STATE OF PLAY

Informal UK-EU trade talks resumed this week in Brussels, with the two sides remaining far apart on the most controversial issues, namely those concerning the ‘level playing field’, with a focus on state aid, fisheries and the dispute resolution mechanism. The next (fifth) formal round of negotiations will take place in London next week.

 The UK new border procedures –

 The UK Government has published a new Border Operating Model, which sets out the “technical detail” on how the UK’s border with the European Union will work after the Brexit transition period ends on 31 December 2020. The Model confirms that the new border controls with the EU will be implemented in three stages from 31 December 2020 up until 1 July 2021. The Government also specified that there are “a number of actions traders need to take to prepare for the end of the transition period, including: identifying a customs intermediary; applying for a duty deferment account; preparing to pay or account for VAT on imported goods; and apply for a GB Economic Operator Registration and Identification (EORI) number.

In addition to the Border Operating Model, the Government has published a guide on How to import goods from the EU into GB from January 2021 and on How to export goods from GB into the EU from January 2021. The guides explain the different import and export procedures and declarations available to traders on the day after the transition period ends. HMRC reportedly plans to write to 12,000 high-value businesses that trade only with the EU to explain the new system and walk them through the steps they need to take by the end of the year.

Alongside the Border Operating Model, the Cabinet Office has announced that £705 million will be made available “for new infrastructure, jobs and technology to ensure GB border systems are fully operational… This will include £470 million to build infrastructure such as border control posts, and £235m for IT systems and around 500 more Border Force personnel to ensure our borders are safe and secure.” 

Estimates confirmed by government officials indicate that UK companies trading with Europe will be required to fill in 215m customs declarations, at a cost of £7bn per year.

In other news –

– The UK Government has launched a new website www.gov.uk/transition setting out the actions businesses and individuals need to take to prepare for the end of the transition period on 31 December 2020. The website is part of public information campaign – ‘The UK’s new start: let’s get going’ – which will run across the full range of communication channels, including TV advertising and radio, out of home, digital, print, and direct channels such as text messages and Webinars. The campaign will also see the launch of a field force team which will give one-to-one support in person or over the phone to businesses and their supply chains to minimise disruption to the movement of goods.

– Home Secretary Priti Patel has unveiled further details of the Government’s planned post Brexit, points-based immigration system. From January 2021, jobs offered to migrants will be required to be above a certain skill level. Migrants must be able to speak English and be paid either the general salary threshold of £25,600 or the going rate for the specific job, whichever is higher. A 130-page document has been released with the announcement and applications to sponsor migrants through the skilled worker route are now open.

OTHER KEY DEVELOPMENTS

 – A new poll by the Institute of Directors has found only a quarter of companies said their organisations were fully ready for the end of the Brexit transition period, while nearly half of the 978 company directors in the poll said they were not able to prepare, distracted by coronavirus and lacking clarity over what to prepare for.

– Manufacturing lobby group Make UK and the accountancy firm BDO have warned PM Boris Johnson that former “red wall” seats won by the Conservatives in last year’s election would be at most risk of severe economic damage from a ‘no-deal’ Brexit as traditional industrial heartlands had greater trade links with the EU than other places, exacerbating the damage to jobs and growth should talks fail.

– UK businesses have warned that the 10 “freeports” proposed by Chancellor Rishi Sunak, which would be tariff-free zones considered outside of a country for customs purposes, could drain investment from other parts of the country and attract money laundering. Further concerns were also raised by the British Ports Association, whose CEO Richard Ballantyne urged the Government to drop the 10-site cap and apply the scheme more broadly.

The Chancellor is expected to invite applications for ports to become Freeports in the autumn Budget.

– A 120-page report published by the think tank the Centre for Brexit Policy has raised concerns with the Withdrawal Agreement. It argues that key parts of the agreement – such as state aid laws, customs mechanisms in the Irish Sea, divorce payments and the role of the European Court of Justice (ECJ) – amount to a “poison pill” that could have “crippling” consequences for the UK. Several MPs have endorsed the report’s call for a new “sovereignty-compliant” agreement, containing provisions for an “invisible border” in the Irish Sea, and have threatened to resist the Prime Minister if he fails to address their concerns.

The new trade deals –

– As trade negotiations continue between the UK and Japan, it has emerged that Japan is reportedly seeking extra tariff cuts from the UK, above and beyond those in the EU-Japan trade deal. According to the timetable set out by Japan’s Chief Negotiator, Hiroshi Matsuura, there are two-and-a-half weeks remaining in the ongoing negotiations.

Many thanks for last weeks Brexit transition round-up compiled by public affairs and communications consultant Nicky Donnelly.