Since the start of the year, a raft of new requirements has made life increasingly difficult for UK businesses that trade with the European Union. On the surface, frictionless trade should have continued, but as the UK is no longer part of the EU Single Market and Customs Union, companies have been faced with an increased burden of bureaucracy.
In this two-part article, I highlight some of the problems that UK-based business leaders, suppliers and entrepreneurs face after the UK-EU’s new trading agreement. Despite the government’s pledge that the UK-EU trade deal would result in pain-free trade with the EU, problems have arisen.
Given the agreed zero tariff and zero quota regime, there have been widespread reports of disruption for UK companies that trade with the EU since the Brexit transition period ended.
Smaller to medium businesses seem to have been hit the hardest as they grapple with the new paperwork requirements and additional costs.
Border Control: This has been a major problem. Since 11 pm on December 31, some goods, like agricultural products, have to undergo checks at UK-EU borders.
This has led to supermarket shortages in Northern Ireland, border disruption for Scottish seafood exporters and difficulties for professional musicians trying to travel to the EU.
“Get one thing wrong in the reams of new paperwork and goods can be impounded or fines levied. If you are selling your goods in multiple European countries that is hours more work now needed to make sure they sail through borders’’, said Selwyn Stein, managing director of London-based VAT reclamation firm VAT IT.
For example, UK meat exporters warned the government recently that post-Brexit changes at the border caused disruption to meat shipments crossing the channel. Tonnes of produce worth hundreds of thousands of pounds coming from the UK had been confiscated at EU ports due to companies not filling out the right paperwork.
It resulted in tonnes of meat being thrown out at EU borders.
The new border checks and additional paperwork have caught many businesses by surprise.
This has led to some firms halting trade with the continent, such as luxury food store Fortnum & Mason, who stopped deliveries to Northern Ireland and countries in the European Union, while Debenhams shut its online business in Ireland. Debenhams have since been in liquidation.
“Businesses have some difficult decisions to make in the coming months, they must decide on where best to send their goods into Europe, through which countries and by which type of transport’’, Stein added.
Deliveries: This has been another problem. Mark Elward, chief commercial officer at Huboo, a Bristol-based tech-driven fulfilment provider, said the late nature of the Brexit deal gave e-commerce businesses little time to get their head around the many administrative changes needed to go on trading internationally.
Elward said that during the first week post-Brexit, over 1,000 parcels at Huboo were missing the vital new commodity code required for carriers to ship them.
“An issue which can be rectified, but goes to show how easily errors are made’’, he said. Moreover, so-called Economic Operator Registration and Identification (EORI) numbers are required for importing and exporting goods to and from the EU.
Elward explained that the commodity codes now required post-Brexit are more complex, with the UK using the standard global six-digit format, and not the 8-digit minimum required by the EU. “Get the code wrong, and the item won’t make it through customs and essentially won’t reach the end-user.
A nightmare for an e-commerce business who are shipping to consumers who, due to the ‘Amazon effect’, have high expectations around delivery timings’’, he said. (The writer is our foreign correspondent based in the UK)
Andy Jalil
andyjalil@aol.com
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