Archive for category: News

The Government’s Brexit deal – comprising the Withdrawal Agreement (WA) and the Political Declaration (PD) – was overwhelmingly defeated in the House of Commons on 15 January 2019 by 432 votes to 202.

As a result, the Prime Minister set out to seek further negotiations with the EU on the ‘Northern Ireland/Ireland backstop’.  She has stated that a change to the backstop would win a majority in the House of Commons for the deal.

EU leaders have however stated repeatedly that they are unwilling to re-open re-negotiations on the WA, but would consider making changes to the PD.

If the Government is unable to command majority support in the House of Commons for her deal, there is a “heightened prospect of the UK leaving the EU without a deal on 29 March 2019” – unless, of course, Article 50 period is extended.

The vote today avoids bringing back the same deal and risking another defeat in a ‘meaningful’ vote.  It is – according to the Government a ‘neutral’ and non-binding ‘amendable’ vote: “That this House welcomes the Prime Minister’s statement of 12 February 2019; reiterates its support for the approach to leaving the EU expressed by this House on 29 January 2019 – and notes that discussions between the UK and the EU on the Northern Ireland backstop are ongoing.”

The Government clearly choosing to ignore the warnings from the Bank of England, business and commerce for clarity with 6 weeks to Brexit – and the next opportunity for a vote postponed until the end of February.

Background

On 7 February 2019, the President of the European Commission reiterated that the EU is not willing to reopen the WA – but expressed openness to adding wording to the PD.   The Prime Minister and the European Commission President will meet again before the end of February to take stock of discussions.

The Leader of the Opposition, Jeremy Corbyn MP, wrote to the Prime Minister on 6 February and suggested the Labour party could support the WA if changes to the PD, including a commitment to a permanent UK-EU customs union, were enshrined in law.  The Government has rejected the proposal for a customs union as it would prevent the UK from pursuing an independent trade policy.

The Prime Minister has stated her opposition to extending Article 50.

The Leader of the Opposition has however suggested that an Article 50 extension is now inevitable given that neither the legislation needed in place for exit day, or the preparations required in a no-deal Brexit will be in place.

EU leaders have indicated a willingness to extend Article 50 – for a “specific purpose and time limited period”, but re-iterated that they care unable to re-open negotiations on the WA.

1.1   The Meaningful Vote postponed

On 25 November 2018, the European Council – including Theresa May on behalf of the UK – approved the Withdrawal Agreement (WA) and the Political Declaration (PD).

The House of Commons vote to approve both the WA and PD was scheduled for 11 December 2018 – but was postponed by the Prime Minister in recognition of the widespread opposition to the WA in the House of Commons.

Since the approval of the WA on 25 November, EU leaders have however been adamant that they are unwilling to re-open negotiations on it.  On 29 November, the EU’s chief Brexit negotiator Michel Barnier told the European Parliament: “Given the difficult circumstances of this negotiation and given the extreme complexity of all the issues of the British withdrawal, the treaty that is on the table is the only deal possible”.

1.2   EU Assurances to the UK on the Backstop

On 13 December EU Leaders – the European Council – stated that: “The Union stands by this agreement and intends to proceed with its ratification.  It is not open for renegotiation”.

The European Council underlined that the backstop is intended as an insurance policy to prevent a hard border on the island of Ireland and ensure the integrity of the Single Market.  Further, were the backstop to be triggered – it would apply temporarily.

In an exchange of letters between Prime Minister Theresa May and the Presidents of the European Council (Donald Tusk) and European Commission (Jean-Claude Juncker) on 14 January 2019, the EU sought to provide further assurances to the UK.

The letter from Presidents Juncker and Tusk sought to reassure the Prime Minister of the legal weight of the December 2018 European Council Conclusions in which it had emphasised the EU’s intention to conclude a future relations agreement quickly, so that the backstop “would only be in place for as long as strictly necessary”. We covered the letter in a previous posting at:

eu-closes-the-door-on-renegotiation-of-the-deal

The EU letter stressed the link between the WA and the PD as “part of the same negotiated package” and pledged to establish the Commission negotiating structure for the future relations agreement “directly after signature” of the WA “to ensure that formal negotiations can start as soon as possible after the withdrawal” of the UK.

1.3   Political Declaration and Future Relations

The EU has indicated that while it is unwilling to reopen negotiations on the WA it would be willing to discuss changes to the PD – setting out more clearly what the UK’s future relationship with the EU will be.  The Labour party has also proposed changes to the PD to provide clarity on the future relationship and reduce the likelihood of the backstop being invoked (see below).

The PD outlines a set of commitments on a proposed future agreement on the UK-EU relationship and provides some parameters for the future negotiations.

It refers to:

• the ending of free movement of people between the UK and EU – which rules out EEA/Single Market membership;
• the development of an independent trade policy for the UK – which rules out a permanent UK-EU customs union.

The PD is non-binding – and the UK and EU could move beyond these parameters in a future agreement. Paragraph 138 states that once the WA has been approved by the UK and EU, preparatory work would begin on negotiations for the future relationship with both parties committed to “best endeavours” to ensure the future relationship enters into force by the end of the envisaged post-Brexit transition period – 31 December 2020 – or December 2022 at the latest and if the transition needs to be extended.

It states that the priority will be to find alternative, permanent arrangements to ensure there is no hard border between Northern Ireland and Ireland.

It remains unclear what these permanent arrangements to prevent a hard border emerging between Northern Ireland and Ireland would be and how these might be different from the previously discussed backstop arrangements.  Paragraph 27 of the PD refers to consideration of facilitative arrangements and technologies for ensuring there is no hard border in Ireland – but doubts have been expressed as to whether such arrangements can provide a solution.

1.4   Commons Rejection of WA

The House of Commons on 15 January 2019 rejected the deal by 432 votes to 202 – a majority of 230.

That night – following the vote – the Prime Minister said she would hold a series of meetings with colleagues, the DUP and “senior parliamentarians” in an attempt to find a deal that could gain the support of Parliament.

On 16 January Theresa May survived a vote of confidence in her government – and again appealed to colleagues, the Democratic Unionist Party and senior MPs to meet her for talks on reaching consensus on a Brexit ‘Plan B’.

Immediately following the House of Commons vote, European Commission, President Juncker, maintained that the deal was a “fair compromise and the best possible deal” and “the only way to ensure an orderly withdrawal”.

On 16 January in a speech to the European Parliament, the EU’s chief Brexit negotiator, Michel Barnier, also insisted that the negotiated WA represented the “best possible compromise” and its ratification remained “necessary”.  He also said that “the backstop which we have agreed with the United Kingdom must remain a backstop and it must remain credible”.

Barnier said that if the UK chose “to change its red lines, and to be more ambitious and go beyond a simple free trade deal in our future relationship, then the EU would be ready to immediately support this evolution and respond favourably”.

1.5   Government statement on Brexit and votes on motion, 29 January 2019

On Monday 21 January, Theresa May made a statement in the Commons – as she was required to do in accordance with the European Union (Withdrawal) Act 2018 – setting out how the Government “intends to proceed” in relation to the Article 50 negotiations and tabled an ‘amendable’ neutral motion saying that Parliament had considered the statement.  The motion was debated and voted upon on 29 January.

On 16 January, Parliament’s “Exiting the EU” Committee recommended that a series of indicative votes be held on options for proceeding with withdrawal and negotiated a new relationship framework with the EU.

In the end, the Commons voted in favour of an amendment by Graham Brady MP – with the support of the Prime Minister and the Government.  It said that the support of the House for the deal was contingent upon “replacing” the backstop with “alternative arrangements.”

A second amendment – tabled by Caroline Spelman MP – rejecting the possibility of a no-deal Brexit was also approved by 318 votes to 310.  Note that this amendment has no direct legal effect.  It stops short, for example, of providing a legislative mechanism by which Article 50 would be “revoked” in the absence of a ratified deal on 29 March 2019 – unlike the amendment proposed by Yvette Cooper MP.

The Prime Minister took this amendment as a mandate to seek legally binding changes to the withdrawal agreement and backstop – guaranteeing “no return to a hard border between Northern Ireland and Ireland.”

On 30 January, The President of the European Council, Donald Tusk, re-iterated that: “The EU position is clear and consistent.  The Withdrawal Agreement is not open for renegotiation. Yesterday, we found out what the UK doesn’t want. But we still don’t know what the UK does want.”

Labour leader Jeremy Corbyn, said that as the House had “emphatically voted to reject the no-deal option” he would now be prepared to enter talks with the Prime Minister to discuss where progress might be made to reach a deal which Labour is prepared to support.  These talks took place the next day.

During the debate on 29 January, the Prime Minister said that a revised deal would be brought back to the House for a second meaningful vote “as soon as we possibly can”.  If a revised deal is not brought back to the House by Wednesday 13 February – the Government will make a statement and, again, table an amendable motion for debate the next day.

1.6   Proposals for Alternative arrangements to Backstop

On 30 January 2019 the Prime Minister’s spokesman told reporters that Mrs May is considering “three possible alternative arrangements to the so-called Irish backstop”.  The BBC reported on 4 February that the alternatives to the backstop that the Prime Minister wants to discuss with EU leaders include:

• a “trusted trader” scheme to avoid physical checks on goods flowing through the border
• “mutual recognition” of rules with the EU
• “technological” solutions
• Malthouse compromise

The Malthouse-Compromise is supported by MPs from both the ‘leave’ and ‘remain’ wings of the Conservative and has two main elements:

• Firstly, it will look at alternative arrangements that have already been proposed to the backstop;
• Secondly, if these prove unacceptable to the EU, the UK would approach the EU with a ‘managed no-deal’ proposal – in which the UK asks the EU to honour the Withdrawal Agreement without the backstop – and under which the UK promises to pay relevant financial contributions for this transition period.

Liberal Democrats leader, Vince Cable MP, has objected to civil servants working with backbench MPs – suggesting in a letter to the Cabinet Secretary, Mark Sedwill, that this might breach guidelines on the impartiality of civil servants laid out in the Cabinet Manual.

On 6 February, European Commission President, Jean-Claude Juncker met the Irish Prime Minister, Leo Varadkar, and issued a joint statement reaffirming that the “Withdrawal Agreement is the best and only deal possible” and “is not open for renegotiation”.

“So-called alternative arrangements can never replace the backstop.  We need the backstop.  We need the withdrawal agreement.  And – when it comes to future relations – we can look into alternative arrangements – but they can never replace the backstop.”

Mr Tusk also commented: “I’ve been wondering what that special place in hell looks like, for those who promoted Brexit, without even a sketch of a plan how to carry it out safely”.

On 7 February the Prime Minister held further talks with the Presidents Juncker and Tusk.  Mrs May suggested the three options for changing the backstop..

After their meeting in a joint statement, Mrs May and Juncker said:  “The prime minister described the context in the UK Parliament, and the motivation behind last week’s vote in the House of Commons seeking a legally binding change to the terms of the backstop.  She raised various options for dealing with these concerns in the context of the withdrawal agreement in line with her commitments to the Parliament.

President Juncker underlined that the EU27 will not reopen the withdrawal agreement, which represents a carefully balanced compromise between the European Union and the UK, in which both sides have made significant concessions to arrive at a deal.  President Juncker however expressed his openness to add wording to the political declaration agreed by the EU27 and the UK in order to be more ambitious in terms of content and speed when it comes to the future relationship between the European Union and the UK.  President Juncker drew attention to the fact that any solution would have to be agreed by the European parliament and the EU27.

The prime minister and the president will meet again before the end of February to take stock of these discussions.

1.7   Discussion of Extension of Article 50

The Prime Minister has been clear that she intends to deliver on the 2016 referendum result in taking the UK out of the EU.  She has also spoken against the possibility of extending Article 50 and repeatedly stated that the UK will leave the EU on 29 March 2019.

“I’m clear that I’m going to deliver Brexit, I’m going to deliver it on time, that’s what I’m going to do for the British public. I’ll be negotiating hard in the coming days to do just that.”

Corbyn has pointed out that even if the Prime Minister’s deal were to somehow achieve a majority in this House next month – there is no chance that the necessary legislation -primary legislation and an extensive catalogue of secondary legislation – some 8 Acts of Parliament and 600 statutory instruments – could complete the process of becoming law by 29 March.

An extension to Article 50 would also be required under the Labour party’s favoured scenario of holding a general election, while a longer extension would be required if the option favoured by the Liberal Democrats and cross-party campaigners of another referendum (with an option to remain) was adopted.

Foreign Secretary, Jeremy Hunt MP, indicated on 31 January 2019 that an extension of Article 50 could be requested if the WA is approved shortly before 29 March, in order to provide for extra Parliamentary time to pass legislation to prepare for Brexit.

Section 13 of the European Union (Withdrawal) Act 2018 provides that the UK cannot legally ratify the deal until the Commons has approved a resolution approving both the negotiated withdrawal agreement and the framework for the future relationship – and European Union (Withdrawal Agreement) Bill becomes law.

A report by the Institute for Government says it is “increasingly unlikely that the Prime Minister will be able to get the six outstanding Brexit bills through Parliament in time if there is a no-deal Brexit on 29 March.”

We covered the Bills in previous postings.  They are: the Trade Bill, Agriculture Bill, Fisheries Bill, Immigration Bill, Healthcare (International Agreements) Bill and the Financial Services Bill.

In addition, only 142 of the 600 statutory instruments required to prepare the statute book for exit day had made their way through Parliament as of 11 February 2019.

A further 401 had been ‘laid’ using the “medieval” Henry VIII powers to override Parliament.

A request by the UK to extend the Article 50 negotiating period would require unanimous agreement by the EU27 leaders in the European Council. T he European Commission and Member State representatives have indicated that their response to such a request would depend on the reasons the extension was being requested, and that they would not favour an extension to re-open negotiations on the WA.

1.8   Labour party proposals and Government response

In a letter to the Prime Minister on 6 February, Jeremy Corbyn said that the Government would need to enshrine five changes to the Political Declaration in law to secure Labour support for a Withdrawal Agreement.  The changes would provide for the following:

A permanent and comprehensive UK-wide customs union, involving alignment with the union customs code, a common external tariff and an agreement on commercial policy that includes a UK say on future EU trade deals.

Close alignment with the Single Market, underpinned by shared institutions and obligations, with clear arrangements for dispute resolution.

Dynamic alignment on rights and protections so that UK standards keep pace with evolving standards across Europe.

Clear commitments on participation in EU agencies and funding programmes, including in areas such as the environment, education, and industrial regulation.

Unambiguous agreements on the detail of future security arrangements, including access to the European Arrest Warrant and vital shared databases.

The Prime Minister responded to Mr Corbyn’s letter on 10 February rejecting the changes.  May’s letter referred to the wording within the Political Declaration that recognised that the UK would have an “independent trade policy” – with the ability for the UK to “strike our own deals”.  She also said that the Government did not support automatic alignment to EU rules on workers’ rights or environmental protection – but would be “prepared to commit to asking Parliament whether it wishes to follow suit whenever the EU changes its standards in these areas”.

The Financial Services (Implementation of Legislation) Bill 2017-19 had its ‘second reading’ yesterday – 11 February 2019.

The Bill enables the Treasury to make corresponding or similar provisions in UK law to match the upcoming EU financial services legislation in the event of a no-deal Brexit.

Currently, most financial services regulation is made at EU level.  It is either directly applicable or transposed into domestic law by ‘secondary legislation’.

In preparation for leaving the EU, the European Union (Withdrawal) Act 2018 – EUWA – incorporates all EU law on the day of exit into UK law so that existing regulation continues to have effect after Brexit.

If the UK ratifies the Withdrawal Agreement, it will enter an implementation period until 31 December 2020 – during which EU law will continue to apply.  During this period the UK will continue to implement financial services regulation through secondary legislation.

However, if the UK leaves the EU with no deal, there will be no mechanism through which financial services regulation can be updated without the need for primary legislation.

There are several items of EU financial services legislation which have either been adopted by the EU but will not be implemented by the time the UK leaves – or that are currently in negotiation and may be adopted shortly after.  There are at least 16 items listed that are referred to as “in-flight files”.  The Bill would give the Treasury the power to create corresponding or similar UK regulations, subject to any adjustments appropriate to the UK’s new position outside the EU.

The power is subject to the same restrictions on scope as the correcting power in the EUWA and may only be used for up to two years after exit day.  Statutory instruments made under the power in this Bill will be subject to the affirmative resolution procedure, which requires a vote in both Houses. The Treasury will be required to produce six-monthly reports on the use of the power.

The Bill completed its stages in the House of Lords on 6 February 2019 – and had its ‘First Reading’ in the House of Commons on the same day.  ‘Second Reading’ is set to be on Monday 11 February 2019.

The Lords raised various issues at Committee Stage – which the Government has taken on board – moving amendments with the following effects:

To restrict the adjustments that the Treasury can make.  The Treasury will only be able to make policy changes to those files that were not settled while the UK was an EU member, and as long as the changes are not “major”.

For those files that the UK fully negotiated as a Member State, the adjustments will be limited to fixing deficiencies arising from the UK’s exit (as happens under the EUWA).

To require more detailed and frequent reporting from the Treasury on its proposals and use of powers.

To extend these reporting requirements to the financial regulators (Bank of England, PRA, FCA), where the powers are sub-delegated to them.

To add proposed regulations to facilitate sustainable investment to the list of in-flight EU files that the Bill refers to.

Contact us at enquiries@brexit-partners.com for detailed impact assessments of the following In-flight files, including:

• Markets in Financial  Instruments Regulation
• Bank Recovery and Resolution Directive II
• CCP Recovery and Resolution
• Covered Bonds Regulation and Directive
• Capital Requirements Regulation II (CRR II) & Capital Requirements Directive V (CRD V)
• Cross Border Distribution of Funds Regulation & Directive
• Central Securities Depositories Regulation
• European Market Infrastructure Regulation 2.2
• EMIR REFIT (Regulatory Fitness and Performance Programme)
• European Supervisory Authorities Review
• Investment Firms Review
• Prospectus Regulation
• Securities Financing Transactions Regulation
• SME Growth Markets Regulation
• Sustainable Finance: Low Carbon Benchmarks
• Sustainable Investment Regulations

Financial services if there is no-deal

The UK’s financial services sector is the largest in Europe and is deeply connected with it.  An estimated 10% of its revenues come directly from the EU, making it the third most-reliant sector on the EU market on that measure, after oil and gas at around 40% and manufacturing at around 20%.

All the main European banks and insurance companies operate in London, as UK companies do in Europe, under a system of ‘passports’.

Any company authorised in any EU Member State can operate in any other EU Member State under its passport.  It is the sudden loss of this passport without other arrangements in place that is the biggest potential problem arising out of ‘no deal’.

A PwC study concluded that the loss of mutual market access in financial services would be detrimental to both sides, although it would hurt the UK more. It estimated that no access would make the UK economy 1.3% smaller than otherwise by 2030, and 0.3% smaller for the EU27.

The impact of no deal on financial services was estimated by the Government at around -9% of economic activity for the industry in the long run.

The Government has published a series of no-deal notices and guidance for financial services.  Contact enquiries@Brexit-Partners.com for further information in the impact of these notices.

Background

We previously reported on the concerns expressed by Parliament and concerned citizens groups into the use of secondary legislation rather than the full scrutiny process in the scramble to complete all the necessary legislation before Brexit: Brexit – Henry VIII – and Statutory Instruments

Full Parliamentary briefing: http://researchbriefings.files.parliament.uk/documents/CBP-8493/CBP-8493.pdf

UK Government contingency plans – codename “Project After” – could cut UK taxes and tariff levels in a no-deal.  Cabinet Secretary, Sir Mark Sedwill, is overseeing the work as the chances of MPs backing Theresa May’s Withdrawal Agreement next week.

It comes against the backdrop of the Netherlands Government announcing a further 250 companies are moving to Amsterdam.

Among the UK plans being considered to reverse the flow of business and commerce out of Britain after 29 March are: cuts to corporation tax and VAT to encourage more business investment; reducing tariffs; and export support.

In parallel, the Government’s “Project Bluebell” is looking at how specific sectors such as agriculture, car manufacturing and pharmaceuticals could be protected in a no-deal Brexit.

Theresa May is legally bound to put the results of her attempts to renegotiate the Withdrawal Agreement to MPs next Thursday – but has returned from Brussels and Ireland without making any progress.  MPs will then be entitled to vote on a series of different options for the way forward in the Commons.

In a separate UK Government ‘no-deal Technical Notice” – updated on 4 February – hauliers will be able to bring goods into the UK without facing checks at the border in a bid to avoid traffic jams for a temporary period.

The guidance says that companies will be expected to make customs declarations and to disclose safety and security information ahead of travelling to Britain from 29 March.  The special arrangement – which will affect goods coming in to 20 ports around the country – is expected to last for up to six months.

“For a temporary period, HMRC will allow most goods moving from the listed roll on roll off locations to leave the UK port or train station before you’ve told us that the goods have arrived.

“If you’ve submitted either a full declaration or a simplified frontier declaration, you must tell us as soon as possible when the goods arrive in the UK.”

The list of official roll-on, roll-off locations includes Dover, Folkestone, Liverpool and Hull.

Ferry operators and Channel Tunnel officials meanwhile will need to have “reasonable belief” that customers have made the necessary declarations in advance of their journey – such as by requesting it as part of their terms and conditions. “You’ll need to show the booking to HMRC if we ask for it,” the document states.

On the other side of the Channel, the European Commission is also ramping up contingency planning – with provisional agreement reached yesterday on realigning the North Sea–Mediterranean Corridor and investing in the adaptation of transport infrastructure for security and border checks – “taking into account the withdrawal of the United Kingdom”.

The European Parliament and the Council reached agreement on the European Commission’s proposal to adjust alignment of the one of the nine “core corridors” of the Trans-European Transport Network.

The Regulation adds:

a new maritime link between the Irish core ports of Dublin, Cork and Shannon to the core network ports in France (Le Havre, Calais, Dunkirk), Belgium (Zeebrugge, Antwerp, Gent) and the Netherlands (Terneuzen, Rotterdam, Amsterdam).

a new funding priority to the Connecting Europe Facility (CEF) – adapting transport infrastructure for security and external border check purposes.

These measures will only apply in case the United Kingdom withdraws from the EU without an agreement.

The risk is that the two sides are creating a self-fulfilling scenario.  The UK and EU are each building up a head of steam heading for a no-deal Brexit – creating a momentum that it may soon be impossible to stop – no matter that the majority of politicians don’t want a damaging no-deal Brexit on 29 March.

Background

Moving goods to and from the EU through roll on roll off ports or the Channel Tunnel:  arrangements for importers or exporters, using roll on roll off ports or the Channel Tunnel to transport goods between the EU and the UK in the event that the UK leaves the EU without a deal.

Overview

In the event that the UK leaves the EU without a deal: from 23:00 GMT on 29 March 2019, UK businesses will need to apply the same processes when trading with the EU trade that already apply when trading with the rest of the world.

importers using Roll on Roll off locations will have to submit customs declarations and pay any customs duty, excise duty or VAT that’s due.

Importing to the UK from the EU

Be ready to make customs declarations and follow other customs rules for the goods you import.

If you’re importing through a roll on roll off listed location, make your customs declaration before checking your goods onto the ferry or train on the EU side – you cannot complete customs formalities when your goods arrive in the UK.

The main customs form used in international trade is the “Single Administrative Document”.  This can be submitted electronically.

Before 29 March 2019, you’ll need to:

• get an Economic Operator Registration Identification (EORI);
• decide whether you want to use a customs agent to process customs declarations for you, or buy software so you can make declarations yourself using CHIEF or Customs Declaration Service systems;
• register in advance to use the transitional simplified procedures which will make customs processes easier;
• make sure you’re ready to send your EORI or master reference number to the haulage company moving your goods.

Making customs declarations before your goods leave the EU

Make your declaration before you check-in.  You can register to use transitional simplified procedures to:

• transport your goods into the UK without having to make a full customs declaration at the port;
• make a more detailed declaration later (a supplementary declaration);
• defer paying your duty.

Once registered make either:

• a simplified frontier declaration (an electronic declaration submitted to HMRC); or
• an entry in your own records of when the goods are crossing the border.

Both of these declarations ask for less information upfront compared to a full customs declaration. If you’re importing controlled or restricted goods you’ll only be able to use a full declaration or a simplified frontier declaration.

Customs declarations can be changed up until the point of check-in at the ferry or train at the departure port.

You may be asked to confirm that you’ve completed a declaration as part of the terms and conditions when booking your transport or at check-in.

You’ll get a unique master reference number when you complete either a full customs declaration or a simplified frontier declaration.

Confirm with your haulage company that you’ve made a customs declaration before departure by giving them either the:

• master reference number (to show you’ve made a full or simplified frontier customs declaration); or
• your EORI number if you’ve made an entry in your own records.

Hauliers may be asked to show the master reference number or your EORI number to prove a declaration is in place.

When your goods arrive in the UK

For a temporary period, HMRC will allow most goods moving from the listed roll on roll off locations to leave the UK port or train station prior to being informed that the goods have arrived.  If you’ve submitted either a full declaration or a simplified frontier declaration, you must tell HMRC as soon as possible when the goods arrive in the UK.

Update declarations using your software application – or empower your agent can do this for you – no later than the end of the working day after the goods’ arrival in the UK.

If you’ve used an entry in your records – update your records to show the actual time the goods arrived in the UK.

For both the simplified frontier declaration and entry in your own records: submit a supplementary declaration (a more detailed declaration) by the fourth working day of the month after your goods’ arrival in the UK.

If you have duties or taxes to pay, HMRC will take draw upon your direct debit on the 15th day of the month after the goods arrive in the UK.

Haulage companies – imports

When haulage companies – or someone acting for them – are accompanying goods through the border – for example, the driver accompanying the load on board the ferry – they have a responsibility to submit safety and security information through an Entry Summary Declaration before the goods arrive in the UK.

For roll on roll off ports you must submit the declaration at least 2 hours before the goods are due to arrive in the UK.

For Eurotunnel you must submit the declaration at least 1 hour before check-in at Coquelles – this is because the UK border is actually crossed in France.

As well as submitting an Entry Summary Declaration you should carry either:

• a master reference number to show that you’ve made a full or simplified frontier customs declaration; or
• the EORI number of the importer if the importer made an entry in their own records.

The importer or their customs agent will give these to you.

Ferry operators and the Channel Tunnel operator – imports

If you’re a ferry operator or Channel Tunnel operator you must have reasonable belief that your customers have made the customs declarations.

You can do this through your terms and conditions that your customers use when booking their transport.

You’ll need to show the booking to HMRC if we ask for it.

For goods that are accompanied by a haulier – the haulier is responsible for submitting the Entry Summary Declaration (the safety and security declaration) before the goods leave the EU.

There’s no obligation for the ferry or Channel Tunnel operator to confirm that this declaration has been submitted.

Where goods are unaccompanied – for example goods on trailers or in containers – the ferry operator is responsible for submitting the Entry Summary Declaration before the goods leave the EU.

You must include the trailer or container number on the declaration.

Exporting

If you’re exporting goods from the UK from a roll on roll off listed location to the EU, you or your customs agent must complete a combined safety and security and customs declaration before the goods get to the departure port.  You’ll be able to do this using the National Export System.

If you do this yourself, you will need to enter the correct customs duty tariffs.

You must include the vehicle registration number of the vehicle to be used to transport your goods on the declaration.  Ask the company that’s exporting your goods (usually a haulier) for the number.

You need this so that you can complete the combined export and safety and security declaration in full.

If your goods are being transported unaccompanied on a trailer or in a container you must include the trailer or container number on your declaration.

You’ll need to:

• get an Economic Operator Registration Identification (EORI);
• decide whether you want to use a customs agent to process customs declarations for you, or use the National Export System yourself.

Once you’ve submitted the combined customs and safety and security declaration HMRC will send you a notification that:

• allows you to proceed;
• asks for additional documentation;
• asks you to make sure the haulier or driver transports your goods to a Designated Export Place or authorised premises, so that we can make customs checks before we give you clearance.

If you’re exporting high risk goods, you must give HMRC a full departure message so that we can complete the export and account for any duty refund or discharge any liability.  You can do this by either:

• submitting online forms to HMRC along with evidence of export;
• arranging for an appropriate third party intermediary to update HMRC IT systems.

The European Commission has responded to “the increasing risk that the United Kingdom may leave the EU on 30 March this year without a deal”.  In anticipation of a no-deal scenario, the Commission has further extended its contingency planning to include the ‘Erasmus+ programme’, ‘social security coordination’, and the ‘EU budget’.

This follows the calls by the European Council – comprised of the 27 Heads of States from the remaining EU nations – to “intensify preparedness work at all levels” and their adoption of the European Commission’s ‘Contingency Action Plan’.  This includes a series of legislative measures and contingency proposals for EU fisheries.  They come in addition to the extensive preparations by the European Commission that began in December 2017.

The measures will ensure that in the event of a “no-deal” scenario:

• Young people from the EU and the UK who are actively participating in the Erasmus+ programme on 30 March 2019 can complete their stay without interruption;
• EU Member State authorities will continue to take into account periods of insurance, (self) employment or residence in the United Kingdom before the date of the withdrawal, when calculating social security benefits, such as pensions;
• UK beneficiaries of EU funding will continue to receive payments under their current contracts, provided that the United Kingdom continues to honour its financial obligations under the EU budget.  This issue is separate from the financial settlement between the European Union and the United Kingdom.

It is important to note that these measures will not – and cannot – “mitigate the overall impact of a no-deal scenario – nor do they in any way compensate for the lack of preparedness or replicate the full benefits of EU membership or the favourable terms of any transition period, as provided for in the Withdrawal Agreement”.

The European Commission noted that: “Today’s proposals are temporary in nature, limited in scope and will be adopted unilaterally by the EU.”  They take into account discussions with the remaining EU27 Member States.

The risk is that the two sides are creating a self-fulfilling scenario.  The UK and EU are each generating momentum towards a no-deal Brexit – a momentum that takes the decision out of the hands of politicians and into the hands of civil servants and business.  A momentum that it may soon be impossible to stop – no matter that the majority of politicians don’t want a damaging no-deal exit on 29 March – in just seven weeks’ time.

A less reported quote from Donald Tusk is that the chances of stopping Britain leaving the EU were now close to non-existent because of the “pro-Brexit stance of the leader of the Opposition” and the lack of “effective leadership for Remain”.  And there seems to be little chance of Theresa May’s ‘deal’ in its original November 2018 form being accepted on 14 February – especially after she voted against it herself last week.

Banks are beginning to move hundreds of billions of pounds of assets out of the UK because financial service regulations will soon lapse.  Exporters in the Far East – whose ships take weeks to get to Britain – are getting ready to divert their cargoes to continental ports according to the Business Secretary: “because trade arrangements will soon be suspended”.  Industry data universally shows that factories are stockpiling supplies – and the NHS is busy hoarding medicines.

The legal default is for Britain to leave the EU without a deal – unless someone comes up with a majority for an alternative — and there is no sign of the political leadership required coming from any quarter that might secure a majority.

As the timetable runs down, Britain risks a no-deal Brexit that few want but that may become unstoppable.  It takes time to turn – and the lead-times necessary mean no-deal instructions are now being issued.  One seasoned political insider who has closely studied the dynamics of Brexit now puts an 80% probability on a no-deal Brexit at 23:00 GMT on Friday 29 March.

Background

Erasmus+:  is one of the EU’s flagship programmes.  On 30 March 2019, it is anticipated that there will be 14,000 young people from the EU27 – including students, trainees in higher education and vocational education and training, youth learners, and educational staff – resident in the United Kingdom thanks to the Erasmus+ programme.  Some 7,000 UK participating students will be resident in the EU27.

In a strict no-deal scenario, they would not be able to complete their Erasmus+ terms – and may no longer be eligible for grants.  The European Commission proposal aims to remedy this by ensuring that in a no-deal scenario, students and trainees abroad participating in Erasmus+ can complete their studies and continue to receive the relevant funding or grants.

Protecting citizens’ social security rights:  the European Commission has consistently made clear that the rights of EU citizens in the United Kingdom and UK nationals in the EU are its priority.  They: “should not pay the price for Brexit.”  Today’s proposal aims to ensure that in a no-deal scenario, the entitlements of those people who exercised their right to free movement before the UK’s withdrawal are safeguarded.  These entitlements include periods of insurance, (self) employment or residence in the United Kingdom before the withdrawal.  For example, this means that if an EU27 citizen worked for 10 years in the United Kingdom prior to Brexit, this period should be taken into account when his/her pension rights are calculated by the competent authorities in the EU Member State where he/she retires.

The proposed Regulation ensures that Member States continue applying the core principles of EU social security coordination – namely the principles of equality of treatment, assimilation and aggregation.  Today’s proposal: “by no means replicates the significant advantages of the Withdrawal Agreement that was agreed by the UK and EU on 14 November 2018.  It does not cover rights accumulated after 29 March 2019 – nor does it cover the exportability of cash benefits, the continuous provision of sickness benefits in kind and the rules on applicable legislation.

Protecting the beneficiaries of the EU budget:  As has been endorsed on many occasions, all commitments taken by the 28 Member States should be honoured by the 28 Member States.  This is true in a no-deal scenario – where the UK would be expected to continue to honour all commitments made during EU membership.

Today’s proposal enables the EU to be in a position – in a no-deal scenario – to honour its commitments and to continue making payments in 2019 to UK beneficiaries for contracts signed and decisions made before 30 March 2019.  This is on condition that the UK honours its obligations under the 2019 budget and that it accepts the necessary audit checks and controls.  This would help mitigate the significant impact of a no-deal scenario for the wide range of areas that receive EU funding, such as research, innovation or agriculture.

This issue is separate from – and without prejudice to – the financial settlement between the EU and the United Kingdom in a no-deal scenario.

Next steps

The European Commission will work closely with the European Parliament and the European Council to ensure the adoption of the proposed legislative Acts so that they are in force by 30 March 2019.  The Commission also highlighted to the European Parliament and to the European Council that it is important for delegated Acts to enter into force as rapidly as possible.

Chronology

14 November 2018:  the negotiators of the European Commission and the United Kingdom agreed on the terms of the Withdrawal Agreement.

22 November 2018:  the European Commission approved the completed Withdrawal Agreement

25 November 2018:  the European Council endorsed the Withdrawal Agreement (Article 50) and invited the European Commission, Parliament and Council to take the necessary steps to ensure that the Withdrawal Agreement can enter into force on 30 March 2019.  This will provide for an orderly withdrawal of the UK from the EU.

It was noted that the ratification of the Withdrawal Agreement in the United Kingdom by Parliament is currently uncertain.

5 December 2018:  the European Commission adopted two proposals for the Council to ratify, and sign in order to conclude the Withdrawal Agreement.  For the Withdrawal Agreement to enter into force the European Council must now authorise the signature of the text on behalf of the European Union and the European Parliament must then give its consent before being concluded by the Council.

It was noted that the Withdrawal Agreement has failed to be ratified by the United Kingdom Parliament as required by its own constitutional requirements.

Ratification of the Withdrawal Agreement is the priority of the European Commission.  

It was noted that irrespective of the scenario envisaged, the United Kingdom’s choice to leave the European Union will cause significant disruption.  Stakeholders, including 27 states and EU authorities need to urgently prepare for two possible main scenarios:

if the Withdrawal Agreement is ratified before 30 March 2019, EU law will cease to apply to and in the UK on 1 January 2021 – that is, after a transition period of 21 months.  The Withdrawal Agreement includes the possibility for a single extension of the transition period for up to one or two years;

if the Withdrawal Agreement is not ratified before 30 March 2019, there will be no transition period and EU law will cease to apply to and in the UK as of 30 March 2019.  This is referred to by the Commission as the “cliff-edge, no-deal” scenario.

The UK Government has published 104 no-deal Technical Notices.  The European Commission has published a complementary set 88 sector-specific preparedness notices for the EU 27 remaining member states to inform the public about the consequences of the UK’s withdrawal in a no-deal scenario.  They are available in all official EU languages.

Today’s proposals add 18 legislative proposals in the context of Brexit preparations and contingency planning.

The European Commission has held widespread technical discussions with the EU27 Member States both on general issues of preparedness – and on specific sectorial, legal and administrative preparedness steps.  The slides used in these technical seminars are available on request.

The European Commission is now visiting each of the 27 EU Member States to ensure national contingency planning is on track – and to provide any necessary clarifications on the no-deal Brexit preparations.

Reference:

http://europa.eu/rapid/press-release_IP-19-743_en.htm