay in trading with the EU for businesses willing to seize it. However, doing so means being prepared, understanding how to do so and creating a realistic strategy.
In this guide, we will explain what you can do to continue or start to export with the EU in the post-Brexit landscape, including the measures you need to be aware of before doing so.
- Account for increased costs
- Understand the processes
- Have resource for documentation
- Offer realistic time frames
Account for increased costs
One of the first things you need to account for before deciding to trade with the EU is any increased cost. The agreed trade deal between the UK and EU thankfully limited some of the potential new costs associated with trade by reducing the impact of tariffs – but this does not necessarily mean that costs won’t fluctuate in other ways.
Under the new trade processes, increased effort is required by exporters, who need to fulfil new documentation requirements, as well as pay to undergo checks on some products before they can be sold in the EU (such as veterinary checks on livestock). Due to increased bureaucracy needed for trade, many businesses may see their costs rise as they employ additional resources or invest in equipment to meet the requirements more efficiently.
Additionally, businesses may need to account for duty, as well as the rising costs of their own supplies as the changes take their toll on the entire supply chain.
If you are considering exporting to the EU, it is therefore essential that you fully account for and understand the costs so doing so. This will be dependent on the goods you wish to ship, so be sure to understand the specific requirements for products and work out the cost implications accordingly. By doing this, you will be able to determine whether EU exporting opportunities make financial sense for your company – and seek alternatives if not.
Understand the processes
In order to ensure that any goods you ship to the EU arrive smoothly, it is vital to be aware of the rules you need to follow. The requirements will vary depending on what it is you want to export but could include having specific licenses, product health checks, certificates or providing pre-notifications. Some goods may also have restrictions on them, depending on their destination country. You can find out the rules for different products via the government website.
Manufactured goods entering the EU will also need to follow rules of origin, which determines that at least 45% of parts of the exported product need to come from either the UK or the EU. Currently, a grace period allows UK exporters to send goods without providing proof of origin, but this will end on 31st December 2021. At this point, you will need to provide evidence of the source of parts in any manufactured goods you send to the EU. So, bear this in mind as part of your plans, particularly if you intend to export to the EU for the foreseeable future.
From 1st January, any UK goods crossing into the EU will be subject to full border checks, so you must make sure your products meet the correct protocol and have the necessary documentation to allow them to pass these checks. Without this, you may experience disruption and delay to the detriment on both you and the customer.
Have resource for documentation
As we have already mentioned, the new Brexit rules mean an increased need for documentation when trading with the EU. This has already been a sticking point for many UK businesses, who previously enjoyed the free movement of goods under the single market.
If you are to export goods with the EU, you therefore need to submit the relevant documentation to allow your products to cross the border. This particularly applies to customs declarations, which are now required on all exports.
Submitting customs declarations can be a time-consuming task, with specialist software required to do so. As such, you must have appropriate resource to file these declarations correctly on all of your exports. One way to do this is to hire an external individual or company to act on your behalf.
If you choose to handle customs declarations internally, it is essential to be able to access the customs system and have a properly trained individual to use it. This will minimise any errors and allow you to transport your goods in accordance with the guidelines.
Offer realistic time frames
The added elements of border checks and customs declarations means that more effort is involved in exporting to the EU, and this may translate into increased time until successful delivery. Delays could take place ahead of goods leaving your business (if you have to submit documentation) or when crossing the border (in the event of queues or border control issues). As a result, you may need to adjust the timeframes in which customers can expect your goods to arrive.
Delays have been widely reported in the media already. However, it is worth noting that we are still in the early stages of the UK’s new relationship with the EU, with many still adjusting to process changes, and it is hoped these delays will settle down over time. Once this happens, companies will have a better idea of realistic delivery times for their goods.
It is also fundamental that you are more honest with your customers regarding the potential delivery delays for any products they order. This will allow you to manage expectations and keep your customers satisfied, as well as minimise any additional disruption to the supply chain.
As we begin to realise the realities of Brexit, we know that it can be a tricky time for businesses. If you need help adapting your operations for the new UK-EU relationship, or are seeking new ways to seize opportunity, we are here to help.
Our team of advisors has expertise in a wide range of topics, covering trade, finance, employment and more. Using this knowledge, we can provide bespoke guidance for you, tailored to your individual needs and challenges.