The UK is Germany’s fourth-largest trading partner, which means that the impending Brexit is set to bring major challenges for many companies in the short-term. After doing the math, the Association of German Chambers of Industry and Commerce (DIHK) has concluded that, among other things, Brexit will necessitate at least 10 million more customs declarations annually than at present. Below are a few handy facts and tips from Mercoline about what companies affected by Brexit can expect from the Mercoline M.SecureTrade Suite export trade solution.
A number of other associations and organizations are offering helpful guides on preparing for Brexit, including (German only):
Customs declarations will have to be made via ATLAS for the movement of goods to Great Britain. In M.SecureTrade ATLAS, the country code lists will need to be updated and, if necessary, other customising adaptations will have to be made. The ATLAS codings will also have to be changed for the UK as a destination country. Companies will then process their exports to the UK as they do for countries like the USA, for instance. The UK status as a third country will produce a significant increase in the number of customs declarations. Fortunately, most of the work this will necessitate can be handled by M.SecureTrade ATLAS, as customs declarations are electronically integrated into SAP and processes are set to run automatically whenever possible.
Effects on sanction lists check
At present, all transactions must be checked against applicable sanctions lists. This won’t change. Companies that have previously only checked against EU lists should determine whether it will also be necessary to conduct a check against the United Kingdom HMT list (Her Majesty’s Treasury). This can be implemented immediately with M.SecureTrade Sanction Lists Check using the lists from the German Federal Gazette publishing house. The HMT list for the UK can be found in the “DIV package”. Customers that have previously not conducted checks against this list can easily integrate the list via the import function and save it in their check profiles. The check will then also automatically be run against the UK list. Upcoming updates of the UK list will also automatically be included in the checks.
Effects on export controls
Currently, deliveries to Great Britain are not subject to permits or similar provisions. Following Brexit, the EU export control regime will need to be applied to all UK deliveries and will also affect things like the EU Dual-Use Directive.
Going forward, the following export control provisions must be complied with:
- Companies will require a valid export control permit for all Dual-Use deliveries from the EU to Great Britain.
- Following Brexit, EU general authorizations for exports from Great Britain will no longer be applicable.
- Permit obligations from Part 1, Section B of the Export List could apply for some German Dual-Use numbers.
All EU companies will need to include their deliveries to the UK in their export control processes from this point on. Under the revised export provisions, reassessments will need to be conducted for all relevant materials.
Companies already using the Mercoline M.SecureTrade Export Controls solution will find the transition seamless. In the event of a hard Brexit, the “TARIFE Export” list used by the German Federal Gazette publishing house will classify the UK as a non-EU country, and the list will be supplemented. As a result, the UK will be handled like Switzerland (CH), for example. All processes directed toward the UK will then be checked by the Mercoline solution. A control document (ECD) will be created for any “hits” found during the check, as is already the practice today with other destination countries. These can then be evaluated by those individuals and/or authorities responsible for export matters.
The export processes for many critical goods are likely to suffer delays, so in the event of a hard Brexit, export permits should be obtained immediately and Whitelist entries updated. Those deliveries that might be critical should be checked early on in preparation.
Effects on supplier declarations and preferences
EU companies that use goods originating in the UK for production will lose the preferential goods origin for their products. UK companies will be unable to issue any further standard supplier declarations or long-term supplier declarations.
It’s important to note that long-term supplier declarations already issued by UK suppliers will be equally affected. In order to be on the safe side legally, companies that have been using materials from the UK should conduct a new preference calculation for these articles and bills of materials.
If the EU and UK achieve a new preference agreement following Brexit, new supplier declarations can be obtained with Mercoline’s M.SecureTrade Preference Management.
Since the UK will no longer be an EU country after Brexit, UK deliveries will no longer fall under EU document verification obligations such as VAT checks and certifications for inner-EU deliveries (Entry Certificates). The two Mercoline solutions for VAT ID checks and Entry Certificates will simply be adapted accordingly. In addition, in the SAP standard, the UK must also be removed from the Intrastat declaration. This can be done via customising in SAP