brexit checklist

UK cross-border supply chain trade preparations: Brexit checklist

Brexit checklist for companies trading across UK borders who must prepare their supply chain and trade operation for customs processes by the end of the year.

The countdown is on: UK cross-border supply chains

On January 31, 2020, the UK has officially left the European Union. The Transition Period – or Implementation Period – is now in effect until December 31, 2020. After this date, cross-border supply chains and generally trade across UK borders will be subject to change. This does not leave much time to prepare. 

The urgency has now increased for business leaders to take action in order to: 

  • Mitigate organizational risks
  • Avoid cross-border supply chain delays
  • Minimize upcoming customs-related costs 

We recommend utmost priority for digitizing your cross-border trade, i.e. upgrading or implementing customs management systems. This also applies to outsourced services, because system-integrated customs broker collaboration delivers up to 50% cost savings. This is an important margin for cross-border supply chain trade operations – especially after the Brexit Transition Period.

Which customs management strategy is best for every individual company depends on the types of goods they trade across UK borders, applicable customs and transit procedures, and importantly, on the future transactional volumes of cross-border movements. 

Businesses that have not yet kicked off preparations can find a useful checklist below for cross-border supply chain Brexit preparations with key areas of consideration. And in our tool kit for traders, they can find additional guidance, official references, and solutions. 

AEB Brexit Tool Kit - Transition Period and next steps at a glance

Brexit executive cross-border supply chain checklist

Brexit cross-border supply chain checklist for executives: check one
Brexit cross-border supply chain checklist for executives: check one
Brexit cross-border supply chain checklist for executives: check one

Have you applied for funds from the UK government to prepare for customs procedures?

Government funds apply to training and IT improvements and the original 2019 application deadline has officially been extended. More information is available on the government website here.  

Brexit cross-border supply chain checklist for executives: check two
Brexit cross-border supply chain checklist for executives: check two
Brexit cross-border supply chain checklist for executives: check two

Did you identify all cross-border points in your supply chain from end to end and inform all involved parties?

This refers to all goods and services you are moving across UK borders that previously were subject to inner-EU trade rules and all involved parties from customers, suppliers, and internal teams, to distribution centers, logistics providers, and partners.

Brexit cross-border supply chain checklist for executives: check three
Brexit cross-border supply chain checklist for executives: check three
Brexit cross-border supply chain checklist for executives: check three

Do you have transparency over the full impact that implementing customs procedures for future UK cross-border trade will have on your supply chain?

It is important to consider inbound and outbound movements (import and export customs declaration procedures) as well as all applicable transport routes and modes of transport currently used.

Brexit cross-border supply chain checklist for executives: check four
Brexit cross-border supply chain checklist for executives: check four
Brexit cross-border supply chain checklist for executives: check four

Are you planning to implement new distribution strategies for relevant cross-border shipments to or from EU member states?

This refers to, for example, current strategies for consolidated deliveries versus direct deliveries. But also, to making use of special customs procedures to streamline supply chain operations while saving customs-related fees – including but not limited to transit procedures, inward- and outward processing, or customs warehousing (bonded-warehouse).

Brexit cross-border supply chain checklist for executives: check five
Brexit cross-border supply chain checklist for executives: check five
Brexit cross-border supply chain checklist for executives: check five

Have you completed your contract reviews for incoterm agreements? For example, do you currently ship on DDP (duty delivery paid) terms and plan to do so in the future?

It is crucial to discuss ownership of risks and costs in line with 2020 incoterms. This includes the matter of fiscal representation for customs clearances and supporting supply chain partners that are not set up for import/export yet in obtaining required EORI registrations. You can refer new starters to our free customs guide "Six Steps to Starting UK Customs Clearance".  

Brexit cross-border supply chain checklist for executives: check six
Brexit cross-border supply chain checklist for executives: check six
Brexit cross-border supply chain checklist for executives: check six

Are you currently trading dual-use goods or controlled items (including technology transfers) across UK borders under UK licences and plan to do so after the Brexit Transition Period?    

As of 11pm on December 31, 2020, EU sanctions will no longer apply in the UK and UK sanctions regimes will come into force under the Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act). Among other things, this will require the re-drafting of any sanctions clauses in all your applicable contracts and the adaptation of your export control compliance programs to include new frameworks.

Brexit cross-border supply chain checklist for executives: check seven
Brexit cross-border supply chain checklist for executives: check seven
Brexit cross-border supply chain checklist for executives: check seven

Did you identify all digital data requirements for trading under import and export rules and analysed your current IT capability to accommodate the new data transfer requirements? 

This includes, for example, customs tariff, landed costs, and export control data. It’s very important to also consider where these digital data sets need to be transferred to - back and forth systems along the supply chain. This typically includes customs authorities, government agencies, customs brokers, service providers, hauliers, port terminals, etc. but also internal systems used by involved business units in your organization.

Brexit cross-border supply chain checklist for executives: check eight
Brexit cross-border supply chain checklist for executives: check eight
Brexit cross-border supply chain checklist for executives: check eight

Have you decided on your customs management strategy and prepared for customs declarations with EU member states both in terms of staff training and system upgrades?

Keeping your teams informed and trained is key in successful change management. It’s equally important to ready all involved IT systems – and government funds are available to support you with both. If you already manage import and export procedures, rolling out new solutions for UK CHIEF/CDS filing may present an opportunity to streamline system integration levels and if you are starting out, it’s important to start the right way with flexible and integrated customs solutions.

Not sure which UK cross-border IT you need? Talk to us.