Graphic of the UK / France crossing with lorries waiting
Insight

Brexit - Is your business prepared for 1 January 2021?

Julian Hought Director UK Process Industries Sector
Julian Hought

Julian  is a chartered engineer with over 28 years’ experience in the chemical industry. He has an established track record covering research and management of engineering and regulatory compliance functions on high hazard manufacturing sites. Much of his experience spans safety in design, construction, commissioning, operation, maintenance, modification and decommissioning of process plant within the chemicals, pharmaceuticals, oil & gas, energy and general manufacturing industries.

We recently explored the impacts of Brexit on the UK chemical industry regarding REACH regulations. However, there are further widespread preparations that UK businesses also need to have at the forefront of their minds concerning Brexit and the impending changes to border restrictions.

The chemical industry currently relies on an integrated Single Market throughout Europe. As chemicals are at the beginning of the value chain, and end up in thousands of final products, any disruption that occurs in the supply chain will have a large impact on downstream industries, which can have knock on effects to other industrial sectors [1].

As part of the manufacturing process of chemical products, they may cross the UK and EU borders several times before becoming a final article, meaning the imposition of tariffs would quickly lead to a rise in costs for the industry [2]. Currently the supply chain for goods to and from Europe is barrier free, however, once the transition period ends, there will be a requirement for customs formalities. This will inevitably add delays to the transit times for the movement of goods and subsequently increase costs, from additional documentation requirements to potential duties.

Since Brexit discussions first began some years’ ago, there have been warnings that there would be queues of lorries at UK borders if adequate customs arrangements were not in place. It has recently been reported that the UK Government’s reasonable “worst-case scenario” is that there may be maximum queues of 7,000 port bound trucks in Kent and associated maximum delays of up to two days [3].

Traders in the EU and UK will have to submit customs declarations and be liable to goods checks, among other new requirements. The UK Government has recently announced that hauliers will need a Kent Access Permit to proceed to the border and use the short strait channel crossings [4]. It is recommended that businesses are aware of the new processes well in advance of 1 January 2021 to ensure their procedures and systems are accurate.

Make UK, the manufacturers’ organisation, has estimated that 270m new customs declarations will need to be filled in each year after Brexit, at an estimated cost of £15bn according to projections from HM Revenue & Customs [3].

The impact of the additional time and costs associated with these changes, particularly small and medium sized businesses, will be harmful to many. It is imperative that businesses are ready for the new processes and systems that will be in place, including staff being trained and competent on complying with new regulations, to ensure as little disruption as possible.

Contact us today to discuss how we can assist your business.

 

References:

[1] https://cefic.org/policy-matters/industrial-policy/brexit/

[2] https://www.cia.org.uk/Portals/0/200527%20Cefic-CIA%20views%20on%20the%20future-relationship%20negotiations%20between%20the%20EU%20and%20the%20UK%20-%2027%20May%202020.pdf?ver=2020-06-02-092753-983

[3] https://www.ft.com/content/aa42ac31-0aca-4c58-b6a8-b98618fba2d4

[4] https://www.gov.uk/government/news/government-publishes-updated-gb-eu-border-operating-model?_cldee=amJhbmtzQHNscmNvbnN1bHRpbmcuY29t&recipientid=contact-e60fa97ce3e2ea1180fc0050568729dd-7a583be044e2437588f8ffb292b4b229&esid=adb721e8-f00e-eb11-80fe-0050568729dd