Fine Solutions Highlights Customs Changes Due to Brexit

The start of Brexit on January 1, 2021, is just around the corner. Fine Solutions AG is releasing a checklist and a fact sheet with tips for Swiss companies that import from or export to Great Britain. The focus is on customs-related changes. A lot is changing, and it is advisable to address the topic in a timely manner. The checklists help ensure that nothing is overlooked.

(Zurich) The United Kingdom (UK) left the EU on January 31, 2020. This marked the beginning of the so-called “transition period,” which is expected to last until the end of 2020. Until the end of the year, the UK remains part of the European Customs Union. The bilateral free trade agreement between Switzerland and the EU is therefore still applicable until the end of the year. However, since the EU and the UK have not yet reached a new trade agreement, many details remain unresolved. This is not only the case between these parties but also between the UK and Switzerland.

The blog post will therefore be updated promptly over the coming weeks and months as new insights and recommendations become available.

Table of Contents:

• 1 Brexit Effects on Switzerland
• 2 Consequences of Brexit for Swiss Companies from a Customs Perspective
• 3 Brexit Checklist / Fact Sheet

Brexit Effects on Switzerland

Switzerland (including Liechtenstein) signed a new trade agreement with the UK on February 11, 2019, which will come into effect on January 1, 2021. Fine Solutions summarizes topics that are relevant from a customs law perspective for company representatives of importing or exporting Swiss firms. These include:

• E-dec Export Customs Declaration
• E-dec Export Safety Data in the Export List
• Customs Procedures
• AEO Status
• Export Invoice / EORI Number
• Trade Agreement Switzerland-UK
  • Territorial Scope
  • Scope of Application
  • Rules of Origin and List Rules
  • Accumulation with Materials of UK Origin
  • Accumulation with EU Materials
  • Proof of Preference
  • Transitional Provisions
  • Customs Tariff Tares

Detailed information with concrete recommendations is summarized in a checklist and a fact sheet.

Consequences of Brexit for Swiss Companies from a Customs Perspective

As mentioned earlier, there is a trade agreement between Switzerland and the UK. However, this does not mean that the affected companies do not have to take action. From a customs law perspective, there is quite a bit to consider. Even after the UK’s exit from the EU, a corresponding export and import customs declaration must be created for every export from Switzerland and import into the UK. Many companies are not aware of the customs implications of Brexit and what needs to be considered in the future.

In particular, if you create your export customs declarations using software, certain settings must be made in the software solution. If there is a solution that does this automatically, you should at least check the changes. Additionally, the transmission of safety data for future export shipments to the UK will be necessary, as it is no longer part of the EU.

AEO Status Changes

With the UK’s exit, the recognition of AEO status between the countries also changes. Switzerland has signed an AEO agreement with the EU, which regulates the mutual recognition of AEO status.

When creating the export invoice, several aspects must also be considered. An important point here is the customer’s EORI number in the UK.

A particularly important topic is the preferential treatment in the context of preferential goods origin. This can become very challenging for companies. New rules of origin from the Switzerland-UK trade agreement must be observed. Due to the fact that there is currently no agreement between the EU and the UK, EU materials cannot be accumulated as before. Companies may therefore need to create a new preference calculation for their manufactured goods that takes this circumstance into account.

EU Origin Goods Not Preferentially Benefited

Caution is also required with trade goods: EU origin goods can no longer be preferentially traded between the UK and Switzerland in the future.

Furthermore, the question arises as to which proof of preference is valid in the bilateral trade agreement between Switzerland and the UK and what consequences there are for authorized exporters. In the proof of preference, for example, EU origin goods can no longer be confirmed for exports of trade goods with preferential origin from the UK. On the import side, it should also be checked whether the UK supplier issues the proof of preference correctly.

If you issue supplier declarations that will be valid from January 1, 2021, you must adjust them accordingly.

Transitional Provisions at Year-End

A stumbling block for exports could be shipments from Switzerland that were exported before January 1, 2021, but are only registered for import into the UK from January 1, 2021. Such shipments are subject to the Switzerland-UK trade agreement. However, at the time of export, no proof of origin in the sense of the Switzerland-UK agreement can be issued, as the agreement will not yet be in effect. Fortunately, a transitional provision has been established for this issue.

Also, UK origin goods that were imported into Switzerland before January 1, 2021, and are exported to the EU from this date will lose their preferential status.

The Swiss customs tariff “Tares” will be adjusted on January 1, 2021, for both imports and exports concerning the UK. The import duty rates in the UK will also be adjusted. Therefore, check whether the customs duties for your customer in the UK will change. We will show you where to find the new customs rates.

Request Brexit Checklist / Fact Sheet
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