How bi-lateral trade between the UK and Portugal will change from 2021
On 31 December the UK will be leaving the EU Single Customs Union and although reaching a trade agreement with the EU remains a top priority for the UK Government, there will be sweeping changes nevertheless.
Regardless of the outcome of the negotiations on securing a trading agreement there will be a series of guaranteed changes and Portuguese business needs to prepare.
From January next year Portugal will have a new trading arrangement with the UK for the first time in 34 years (45 years in the case of core EU countries).
In fact the Portuguese and British Embassy in Lisbon and allied chambers of commerce (BPCC in Portugal and the Portuguese Chamber of Commerce in the UK are preparing more than 3,000 exporters for the end of the transition period.
For example, the Portuguese Agency for Overseas Trade and Investment (AICEP) and the Portuguese tax authorities Autoridade Tributária e Aduanaria and IAPMEI (Portuguese Agency for Competitiveness and Innovation) sent letters to 3,000 exporting companies advising them to prepare for the end of the Brexit transition period.
So, what are the implications for business? The effects of the Covid-19 pandemic made the preparations for business preparation and transition even more difficult, with an unprecedented economic shock, unemployment on the rise and many businesses facing extreme difficulties at best and failure at worst.
In September the UK launched the Keep Business Moving campaign which is especially directed at EU business, and at the same time, this complements the UK’s own campaign aimed at helping UK business.
The British Embassy in Lisbon’s trade and industry department is working hard with the British-Portuguese Chamber of Commerce (BPCC), local companies, sectors, to ensure that both Portuguese companies operating with and in the UK and UK companies operating in Portugal can continue to trade as smoothly as possible under the new arrangements.
Brexit will affect your company if it sell goods and supplies to the UK, buys goods and services from the UK, moves goods through the UK, uses UK materials and goods to trade under preferential schemes with EU partner countries.
It means you will have to file customs declarations when importing or exporting any goods to and from the UK or when moving goods through the UK.
In addition to the customs declaration, security and safety data may be required, a special licence to import or export certain goods (e.g., waste and hazardous chemicals) and comply with different VAT rules and procedures for transactions with the UK the for transaction with the EU.
Preparatory actions required now
The UK Embassy’s Trade Officer Barbara Cagigal explained that the paperwork needed to trade consists of two simple documents — an invoice and a contract of carriage and nine additional documents. The customs procedures to take into account depend on the role in the supply chain.
How much time spent on these formalities will depend on the type of products and on the contracts in place with the trading partners, so start right away with talking to trading partners so you know what to do.
Border formalities between UK-EU trading
You need to make sure you talk to your trading partners in the UK to agree responsibilities and ensure that the necessary border requirements have been met. Furthermore, import procedures will have to be checked with Portugal’s custom’s authority.
As to paying VAT or claiming VAT refunds, make sure the new rules for paying import VAT on parcels you send to UK buyers are met.
A Portuguese business may need to make some changes to allow continued personal data share with businesses or other organisations in the UK. Talk to the local data protection regulator on data protection and data transfer. As for providing services in the UK, check the regulations, including visa requirements.
The UK Border Operating Model
First published in July, it provides details on how UK-EU border will work and the actions traders, hauliers, and passengers need to take. The second iteration of the BOM published on the 8 October includes key policy areas.
From 1 January 2021 to July 2021, the UK will adopt a flexible approach, in three main stages, to afford industry maximum time to make necessary arrangements. There is also a step-by-step import/export guide available on gov.uk.
To help hauliers and Heavy Goods Vehicles (HGV) drivers understand if they are carrying the right documentation, the UK Government is developing a new web service, known as ‘Check an HGV is Ready to Cross the Border.’
The service will also generate a Kent Access Permit which will be mandatory for HGVs to proceed to the border, for those who confirm either that they have — or will obtain en route — the necessary customs documentation.
EU, EEA and Swiss national ID cards will not be acceptable for travel to the UK from October 2021.
Border Controls in 3 stages
1 Jan 2021
Declaration and control for excise and controlled goods (full declaration of CFSP)
For standard goods, keeping records (EIDR – (Entry in Declarants Records) or CFSP (Customs Freight Simplified Procedures) with a 6 month postponement on the full declaration, based on a self-assessment
6-month deferred payment
No safety and security declaration
Physical check at destinations for high risk veterinary and phytosanitary goods.
1 April 2021
Preregistration for all:
Products of animal origin (POAO)
High risk food not of animal origin
Regulated plants and plant products
1 July 2021
Safety and security declarations
Full customs declarations, or use of simplified procedures if authorised to do so and the payment of relevant tariffs at import
Control of veterinary and sanitary and phytosanitary (SPS) goods at GB Border Control Posts (BCPs)
Basics: Establish and agree trading Terms and Conditions
Talk to your trading partners: ensure responsibility for customs checks, duties and dispute resolution is clear.
Understand your logistics and supply chain including points of entry and exit.
Decide how to complete customs formalities (e.g., choose a Customs Intermediary).
The International Chambers of Commerce publish standard trading terms of and conditions
Basics: Getting an EORI number
Economic Operators Registration and Identification Number
UK Importers and exporters must have an EORI number issued by the UK.
EU importers and exporters must have an EORI number issued by an EU Member State
EORI numbers issued in the UK will not be valid in EU at the end of the transmission period.
A UK haulier will also need an EU EORI if they are, for example, the responsible entity for entering ENS data into a MS ICS system (accompanied freight).
Preparing for Brexit: Useful links: