101 UK Brexit Notes

Connemara Programme October 16 2018 pg. 115  the UK intends to continue offering unilateral preferences to developing countries, and to seek to transition all EU Free Trade Agreements for day 1 in order to ensure continuity for both goods imported to the UK, and for UK exports. Maintaining these benefits is of clear importance to businesses, consumers and investors, and will ensure a smooth transition for users of these provisions as we leave the EU. Further information on preferential trade under the UK’s existing trade agreements will be captured in the Trade Agreement Continuity technical notice  the UK Trade Tariff, detailing the import duty rates and rules that will be applicable to each good, will be made available free on GOV.UK in the same way as now. Importers of goods into the UK will no longer use EU Tariff information published by the EU  the UK does not intend to immediately change the classification of goods in a “no deal” scenario. The UK does not plan any immediate deviation from the current commodity code list published in the UK Trade Tariff, which is currently applied by the EU, except where necessary to maintain alignment with international standards, or for trade remedies purposes. What you would need to do Anyone importing goods into the UK from the EU, or exporting goods to the EU from the UK, will have to comply with customs procedures, where these were not previously necessary. As set out above, this includes the potential payment of duty on UK-EU trade. Establishing A UK Trade Tariff The Taxation (Cross-Border Trade) Bill provides the powers for HM Treasury to establish a new UK trade tariff. The importer (or their agent) must use the guidance in the tariff to help decide the correct classification of their goods (although it should be noted that the guidance is not the legal text of the tariff). This will require knowledge of the item being classified, as well as its constituent parts: what it is made of, and the purpose for which it will be used. It will also be necessary to know where it originates from. The process of classification will result in a numeric commodity code. The commodity codes will be listed in the Tariff with the rate of import duty applicable to the goods falling within those codes (duty rates are shown either by formula or percentage of the customs value of the goods). The Tariff will contain rules for determining the amount of import duty applicable to those goods based on their description (the commodity code) and country of origin. The Tariff will also set out import procedures such as how the value of a good is calculated, and which forms, codes, and procedures are to be used. The UK Trade Tariff will replace the EU CCT for imports to the UK. HMRC already publishe s tariff data online for use by UK traders with third countries . Those currently importing goods from third countries into the UK will be familiar with this system. UK Commodity Codes Commodity codes in the EU are 10 digits long for imports, and 8 digits long for exports. Commodity codes are standardised under the World Customs Organisation’s Harmonised System for the first 6 digits of the code. The UK is, and will remain, a participating country in this system. The Harmonised System allows additional digits to be set by Customs authorities. Tariff codes beyond 10 digits are used for some food products, to identify sugar, starch, and fat content, and for trade defence measures. The UK does not intend to immediately change any commodity codes, but the rules will be set out in new UK regulations rather than EU ones. Classification - an example I am seeking the commodity code for a grand piano. Searching for “grand piano” on the UK Trade tariff identifies the commodity code 9201200000 for imports (92012000 for exports). The tariff has a hierarchical structure. The first two digits (92) are the “chapter”, and refers to Musical instruments; parts and accessories of such articles. The next two digits (01) are the “heading”, and identify pianos, including automatic pianos; harpsichords and other keyboard stringed instruments. The following two digits (20) are the “sub-heading”, and identify a grand piano. Up to this level, the same digits are used internationally as part of the Harmonised System. Because no further distinction is required, the next two pairs of digits are each 00. For a more detailed worked example, please see the classification section o n the uk trade info website. Northern Irish businesses importing and exporting to Ireland The UK government is clear that in this scenario we must respect our unique relationship with Ireland, with whom we share a land border and who are co-signatories of the Belfast Agreement. The UK government has consistently placed upholding the Agreement and its successors at the heart of our approach. It enshrines the consent principle on which Northern Ireland’s constitutional status rests. We recognise the basis it has provided for the deep economic and social cooperation on the island of Ireland. This includes North-South cooperation between Northern Ireland and Ireland, which we’re committed to protecting in line with the letter and spirit of Strand two of the Agreement. The Irish government have indicated they would need to discuss arrangements in the event of no deal with the European Commission and EU member states. The UK would stand ready in this scenario to engage constructively to meet our commitments and act in the best interests of the people of Northern Ireland, recognising the very significant challenges that the lack of a UK-EU legal agreement would pose in this unique and highly sensitive context. It remains, though, the responsibility of the UK government, as the sovereign government in Northern Ireland, to continue preparations for the full range of potential outcomes, including no deal. As we do, and as decisions are made, we’ll take full account of the unique circumstances of Northern Ireland.