Brexit is the impending withdrawal of the United Kingdom (UK) from the European Union (EU). It follows a public referendum, which occurred on June 23, 2016 when UK voters made the decision to leave the EU. This set in motion the negotiations for the terms of Britain’s exit from the EU that were scheduled for October 31, 2019. The UK and EU have now agreed to a further Brexit extension, with the UK due to the leave the EU on January 31, 2020.
What happens next?
On December 20, 2019, the UK Parliament voted in favour of the updated Withdrawal Agreement Bill which would enable the UK to formally leave the EU with a deal in place. Brexit will commence on January 31, 2020 and a transition period will come into effect until December 31, 2020. During the transition period, all import/export procedures and requirements will remain status quo. This will provide the UK and EU time to establish their long term procedures and to negotiate a new free trade agreement.
While the process of determining how the UK leaves the EU continues, FedEx will be following Brexit developments closely.
Here’s what the Brexit changes could mean for Canadian businesses and shippers in the event the UK leaves the EU with a no deal/withdrawal agreement in place:
|Imports to Canada||Exports to UK||Exports to EU
|Economic Operator Registration and Identification (EORI)||—||Exporters with EU EORI numbers will need to register for a UK EORI number to be the importer of record for shipments destined to the UK.
Register for a UK EORI number here.
|Canada-European Union Comprehensive Economic and Trade Agreement (CETA)||Preferential duty free treatment under CETA will no longer apply to UK origin goods.||Preferential duty free treatment under CETA will no longer apply to Canadian origin goods.||Preferential duty free treatment under CETA will continue to be applicable.|
New Duty Rates and Tariff Rate Quotas
|Most Favored Nation (MFN) tariff treatment will replace CETA and 70% of all commodities entering Canada from the UK will remain duty free. Current duty rates and tariff quotas under MFN are available in the 2019 CA Customs tariff on the CBSA website.||Temporary duty rates and tariff quotas will be in effect for up to 12 months post Brexit.
87% of all commodities into the UK will be duty free.
The remaining 13% of dutiable commodities and their applicable rates and quotas can be found on the UK customs website.
|Current duty rates and tariff quotas into the EU will remain status quo.|
|No change to current value of CAD $20.||De minimis of £15 will be eliminated.||No change to current values (country specific).|
Easement Period for Clearance/Customs Requirements
|—||The UK government is expected to continue to accept the current format and requirements for clearance/customs documentation for a period of up to 6 months post Brexit while a long-term approach, and process is finalized.||—|
FedEx is ready to help your business navigate the road to Brexit and beyond with its international shipping and customs expertise. Learn more at the UK FedEx website.