As a result of Brexit agreement, 01 February 2020 was a first day of transitional period of withdrawal of the United Kingdom from the European Union, which will last until the end of 2020. If the free trade agreement between United Kingdom and European Union will not enter into force at the beginning of 2021, the end of transitional period will result with the hard Brexit.
This will have significant legal consequences for British business entities in the area of customs authorizations and simplifications.
Expiry of customs permits
The basic consequence of hard Brexit will be the expiry of customs permits. To be more precise, any customs permits issued so far by the British authorities under the provisions of the European Customs Code will lose their validity within the customs territory of the European Union. The most severe consequence may turn out to be the loss of Authorised Economic Operator status (the “AEO Status”) by British business entities.
Just to remind, a business entity who has been granted the AEO status is treated by the customs authorities as a credible entity, which involves granting certain customs privileges, described under the provisions of EU customs law.
Especially, AEO status granted by one EU Member State is recognized by the customs authorities in all EU Member States. It means that the British entities having the AEO status granted by the British authorities could benefit from the preferences, resulting from such status in all other European Union Member States. However, at the end of the transition period, this privilege will be gone.
British goods out of preferential rules of origin
Under the European Union’s common commercial policy, the European Union entered into the number of preferential trade arrangements with third countries, such as free trade agreements and generalised system of preferences.
As the Britain will become a third country from a customs legislation perspective after the end of the transition period, the EU's preferential trade arrangements with third countries under the common commercial and customs policy will no longer apply to the United Kingdom from January 2021.
Customs declarations
At the end of the transitional period resulting with the hard Brexit, entities trading with the United Kingdom will have to comply with customs formalities relating to the importation of goods from or exportation to a third country. In Poland, this obligation includes, among others, registration in the "e-Customer" service and applying for an EORI number.
Goods entering to the EU customs territory from the United Kingdom or leaving EU customs territory to be delivered to Britain will be subject to customs supervision and the obligation to make a customs declaration for the relevant customs procedure in accordance with the EU Customs Code (Regulation (EU) No 952/213 of 9.10.2013).
This means, among other things, the obligation to submit a customs declaration in electronic or paper form if there is no possibility to submit a declaration orally or in the form of an action deemed to be a declaration for a given category of goods. It may also be necessary to provide security for the customs debt.
Transit and customs duties rates
United Kingdom is a separate Contracting Party of of the CTC Convention, the TIR Convention and the SAD Convention. As a result, from the January 2021, the transit procedures subject to trading relations with the UK entities will be governed by the provisions of those acts.
In turn, customs duties will be calculated in accordance with Council Regulation (EEC) No. 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff.
