Brexit – what are the implications for Swedish trade?
The UK government and the European Commission agreed in principle to a Trade and Cooperation Agreement on 24 December 2020. The Agreement came into effect on 1 January 2021.
What does the new Trade and Cooperation Agreement mean?
For customs purposes, the Agreement means that the UK will be treated as a non-EU country. In other words, the Union Customs Code will apply to trade with the United Kingdom and customs formalities will therefore need to be completed, such as the submission of customs declarations for imports and exports. The Withdrawal Agreement is also applicable in this respect. This lays down, among other things, special provisions governing, for example, transport operations that started before but finish after the end of the transitional period on 31 December 2020.
According to the Trade and Cooperation Agreement, no customs duties are levied if the goods fulfil the conditions for being considered as originating goods under the Agreement and this can be confirmed. The proof of origin to be used is a statement on origin written on an invoice or on another document describing the goods in sufficient detail to enable them to be identified.
You need a REX number
Companies exporting originating goods from the EU need to apply to become a registered exporter (REX) and obtain a REX number in order to make out statements on origin for consignments to the UK if the value of the goods is above the threshold of EUR 6,000.
If you have already registered your company in order to export originating goods to Japan, for example, you do not need to register again.
Ensure the origin of the goods
Before you make out a statement on origin for your goods, you need to ensure that they meet the criteria for being originating goods under the Agreement. The chapter concerning rules of origin can be found on pages 40–55 of the Agreement and the product-specific rules are on page 440–495. You can see how the statement on origin should be worded on page 507–508.
If you are unable to make out a statement on origin at the time of export, you can do this afterwards. Under the Agreement, preferential treatment can be requested up to three years after the date of importation.
Mutual recognition agreement (MRA)
The EU and the UK have signed a mutual recognition agreement under which each party recognises the status of any entity that has an authorised economic operator (AEO) authorisation. There will be more information about this at a later date.
Read more about the Agreement
Is trade with non-EU countries new to you?
Brexit with a withdrawal agreement
The third part of the withdrawal agreement contains specific provisions for, among other things, customs procedures which begin before the end of the transition period but end afterwards.
The EU guidance document on authorisations, customs procedures and rules of origin was updated on 14 July 2020. The guidance document describes, among other things, how practical matters are to be handled at the end of the transition period. One example is transports of goods between the EU and the UK which commence no later than 31 December 2020 and do not reach their destination until after 00.00 1 January 2021. Union goods transported between the UK and the EU are to be treated as union goods if there is a transport document proving that the transport commenced no later than 31 December 2020. This means, therefore, that union goods crossing the border between the UK and the EU after the end of the transition period will not be subject to customs handling if the transport document can prove that the transport started no later than 31 December 2020.
Keep in mind that it is the EU time zone that applies, that is, 23.00 in the UK and 00:00 in Sweden.
The European Commission has also published the document "Getting ready for changes", which deals with future changes in trade in goods between the EU and the UK. On the same page, you will also find the readiness notices that the European Commission updates over time.
The European Commission has also published a guidance document for the Northern Ireland Protocol where you can read more about how the country codes GB and XI should be used. In short, in cases where you need to distinguish Northern Ireland from the rest of the UK, you do so with the new Northern Ireland country code, XI. This could be, for example, for transit to Northern Ireland or on to Ireland. Otherwise, you use GB. As far as rules of origin are concerned, no distinction is made between Northern Ireland and the rest of the UK. The country code GB is used here. It is important to bear in mind that export and import declarations do not need to be made for trade between the EU and Northern Ireland.
Customs handling between the EU and the UK – is your company ready for the end of the transition period?
- What sort of regulations apply for your company’s goods? Do you need authorisation for import to or export from the EU? Contact the right authority.
- Does your company buy inputs from the UK to be included in the production of goods that are then sold duty-free or with reduced duty to a country with which the EU has a free trade agreement? Check that the article meets the requirements for EU origin even after the end of the transition period.
- How are the goods transported to or from the UK? How well prepared is the transport company you use?
- The UK customs tariff applies to goods that are imported into the UK as of 1 January 2021, if the origin of the goods cannot be verified or if the goods do not fulfil the conditions for being considered as originating goods under the Agreement.
Last updated: 2021-02-03
What is updated: Information about MRA added.