Brexit: Being ready for any scenario and moving forward with digitisation
Jan 31, 2019 Comments (1)
With Brexit day rapidly approaching, businesses are calling for more certainty on the terms and conditions of the UK’s withdrawal from the EU.
But the ongoing discussions about the withdrawal agreement, particularly around the Ireland backstop, and the back and forth in Parliament are merely prolonging the uncertainty.
What’s certain at this point is that when the UK leaves the Customs Union and Single Market, the number of UK customs declarations is expected to increase from 50 million a year to 350 million a year. For many companies trading goods across UK borders, this will be the first time they are facing customs declarations. This change of customs processes for a large number of transactions will significantly impact supply chains through additional costs and red tape. And there isn’t really any time left to spare to get started and prepare trade operations for smooth cross-border transactions under new customs procedures.
To help companies in the process, and to facilitate frictionless trade across UK borders after Brexit, the UK government opened a one-off £8 million funding scheme in December. It includes £3 million for HMRC to invest in training provisions for customs management, with a number of new and additional courses to support customs broker training.
The remaining £5 million are available to help businesses based in (or with a subsidiary in) the UK to meet the costs of employee training and IT improvements. Applications officially close on April 5, 2018 – or earlier once all funding has been allocated.
Brexit poses several challenges for companies across various areas of their business. Here’s what they can do to secure their supply chains and make sure their global trade and customs processes are digitised and up-to-speed so they can adapt to upcoming changes:
- Export Controls: Checking dual-use goods
When the UK leaves the EU, it will become a third country, meaning that license requirements will apply to trading dual-use goods. Implementing IT solutions helps to automate all relevant export control checks and efficiently manage all licenses, ensuring export control compliance at all times.
- Customs Filing: Mastering declarations
Once the UK leaves the EU, the volume of customs declarations will increase massively. Whether a company manages its own import and export filing or works with customs brokers, IT solutions automate and integrate customs processes, creating transactional savings and creating a flexible environment in which any changes can be successfully dealt with.
- Origin and Preferences: Recalculating
Trade agreements determine the preferential treatment of goods and applicable duties. Once the UK leaves the EU, new calculations will be required, and new supplier's declarations will need to be managed. IT solutions help master this process efficiently, transparently, and compliantly.
- Product Classification: New customs codes
Changes to customs rules and tariffs after Brexit will have to be reflected in a company’s product master data to ensure compliance and efficiency. Smart IT solutions help to deal with this challenge, as well as other frequent global trade master data updates.
Challenges under Brexit developments are certainly substantial both for experienced traders and for businesses that are only now starting to export or import. But in the digital age, the situation also presents an opportunity to drive forward the digitisation agenda of a company and establish a flexible IT landscape for global trade. This will enable them to quickly and easily adopt new customs procedures and integrate new brokers, saving them time and money and delivering the foundation to master upcoming global trade changes – regardless of how Brexit will turn out.
Iqubal Pannu is a Senior Solutions Consultant at AEB (International) Ltd. He has considerable consultancy and project management experience within carrier management solutions, advising companies ranging from SMEs to major multi-national corporations on solutions for optimising their supply chain performance within global trade and logistics. His international experience includes work in North America,…