Brexit | Trading with the UK in the post-Brexit era Pitfalls and opportunities - 28 January 2021 - Deloitte
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Brexit | Trading with the UK in the post-Brexit era Pitfalls and opportunities 28 January 2021
Agenda
1 Introduction & practicalities
2 Setting the scene: what is in (and not in) the EU-UK Agreement
3 Trade & Customs: setting the scene
4 Belgian companies: the story so far
5 Belgian Customs: the story so far
6 Port of Zeebrugge: the story so far
7 UK business reaction & economic impact
8 Questions & answers
9 Wrap-up
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 2
Today’s speakers
Richard Doherty Daan De Vlieger Lieven Hendrickx Kristian Vanderwaeren Patrick Van Ian Stewart
Brexit advisor Director, Global Trade Head of Customs Administrator General Cauwenberghe Partner, Chief Economist
Deloitte Belgium Services Europa Worldwide Belgian Customs Trade Facilitation Deloitte UK
Deloitte Belgium Group Authorities Director
Port of Zeebrugge
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 3
Practicalities
• The webinar is being recorded and will
be available afterwards on Deloitte's Brexit Readiness Centre
• The slide deck can be downloaded in pdf in the module
"Documentation & Links“ on your webinar console
• Don’t hesitate to drop questions or comments in the chatbox
(anonymously)
• Questions will be addressed towards the end of the webinar
or after the event
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 4
Setting the scene: what is in (and not in) the EU-UK Agreement Richard Doherty | Deloitte Belgium Brexit Advisor
The world has changed … © 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 6
Looking forward Financial Times, 22 January 2021 © 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 7
Deal avoids tariffs … but UK has made a definitive move out of EU
EU Member State EU-UK Trade deal WTO
27 Member States UK Australia
Frictionless movement of goods, services & capital Yes No No
Big Brexit changes Absence of tariffs and quotas on goods trade Yes Yes No
Free movement of people Yes No No
Free to negotiate trade deals No Yes Yes
Influence Yes No No
EU laws and regulation
Compliance Yes Some No
Fiscal contributions Yes No No
Common Agricultural Policy (CAP) Yes No No
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 8
What the UK-EU Trade and Cooperation Agreement tells us
Goods
Trade in goods Technical barriers to trade Rules of origin Customs and trade International road
and SPS measures facilitation transport
Services
Mutual recognition of Financial services Data and digital Cross-border trade in Intellectual property
professional qualifications services
People Government
Temporary entry and stay Social security coordination Tax Participation in Union
for business purposes & healthcare arrangements programmes
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 9
Key elements of the “deal”
Agreeing the deal brought some certainty However
for business
• Removes the threat of tariffs and quotas for EU/UK • Changes to the EU Single Market and Customs
originating goods Union context should not be underestimated
• Clarifies new rules for mobile workers (length of • Service sectors face uncertainty (regulated services
time people can stay in UK/EU, social security face barriers, non-regulated services can generally
agreement, recognition (or not) of professional continue, but rules are complex)
qualifications, pathway to additional (national?)
procedures) • The deal forms the basis of the future relationship,
but one that will continue to evolve and …
• Reduced quotas for the “other side’s” fishing
industry – agreed until mid-2026 • The first weeks of 2021 show that real change has
occurred and that “the devil is in the detail”
(In separate negotiation, Northern Ireland Protocol
implementation agreed – no hard border risk)
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 10Regulatory issues
Operational changes Outstanding equivalence areas
• No mutual recognition of conformity assessments • Financial services – expectations are that EU will
not grant easy access to UK financial services
• SPS assessments are being strictly applied by EU – operators
and by UK from April
• Data flows – pre-Brexit position extended to
• No mutual recognition of professional qualifications summer 2021, by which time Adequacy should
after 31 December 2020 have been decided
• Cabotage rules are much stricter (only 2 additional
loads allowed before going back to EU or UK)
• Intellectual Property rights protected up to end-
2020: separate regimes from now on
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 11How’s it going so far? De Standaard, 11 januari 2021 The Observer, 17 January 2021 © 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 12
Direct impact on Belgian companies De Tijd, 11 januari 2021 BBC News, 9 January 2021 © 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 13
Opportunities and risks for Belgian business Made in West-Vlaanderen, 1 januari 2021 FLOWS, 13 januari 2021 © 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 14
Trade & Customs: setting the scene Daan De Vlieger, Director Deloitte Belgium
Trading with the UK in 2021 and beyond
What does it take?
Full border formalities (EX and IM) and controls in place as of 1/1/21. With gradual implementation of UK IM formalities by 1/7/21
Three key data elements required to allow you/your broker to fulfil customs formalities and to determine the amount of duty payable
• Determining the correct commodity code for the product Data carrier
• UK Global Tariff vs EU Tariff = (pro forma) invoice
1 or electronic data
Classification message
• Determining the correct value can be complex where, for example, there are multiple or no sales
2 (e.g. ‘principal’ company business model)
Valuation • Customs specific valuation methodology applies
3 • Preferential status determines whether the product can benefit from the TCA tariff elimination in UK
Origin • General and product specific rules of origin
• Proof of origin (formalities)
• Impact on sourcing strategy
Also from a VAT perspective considerable changes take place.
Removal of EU simplifications, no more de-minimis threshold, import VAT, etc.
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 16Duty free trade under the TCA. Not a given …
Example supply chains
EU sufficient manufacturing model
Key customs considerations
(formalities apply)
Double duty free flow remains
TCA rules of origin
(if manufacturing is sufficient)
• Insufficient processing
EU reseller model
• Sufficient processing
(formalities apply) (formalities apply)
Double duty free flow remains • Direct transport versus
non-manipulation
EU RDC model • Cumulation
(avoidable) • Formal requirements
From single to double duty flow
Customs warehousing / Inward
EU RDC model processing relief
(avoidable)
From no to single duty flow Returned goods relief
Returned goods model / UK RDC model
(avoidable)
From no to single duty flow
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 17Duty free trade under the TCA. Yet maybe more duty free than before …
Just one example
EU manufacturing model before Brexit
(single market)
Duty flow
(processing)
EU manufacturing model now
(IPR) (TCA preference)
The benefits of drawback
(sufficient processing)
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 18Belgian companies: the story so far Lieven Hendrickx, Head of Customs, Europa Worldwide Group
Belgian Customs: the story so far Kristian Vanderwaeren, Administrator General, Belgian Customs
Port of Zeebrugge: the story so far Patrick Van Cauwenberghe, Trade Facilitation Director, Port of Zeebrugge
UK business reaction and economic impact Ian Stewart, Chief Economist, Deloitte UK
Brexit: trade disruption likely to weigh on UK growth this year
The Bank of England forecast that GDP will be 1 % lower than it
otherwise would be in Q1 2021 as a result of businesses adjusting to
new trading arrangements
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 23While the former Tory prime minister Theresa May saw Brexit as a problem to be managed … Johnson insisted throughout that sovereignty was paramount, even if the economy took a hit … Johnson won the December 2019 election with a pledge to pursue a hard ‒ or pure ‒ form of Brexit. “Ideally, we believed we could have autonomy and access to the EU market ‒ but if there was a conflict, it was clear which was our priority,” says one member of the UK negotiating team. ‒ Financial Times, 23rd January 2021 © 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 24
New frictions will impact GDP in the long term, some will be offset
Micro frictions/ changes Macro impacts GDP growth
• Rules of origin • Export competitiveness • Negative impact
• Customs checks • Import costs − The average estimate of the long-term
impact on GDP is -4.0 %, or 0.3pp off
• Customs paperwork • Investment annual average growth
• Sanitary and phyto-sanitary measures • Labour supply • Offsetting factors
• VAT • Productivity − Government spending
• Loss of financial equivalence − Business familiarity and adaptation
• Loss of mutual recognition of qualifications − Deregulation
• Tougher migration restrictions − Trade deals with other countries
− Fly in, fly out services − Further UK-EU negotiations
− Work permits − Less uncertainty
Sustained friction can be eased
Teething Lasting friction
problems
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 25UK has slipped down competitiveness rankings since 2016
Global competitiveness rankings
Consensus estimates for long-term, trend GDP growth
Institute for
Management World Bank World Economic
Development (IMD) (Doing Business) Forum
#1 Singapore New Zealand Singapore
#2 Denmark Singapore United States
#3 Switzerland Hong Kong Hong Kong
#4 Netherlands Denmark Netherlands
#5 Hong Kong South Korea Switzerland
2016 10 6 7
UK
Latest 19 8 9
Sweden 6 10 8
France 32 32 15
Italy 44 58 30
China 20 31 28
Greece 49 79 59
India 43 63 68
Latest rankings for all countries except the UK
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 26IMF sees the world economy bouncing back in 2021
Cumulative Vaccination doses
COVID-19 deaths administered per Share of
per million 100 population 2020 2021 2022 world GDP
World 274 0.9 -3.5 5.5 3.1 100%
Advanced economies -4.9 4.3 3.1 61%
US 1,272 6.9 -3.4 5.1 2.5 24%
Germany 634 2.1 -5.4 3.5 3.1 5%
France 1,128 1.7 -9.0 5.5 4.1 3%
Japan 41 0 -5.1 3.1 2.4 6%
UK 1,454 10.4 -10.0 4.5 5.0 3%
Netherlands* 799 0.8 -4.3 2.8 2.9 0.8%
Belgium* 1,796 1.5 -7.4 4.2 3.5 0.6%
Ireland* 603 2.9 -0.3 3.5 3.7 0.5%
Emerging and
developing economies -2.4 6.3 5.0 39%
China 3 1.0 2.3 8.1 5.6 15%
Source: IMF World Economic Outlook Update, January 2021; World Bank Internal Comparison Program; Our World in Data. World GDP shares
are for 2017 at market exchange rates. Data accurate at 26 January 2021
* Forecasts from Consensus Economics
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 27The long climb back …? © 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 28
Questions & answers All
And remember – there are two sides to every story ITV News, 14 January 2021 BBC News, 17 January 2021 © 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 30
Wrap-up
Brexit Readiness Centre
Your gateway to latest developments, analysis and insights
Featuring
• Latest developments
• Upcoming webinars and seminars
• Brexit Readiness Updates
• Business impact
• Industry insights
• How Deloitte can help
www.deloitte.com/be/brexit-readiness-centre
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 32Brexit Readiness Centre How Deloitte can help | Brexit Readiness Workshop © 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 33
Brexit Help Centre
Who to contact for help?
Brexit Task Force
• Corporate & withholding tax
• Customs and trade
• Legal
• Location strategy
• People
• Public funding
• Risk management
• SMEs
• Supply chain
• Technology
• VAT
Reach out to us by scanning the
QR code or by e-mailing us at
BeBrexit@deloitte.com
© 2021. For information, contact Deloitte Belgium. Post-Brexit | Pitfalls and opportunities 34About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms. Deloitte provides audit, tax and legal, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of 330,000 professionals, all committed to becoming the standard of excellence. This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication. Deloitte Legal - Lawyers CVBA in Belgium Deloitte Legal - Lawyers CVBA is part of a privileged multidisciplinary cost-sharing association with Deloitte Belastingconsulenten CVBA. © 2021 Deloitte BE. All rights reserved. Designed by the Creative Studio at Deloitte, Belgium
Europa Road and Frictionless Trade Services BV
Observations – 4 weeks in
• No amount of preparation was enough?
• Client preparedness for the complexities of trading outside of Common market:-
• No stock-building in manufacturing – line stops everywhere!
• Paperwork requirements
• Correct classification of products in their portfolio
• Legislative requirements regarding the export and import of their products
• Documentary requirements:-
• Invoices
• Preference Statements
• Specific Regimes
• Their clients’ EORI and VAT numbers
• Special licenses, permits, derogationsObservations – 4 weeks in
• Expectations remain per ‘2020’
• Transit times
• Process
• Fluidity
• It’s all just the same isn’t it…?
• Real need to re-align those expectations, recognising:-
• The process has totally changed
• Accurate and complete paperwork is the key to success
• Transit times are longer because the process takes longer, with more hurdles to jump over.
• ‘Rubbish in, rubbish out’ – getting it wrong at the beginning has dire consequences in the supply chain.DELOITTE BREXIT WEBINAR
PREPARATIONS
28TH OF JANUARY 2021
BELGIAN CUSTOMSAgenda 1. Facts and Figures 2. Encountered problems 3. Origin 4. Grace period 5. Support by Belgian customs
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
1/jan
5000
2/jan
3/jan
4/jan
5/jan
6/jan
7/jan
8/jan
9/jan
10/jan
FIGURES
11/jan
# EX UK
12/jan
13/jan
14/jan
15/jan
# IM UK
16/jan
17/jan
Number IM and EX for UK
18/jan
19/jan
20/jan
21/jan
22/jan
23/jan
24/jan
25/jan
26/jan0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1/jan
2/jan
3/jan
4/jan
5/jan
6/jan
7/jan
8/jan
9/jan
10/jan
11/jan
% UK in EX
12/jan
13/jan
IT AIN’T OVER YET
14/jan
15/jan
16/jan
% UK in IM
17/jan
18/jan
19/jan
Share UK in total number IM and EX
20/jan
21/jan
22/jan
23/jan
24/jan
25/jan
26/janLOW TRADE VOLUMES
Lower number of consignments than usual
• New year’s period
• COVID-19
• Stockpiling before 31/12 to avoid transport
first days of Brexit
• Reticence of trade
WINNING TIME TO SOLVE POOR DATA OF QUALITY
PROVIDED BY CUSTOMERS AND COMPANIESIT / POOR DATA QUALITY
Export tends to be less
problematic than import:
week 1: EX: 10% IM: 80%
CUSTOMS TRADE
1. Missing or wrong CUSCAR (Temporary Storage)
No problems ACTIVE SUPPORT BY CUSTOMS
2. Poor data quality provided by customers and companies creates
problems downstream in the whole chain
Lodging final customs declarations takes a lot of time
Terminals are inundating
- INTENSIVE COOPERATION BETWEEN CUSTOMS AND TERMINALS
- OUTREACH TOWARDS TRADE
3. Data quality of British health certificates is unsufficient
OUTREACH TOWARDS TRADE IN UK ON 27TH OF JANUARY 2021
6ORIGIN Technical webinar(s) organised by COM for customs and Trade (TCG) Many companies have no knowledge about origin rules Expecting a substantial increase of REX registrations (over 50 applications daily) Special action by customs
GRACE PERIOD NO PENALTY FOR BREXIT-INFRACTION, IF: 1 FOR PERIOD OF TWO MONTHS AFTER BREXIT 2 COMPANIES ACTING IN GOOD FAITH 3 CASE BY CASE APPROACH 4 DUTIES AND TAXES HAVE TO BE PAID
SUPPORT BY BELGIAN CUSTOMS
Customs Brexit
callcenter still active
+32 257 55 555WHERE CAN I FIND INFORMATION?
Call Center National forum Brexit webpage
1. EORI ACTION PLANNED ACTION
ORIGIN
EU UK UK BE as of 25/01/21
20.000 300 6 879 new EORI
are contacted by
7.000
Belgian customs
6.879 new EORI 160 new EORI • Subworkgroup • Last updates
> 95% of goods Brexit about Brexit
flows covered ! REX registration
2. AGREED LOCATION • Reports available: • Link:
https://www.nafo https://financien.
3. ET 14000 rna.be/nl/content belgium.be/nl/do
/subwerkgroep- uane_accijnzen/o
brexit ndernemingen/br
exitDeloitte Brexit Client Event Patrick Van Cauwenberghe Trade Facilitation Director 28 January 2021
A GATEWAY FOR THE EUROPEAN MARKET
A PORT WITH A GREAT LOCATION
Range Le Havre - Hamburg
Easy access coastal port
Unique position vs. UK
In the middle of the EU markets
Dense road and rail networkEvolution total traffic (in tons) 47 MILLION TONS/2020
Cargo flows
47 MILLION TONS/2020
38% CONTAINERS
30% RORO
27% LIQUID BULK
4% SOLID BULK
1% BREAKBULKKey figures 2020
8.053 vessels handled +/- 4,000 trucks/day >20,000 jobs in the port
1.8 million TEU handled nr 1 automotive port –
47 million tons handled
2.2 mio new carsRoro traffic
14.2 million tons
1.3 million trucks
2.2 million new carsMaritime connectivity: shortsea
HIGH FREQUENCY
SERVICES
LOLO
Containerships
Diamand Line
P&O Ferries
Portconnect
X-Press Feeders BGX
RORO
CLdN
Cobelfret Ferries
DFDS
EML
Finnlines
Flota Suardiaz
KESS
K line
Neptune Lines
P&O Ferries
SOL
Toyofuji Shipping
UECCZeebrugge = UK expert
40% of cargo = related to the UK market
17 million tonnes
850,000 new cars
70 sailings to the UK and Ireland/week
RORO - SHORTSEA SERVI CES
CONNECTIONS FREQUENCY SHIPPING COMPANY WEBSITE
Great Britian and Ireland
Dublin 1 / week KESS www.kess.kline.de
Dublin 2 / week CLdN www.c ldn.c om
Cork 1 / week CLdN www.c ldn.c om
Killingholme 6 / week CLdN www.c ldn.c om
Purfleet 12 / week CLdN www.c ldn.c om
Tyne every 5 days EML www.euro-marine.eu
Southampton every 4 days EML www.euro-marine.eu
Hull (freight) 3 / week P&O Ferries www.poferries.be
Middlesbrough (Teesport) 6 / week P&O Ferries www.poferries.be
Tilbury 12 / week P&O Ferries www.poferries.be
Tilbury 1 / week Finnlines www.finnlines.c om/freight
Grimsby 4 / week Toyofuji Shipping Co. www.toyofuji.c o.jp/english
Sheerness 1 / week Toyufuji shipping Co. www.toyofuji.c o.jp/english
Southampton 1 / week UECC www.uec c .c om
Sheerness 1 / week UECC www.uec c .c om
Portbury 1 / week UECC www.uec c .c om
Portbury, Rosslare, Southampton every 4 days Neptune Lines www.neptunelines.c omU.K. distribution - The Zeebrugge concept
Day B :
Delivery in the U.K.
06.00 hrs in London
10.00 hrs in Birmingham
12.00 hrs in Manchester
15.00 hrs in Glasgow
12 hours transit:
Unaccompanied transport to UK port
(FTL / FCL / LTL / LCL / groupage)
Day A:
14.00 hrs: ‘order
picking’ in Zeebrugge
WarehouseWe invest in a datasharing platform to make
Zeebrugge Brexit-proof
1. BOOKING Important information
Unique booking reference
Make sure you have a valid
booking with your ferry operator Unit identification
Important information
MRN
2. CUSTOMS NOTIFICATION Type of document
Provide pre-notifications of customs Unique booking reference
data with RX/SeaPort
Unit identification
Terminal
3. GREEN LIGHT Important information
Check RX/SeaPort dashboard if your cargo Unique booking reference
reached the GREEN LIGHT status Unit identification
www.rxseaport.euCUSTOMS NOTIFICATION
Zeebrugge -> UK
The customs details that are linked to a booking must be pre-
notified via the e-Desk ferry application of RX/SeaPort.
Provide pre-notifications of Without the mandatory pre-notification of the customs data,
customs data with RX/SeaPort the haulier will not be allowed to proceed to the terminal.
UK -> Zeebrugge
LOG
IN The terminal operator is informed of the customs status of your cargo
via the e-Desk ferry application of RX/SeaPort. Based on that
information, the cargo can be released for transport.
The cargo cannot be be collected without this mandatory pre-
notification.Shortsea Terminals with destination UK – C.Ro & P&O Ferries
Zeebrugge ready with temporary car parks
• Design Covid proof
• Access control
• Surveillance/Security
• Lighting
• Sanitary blocks (toilets and
hand sanitisers)
• Waste management
• Water
• Wifi
• Information on the ground
•
Location: Westelijke Havendam
Capacity : 80 parking spaces •
Location: Zuidelijke Havenrandweg
Admission: Owns Red Flyer awarded on P&O Capacity: 193 + 160 parking spaces
Admission: Red Flyer awarded on C.Ro
(Red flyer PO if zone 1 full)Joint efforts between stakeholders
Federal & regional Government Services
Depending on the alarm phase, traffic is controlled according to certain
pre-arranged routes and indicated via the verkeerscentrum.be / waze /
truckmeister and on the digital signs above the highways.Port of Zeebrugge remains a center of excellence for all UK
traffic, even after Brexit.
1) Zeebrugge has a robust and reliable business model regarding unaccompanied freight. After
Brexit, unaccompanied freight is an advantage as it does not require additional paperwork for the
driver.
2) Zeebrugge has a wide range of direct connections to Ireland. Before Brexit, 80 per cent of all Irish
cargo to and from the EU was shipped via the UK. That UK land bridge is a disadvantage in Brexit times.
Via Zeebrugge, this obstacle is literally bypassed.
3) The data platform RX/SeaPort is a digital system that makes the connection between transporter,
terminal, shipping company and customs. Digitising the administration after Brexit helps to simplify the
new way of doing business with the UK.
4) Zeebrugge has a Border Control Post within the port area where both customs and the FASFC are
based. This expertise at a short distance from the terminals, offers advantages in time and efficiency.portofzeebrugge.be Thank you
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