Brexit: Customs & Regulatory fixit following UK’s exit
SHARE facebook



By: Krypt Team - February 28th, 2020

Authored by: Vijendra Kargudri

After a prolonged joust for the exit, on February 1, 2020 UK woke up no longer being a member of the EU! Even though for now it is a mere separation, than a complete divorce that UK had voted for more than 3 years ago. There is time till the end of this year for UK to finalize its divorce from EU, which will happen when both sides work out on the terms to part ways along with decisive matter of trade, government and people-to-people relationship. Though the far-reaching measures & changes are slated for December 31, 2020, nonetheless some things will be different going ahead.

Changes around the corner

UK can now plan for new trade partners, hopefully without snubbing EU. Having formally left EU on January 31, 2020, UK can can start negotiating trade deals with other countries. But EU accounts for about half of UK’s trade and PM Boris Johnson will make sure that it is doesn’t disrupt things to worse.

  • A 40-member task force based out of Downing Street will handle upcoming negotiations with EU as the Brexit Department set up in 2016 by former PM Theresa May will be disbanded.
  • Britain’s diplomatic presence in Brussels will be re-branded, having limited access to EU premises & information.
  • Separating from the EU, British passports will go back to their traditional blue instead of burgundy color that was recommended by EU rules.
  • About 3 million Commemorative Brexit 50 pence coins inscribed with – “31 January” and “Peace, prosperity and friendship with all nations” will get into circulation.

Losing an easy access to the EU will be undesirous for Britain’s financial services sector. It has indicated to use the threat of restricting access to leverage for wider demands, like fishing access to UK waters, which can affect the level playing trading options in offering.

Things that won’t change until 2021?

During the transition phase, the UK nationals will be allowed to live and work in the EU, and vice-versa. Britons living in the EU will continue to vote & contest in municipal elections.

  • Members of the Scottish Parliament will continue flying the EU flag, rejecting a proposal to lower the flag after UK left EU.
  • UK will continue to contribute into the EU budget during the transition, allowing them to be part of existing EU schemes.
  • Northern Ireland, though being a part of the UK, shares a border with Ireland, an EU member. The UK & EU have agreed upon Northern Ireland being allowed to follow EU’s customs code at its airports and EU’s standards for agricultural & manufactured goods despite not formally being a part of the EU.

Future of cross-border trading

With no new IT system in place till 2025, Michael Gove, the cabinet office minister admitted to years of confusion at UK’s borders because of Brexit, the “inevitable” customs procedures & regulatory checks are going to be the reality of leaving the single market & customs union, which was avoided during the election campaign.

Everybody from UK exporting to the EU will face new barriers, with checks on – food & goods of animal origin, customs declarations, and the need for safety & security certificates. Though slated on January 1, 2021, it will not be before 2025, new technology is likely to get implemented.

Until then the traders will need to cope with a “costly ‘make do & mend’ approach”. It is likely to take 5 years to deliver a smart border, allowing smooth online checks on goods, though the firms need to be geared up for “significant change” in under a year.

Though the UK will be outside the single market & customs union, the 5 year wait for a smart border will pose a gargantuan challenge in the Irish Sea, where the withdrawal agreement made a legal commitment to introduce checks. To this the EU has warned of sanctions if there is any backsliding by UK.

How can Krypt help?

Krypt as an SAP preferred partner, can help global businesses and their Trade Managers to mitigate the inevitable Brexit implications, in form of customs procedures & regulatory checks through accurate customs filing, mitigating – sanctions, tariffs, hefty penalties, taxes, duties, etc., that can ensue post Brexit.

If you wish to know about our products/services, please request a demo or do contact us. +

Subscribe to Our Blog