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Imports and exports post Brexit: the new timetable for border control processes

Posted: 22/03/2021


Since the UK formally left the EU on 31 December 2020, the UK and the EU have been operating under a Trade and Cooperation agreement. According to this agreement, trade in goods between the UK and the EU shall not be subject to any tariffs or quotas on all goods that comply with the appropriate rules of origin. However, as a result of the UK leaving the EU customs area, customs formalities will be required by both parties, and VAT and certain other duties shall apply upon import.

In this article we look at how the different stages of the import and export process are being affected, with a particular focus on Spanish exporters.

Exports from Spain: intracommunity vs extra community operations

Spanish exporters benefit from the fact that intracommunity operations are very straightforward from a VAT point of view. Spanish exporters, previously duly registered in the ROI Register, needed to have an EU VAT Number and to be registered in the VIES (VAT Information Exchange Service), which is an electronic system for the validation of VAT numbers of economic agents registered in the European Union for cross-border operations of goods and services. If both parties (importer and exporter) have an EU VAT Number, exporters will issue a VAT Free invoice to the buyer. This rule changes if one of the parties does not have the EU Vat Number. In addition, the lack of customs formalities dispensed with any documentary obligations on exporters.

In contrast, extra community operations are subject to a number of additional formalities, such as obtaining the EORI Number and issuing a number of documents (depending on the commodity to be exported). From the Spanish perspective, and although export invoices are VAT exempted, the main issue is that the goods will have to be cleared at customs before entering the UK and therefore face customs formalities.

Brexit and changes in customs policy

The principal impact of Brexit for the UK is that it is now considered a third party, thus triggering the need to process imports through customs. EU Regulation 952/2013 of the European Parliament, and of the Council of 9 October 2013, which set out the Union Customs Code, is no longer applicable in the UK.

In order to try to minimize the impact on the UK’s economy, the UK Government decided to implement border controls at three different stages (January, April and June) during the first half of 2021. Hence, from 1 January, standard goods arriving in the UK simply require that an EIDR (transitional Entry in Declarant’s Records as part of the simplified customs declaration process) is made. Importers are allowed a six month period to carry out customs declarations, and checks are only carried out on controlled goods (toxic chemicals and excise goods such as alcohol or tobacco), high-risk live animals, and plants.

The initial plan was to implement an intermediate step on 1 April and proceed to full implementation on 1 July, when full safety and security declarations would have been compulsory. However, pursuant to a written statement made on 11 March, the UK Government has decided to postpone both the planned intermediate step on 1 April, and the full implementation scheduled for 1 July. The next significant date in the calendar is now 1 October 2021, from when additional requirements will be necessary, especially for those trading goods subject to sanitary and phytosanitary controls, such as products of animal origin, fishery products and live bivalve molluscs, high-risk food and feed not of animal origin, and plants and plant products. Export Health Certificate requirements for products of animal origin and certain animal by-products will come into force at the same time.
The UK Government has taken the view that, although most businesses – and the UK’s workforce and infrastructure – would have been ready for the so-called Stage 2 on 1 April, some others needed more time to prepare. 1 January 2022 will bring additional requirements, with a view to setting March 2022 as the date when checks at Border Control Posts will take place on live animals and low risk plants and plant products.

How is Brexit affecting Spanish exporters?

The UK has traditionally been a better market for Spanish companies than the Spain has for UK exporters. The period between 2015 and 2019 showed an average of over 19 billion euros of exports from Spain to the UK, compared to 11.5 billion euros of UK goods imported into Spain.

From 1 January 2021 all flows of goods between Spain and the UK ceased to be considered intracommunity transactions and became subject to customs formalities (except for exports of goods which have Northern Ireland as their destination, which will continue to be declared in the Intrastat system).

Although UK importers are most likely to be affected by the customs regulations (especially after so many years of conducting business in a relatively straightforward manner), Spanish exporters are also facing Brexit related challenges. Customs invoices have to be issued, and goods have to be properly identified with their tariff code, since incorrect declarations may cause undesired delays. Addiitonally, the CE marking is no longer mandatory for products sold to UK customers.

Since EU legislation requires that all goods brought out of the EU customs territory be risk assessed and subject to customs control before departure, an exit summary declaration (EXS) also needs to be lodged.

How is Brexit affecting UK importers with regard to safety and labelling?

Post Brexit, there has been no change to the general substantive safety requirements required for products to be sold in the UK, as contained in the General Product Safety Regulations 2005 (GPSR). Nor at present has there been any change to sector-specific product regulations. The UK Government has expressed a desire to remain closely aligned with EU product safety standards in order to facilitate trade, but the future position remains uncertain. Northern Ireland remains subject to a slightly different regulatory regime and may diverge yet further in future.

Despite product safety requirements remaining the same, there have been two key changes for consideration when importing products to the UK:

  • the UK will now form a separate market to the EU, which will have an impact on who is considered responsible for the safety of products placed on the UK market.
  • the UK is no longer part of the EU CE-marking regime, nor the Safety Gate/RAPEX regime for sharing defective product information and facilitating recalls.

Responsibility for product safety

Schedule 9 to the Product Safety and Metrology etc. (Amendment etc) (EU exit) Regulations 2019 came into force at the end of 2020 and made several amendments to the GPSR. One of the main effects of these amendments is that the ‘producer’ (to whom the primary product safety obligations attach) may change.

Essentially, the manufacturer of a product will retain the ultimate responsibility for the conformity of the product to the relevant product safety regime, provided that the manufacturer or its representative is established in the UK market. If the manufacturer (or representative) is not established in the UK market, then the importer of the product to the UK will be considered the “producer” of the product, and will assume responsibility.

Producers must comply with the GPSR and any other relevant product-specific regime, and take reasonable steps to ensure that the product is safe to use, while seeking to minimise risks associated with the product, providing labelling and warnings where appropriate, and ensuring effective traceability and reporting.

The practical impact on UK importers is that in the absence of the product manufacturer being established in the UK market, the importer will now be considered a producer, and will assume liability for the safety of the product. This exposes many previously unaffected importers to potential defective product claims, and places a greater regulatory burden on importers to ensure product safety compliance.

Labelling and reporting

The UK (with the exception of Northern Ireland) will no longer be part of the EU CE marking regime for indicating conformity with product safety regimes. From 1 January 2021 the UK requires products being placed on the UK market to bear the UKCA (UK Conformity Assessed) mark, as shown below.

At present, the technical requirements and the conformity assessment processes and standards used to demonstrate conformity for UKCA purposes remain largely the same as those supporting the EU regime for CE marking. The UK Government may diverge from this position in future, but currently any product bearing a CE mark should be able to bear a UKCA mark.

In most cases, a transitional period applies so that the UKCA mark will not need to be applied to any products marketed in the UK before 1 January 2022, and products labelled with the CE mark will be considered to have conformed with the updated UK regime. That said, in some cases the UKCA mark is already required to be applied to goods placed on the UK market (since 1 January 2021), for example if the product in question requires a mandatory third-party conformity assessment (as opposed to self-assessment). This requirement does not apply to existing fully manufactured stock. Further, from 1 January 2023 the UKCA marking must be permanently attached to the product, as opposed to being printed on packaging or applied in any other temporary manner.

Additionally, as of 1 January 2021, the UK is no longer part of the EU RAPEX product safety regime for identifying and sharing product information on defective products and co-ordinating product recalls. The UK Government intends to set up a similar regime, but until it does, importers do not need to have regard to RAPEX alerts relating to products for sale on the UK market. It may however be sensible to pay heed in the event that a product is subject to a product recall in the EU, in order to protect importers from potential product liability claims as discussed above.


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