Thread by @pmdfoster

🚨🚨🇪🇺🇬🇧🚛🚛🚛🇪🇺🇬🇧🚨🚨What did you do this Christmas? Lot of small and micro businesses spent it preparing for new post-#Brexit import controls that start Jan 1… GVMS, Rules of Origin proofs, non-deferred customs declarations… etc my latest via @FT /1
on.ft.com/3Jqcnk0

@FT This relates to new controls on imports FROM the EU into the UK, which delayed for a year by the UK government after Jan 1 2021 in order to keep trade flowing into the UK.

In short this is the 'other' side of #brexit .../2

@FT It will apply similar controls as the EU has...so from Jan 1 2021, UK importers will need

a) to complete and clear customs declarations in 'real time' when importing; so no 175 day deferral period

b) for animal products register them on IPAFFs, the UK food import register /3

@FT Although in order to keep the flow, actual physical inspections and the need for veterinary certificates etc won't be needed until July 1...helpful @ft timeline here /4

getreadyforbrexit.eu/en/new-update-…

@FT The phase-in approach should keep the show on the road, but there is one potential early pinch-point which is the GVMS system -- essentially a 'barcode' hauliers need to obtain in order to board ferries to UK, showing that customs/IPAFFs etc all done /5

@FT The Government is pretty confident that this won't be a mega problem -- not least because EU lorry drivers (85% of those crossing short straits) have already been doing it the other way from UK to EU using the similar French "SI Brexit" system.../6

SEE: committees.parliament.uk/oralevidence/3…

@FT But still, there is uncertainty about how prepared EU hauliers are...many are v small operators.

The guess is that, as in 2021, disruption will be most pushed back to warehouse..but EU hauliers and UK experts like @ColdChainShane reckon several will be playing catch-up /7

@FT @ColdChainShane In practice this will land hardest on the small businesses (on both sides of the Channel) that have least bandwidth and expertise to absorb the process.

A survey by Federation of Small Businesses @fsb_policy found only 25pc were prepared /8

ft.com/content/11d305…

@FT @ColdChainShane @fsb_policy A survey from the Institute of Directors @The_IoD , the bosses’ organisation whose members generally represent larger businesses, found one-third were “not at all prepared” for the changes. /9

@FT @ColdChainShane @fsb_policy @The_IoD The bigger unknown is the extent to which EU companies that trade with the UK (and have many more options by dint of single market membership) will decide that #Brexit makes it just too much hassle to keep going...and how that impacts UK businesses reliant on EU suppliers. /10

@FT @ColdChainShane @fsb_policy @The_IoD Business always finds a way to readjust, but given the UK's role as an intermediate player, particularly in manufacturing, then over time putting UK players at a permanent marginal disadvantage given costs and reliability issues thrown up by red tape, will have impacts. /11

@FT @ColdChainShane @fsb_policy @The_IoD Another changing on Jan 1st 2022 is 'rules of origin'...which require exporters to demonstrate their products are about 50 pc 'originating' in the EU or UK in order to get zero-tariff access to each others' markets. The rules deciding if a product 'originates' are v v complex/12

@FT @ColdChainShane @fsb_policy @The_IoD Last year businesses had to comply with 'rules of origin' but could self declare their goods were 'originating' and so could enter tariff-free....without having the underlying documents actually to hand, since it is often difficult for suppliers to prove it on complex products/13

@FT @ColdChainShane @fsb_policy @The_IoD From Jan 1, UK and EU exporters will still self-declare their goods qualify, but they will need to have the supporting documents -- failure to be able to demonstrate your goods qualify, when challenged by customs authorities, means you'll have to pay the tariff on goods /14

@FT @ColdChainShane @fsb_policy @The_IoD That burden falls on the importers -- so take a small shoe shop in Bristol that imports shoes from the EU. If their suppliers is shipping them in from Asia and sending them on the UK, that means tariffs are due...the shoes only 'originate' in the EU if sufficiently made there/15

@FT @ColdChainShane @fsb_policy @The_IoD But if the EU suppliers wrongly states the shoes "originate" in the EU...then the Bristol shoe shop is hit with tariff, and then has to work out what the legal situation is with the supplier....all this covered in a letter that HMRC sent out to all businesses/16

@FT @ColdChainShane @fsb_policy @The_IoD All this will be good for the freight-forwarding industry, which for a lot of companies will handle the paperwork.

But speaking to these businesses, you can feel their pain. Many get baffled when, even with supplier declarations, duties get charged...and they can't see why /17

@FT @ColdChainShane @fsb_policy @The_IoD Again...how much this impacts business will depend to some degree on enforcement. Experts like @SamuelMarcLowe reckon EU authorities likelier to be tougher than UK...which will have political incentive to prioritise flows /18

ft.com/content/6ee7c2…

@FT @ColdChainShane @fsb_policy @The_IoD @SamuelMarcLowe So when the Office of Budget Responsibility @OBR_UK forecasts a 15% drop off in UK imports/exports these are some of the bureaucratic barnacles that undergird that forecast.

EU membership will often give an EU business 26 easier options.../19

obr.uk/box/the-initia…

@FT @ColdChainShane @fsb_policy @The_IoD @SamuelMarcLowe @OBR_UK All that said, don't expect anyone to really notice in the wider world...some businesses will feel pinch, but for consumers this will mean marginally higher prices, less choice, longer delivery times...but as we've seen with #covid19 their tolerance for this is quite high. ENDS