brexit & import export planning - Aricia Ltd

13/06/2017

Contents

Straightforward Consultancy, Coaching & Training Import | Export | Logistics | Customs

 Customs Familiarisation  Free Trade Agreements

A Full English Brexit

 Trade Examples  Customs Regimes  AEO Status

Presented by: Gavin Makowski

 Quick Tips This information is for general information & illustration purposes. We make no representations as to its 2 accuracy or completeness & will not be liable for any errors, omissions, or actions taken from its display or use.

Status of UK>EU Negotiations “What we have come up with is the idea of a comprehensive free trade agreement and a comprehensive customs agreement that will deliver the exact same benefits as we have.” - David Davis

Remoaner? Brextremist? Does it matter? Managing Director Trade Co Ltd

“Countries with third-country status cannot and will not have the same or even more rights than an EU member. All 27 member states and the European institutions agree on this. You may think that all this is self-evident. But I have to put this so clearly because I get the impression that some in Great Britain still have illusions about this, and that is a waste of time.” - Angela Merkel © 2017 Makowski Associates Ltd

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?

…trade better internationally

13/06/2017

Status of UK>UK Negotiations

Customs Familiarisation The dark arts within international supply chain management

The Dual Kingdom (DK)

Let’s assume that Scotland, N. Ireland & London will remain! © 2017 Makowski Associates Ltd


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International Trade is Different

Why Customs Clear?

1. Every export & import is linked 2. Varying customs formalities: -

© 2017 Makowski Associates Ltd

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Customs declarations Supporting documents Procedures & competency Compliance expectations

Duty & VAT

Prohibitions Restrictions Licences

Trade Statistics

1. Tax over/underpayments, & reclaims!

3. Varying customs taxes:

2. Civil penalties & criminal offences

- Import customs duty - Import VAT

3. Border delays or cargo seizure


Security Routines

4. Loss of beneficial customs regimes © 2017 Makowski Associates Ltd

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A Customs Entry

Average Duty % on Import Value *ILLUSTRATIVE ONLY (figs not up to date)

Lots of product variation within the categories © 2017 Makowski Associates Ltd

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What’s New

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A Quick Word on the UCC 1. Union Customs Code (2016) - 20-year rewrite of EU customs regs

UCC


2. Customs Declaration System

1. Changes to key customs concepts & processes 2. Stricter procedural & compliance expectations

- >20-year update of UK customs system

3. New guarantees

3. Brexit

4. Advanced customs regime changes

[A bit on this later]

5. Authorised Economic Operator (AEO) status

[A bit on this later]

BREXIT The perfect storm? © 2017 Makowski Associates Ltd

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A word on EU FTAs 1. Walk from 50 EU FTAs 2. Plus 15 in the pipeline

Free Trade Agreements (FTAs)

3. And ‘single market’ access (27 members)

Bilateral agreements allowing deviation from standard import tax rates

4. We can strike our own FTAs 5. 5 years each? Trickle effect? 6. Reliance on complex Rules of Origin (ROO) © 2017 Makowski Associates Ltd

Europe is Complicated

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State of EU Trade Agreements

*EU Commission data


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State of UK Trade Agreements?

Customs is Complex & Expensive Brexit likely to lead to…  Bewildering paperwork to the uninitiated  Complex tax structures by country & product  New legal & compliance obligations

*UK data


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3rd Country Trade 1. Imports & exports (3rd country status) 2. Customs formalities & potential taxes all directions

Trade Examples

3. Taxes may decrease if there is preference/FTA

International trade may include (a) standard

3rd Country

or (b) preferential tax arrangements 3rd Country

0% © 2017 Makowski Associates Ltd

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UK …trade better internationally

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UK within Single Market

UK Outside the EU

1. Arrivals & dispatches (not true imports & exports)

1. Imports & exports (3rd country status)

2. Customs duty x1 | Import VAT x1 | Customs formalities x1

2. Customs duty x2 | Import VAT x2 | Customs formalities x2

[Reverse position for EU to UK trade]

6%

[Reverse position for EU to UK trade]

6%

UK

3rd Country

EU

UK 6%


UK

EU

6% …trade better internationally

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UK

3rd Country

UK with EU FTA


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We don’t need EU?

1. Imports & exports (3rd country status) 2. Customs duty x1 | Import VAT x2 | Customs formalities x2 3. Duty benefits possibly restricted to UK/EU originating goods [Reverse position for EU to UK trade]

6%

UK

3rd Country

UK

EU

We cannot simply replace doorstep trade with the world’s largest trading block with that from far flung places.

6% © 2017 Makowski Associates Ltd

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The Concept 1. Delay, reduce or eliminate import taxes 2. Ongoing savings & potential retrospection

Advanced Regimes Trade facilitation & customs tax planning

3. Help UK companies compete globally 4. Conditional advantage! 5. Enhanced procedural & compliance expectations 6. Authorisation/long set-up times? 7. Frequently missed by SME’s & large corporations alike © 2017 Makowski Associates Ltd

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Opportunity Assessment Baseline Classification, valuation, origin

Processing Re-import/export & processed products

Trade agreements Regional or industry

Specific use Temporarily or for certain end uses

Competitive environment Profile of EU/UK producers

Situational scenarios Encourage trade & edu/science/culture

Storage Deferrals & re-export reliefs

Transit EU / UK movements

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Authorised Economic Operator (AEO) Status Significant new customs & supply chain security accreditation recognised across the EU & internationally.

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AEO Overview

Internal Requirements

1. Customs, supply chain security & trade facilitation have become government priority 2. Formal recognition as safe, secure, & compliant 3. ~70 operational programmes (16 waiting launch) 4. ~ 35,000 global (incl. 14,500 EU) companies 5. Bedding in & gaining momentum © 2017 Makowski Associates Ltd

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COUNTRY GERMANY NETHERL. FRANCE ITALY SPAIN UK USA CHINA CANADA JAPAN MEXICO THAILAND N.ZEALAND OTHER (55)

NO. 6000 1500 1400 1100 700 500 11000 3540 1535 542 421 291 122 20000


Potential Benefits

1. Customs procedures, competency & compliance record 2. Supply chain security standards But also… 3. Overall business processes & controls 4. Accounting & logistical systems 5. ICT disciplines 6. Financial solvency ~ 3 to 10 months prep + 4 month application process? © 2017 Makowski Associates Ltd

Fitting it Together

1. Fewer physical/document border checks 2. Priority treatment in backlogs 3. Simplified/faster customs clearances 4. Easier admittance to advanced customs regimes 5. Waivers from new financial guarantees 6. Reduced errors, civil penalties, crime, theft & losses 7. Improved supply chain predictability & vulnerability 8. Inherent benefits for higher risk cargo types 9. Industry 'kite mark' & marketing tool 10. International reciprocal/mutual recognition © 2017 Makowski Associates Ltd


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BREXIT

CUSTOMS PROCESSES


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AEO


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Customs Taxes Map cargo flows & origins, in & outbound, for raw materials, components & finished goods. Monitor & consider:

Quick Tips Manage & minimise your risks

1. 2. 3. 4. 5. 6. 7. 8.

Standard UK import taxes Standard import taxes in 3rd countries Preferential rates that may be withdrawn Upcoming UK’s trade negotiations Competitor (dis)advantages Tax planning mitigations Routings, manufacture/storage locations, transaction structures Alternative sourcing/selling possibilities


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Customs Formalities

Risk Management

1. EU trade becomes international trade

1. Create risk register

2. Consider internal, supplier & client ambitions:

2. Risk identification (& assumptions)

- Willingness for international trade?

3. Risk evaluation

- Customs skills gaps?

4. Risk treatment

- Processes & procedures?

5. Project management (update & retire risks & treatment plans)

- Contract terms?



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ACTIVITIES      

IMPORT / EXPORT OPERATIONS INTERNATIONAL LOGISTICS CUSTOMS ROUTINES & DUTY RELIEFS GLOBAL TRADE COMPLIANCE AEO STATUS & BREXIT PLANNING SUPPORTING SYSTEMS & PROCEDURES

THANK YOU

FOCUS     

REDUCING COSTS MINIMISING OPERATING RISKS ACHIEVING COMPLIANCE RESOLVING DAILY ISSUES IMPROVING PROFICIENCY & CAPABILITY

  

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01442 603342 [email protected] www.makowskiassociates.co.uk 159 High Street South, Northchurch, Berkhamsted, HP4 3QT, U.K.