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'Tariffs may apply if goods don't undergo sufficient processing in UK,' firms told in IOE and IT webinar

27 January, 2021
Posted by: William Barns-Graham
Chartered Institute News

This article was published before we became the Chartered Institute of Export & International Trade on 10 July 2024, and this is reflected in references to our old brand and name. For more information about us becoming Chartered, visit our dedicated webpage on the change here.

UK businesses have been told that trade with the EU will be more “complex” as a result of origin rules agreed to in the UK-EU trade deal.

Speaking on a webinar attended by over 2,000 businesses yesterday (26 January), IOE&IT Academy director Kevin Shakespeare said that the chapter on ‘Rules of Origin’ posed “new challenges” to firms that trade between the UK and EU.

Confusion

There have been several reports of confusion about the new rules following the implementation of the trade deal at the start of 2021 – including the case of Marks and Spencer’s Percy Pigs sweets.

Over half (60%) of the companies attending the webinar said they were not confident in their understanding of the new rules in a live poll.

Re-exports complication

On the webinar Shakespeare said that there will be more complexity for companies re-exporting goods than for those importing them for distribution within the UK.

“Where goods are wholly obtained in the UK things will be more straightforward,” he said. “For more complex elements – such as goods entering Great Britain from the EU before then being re-exported back to the EU – you have an element of complexity.”

roo poll

Percy Pigs

Shakespeare said that under the rules, goods shipped from the UK to the EU “must undergo sufficient processing to confer UK origin” and if there is “insufficient processing, tariffs will apply”.

With the example of Percy Pigs, tariffs became payable when the sweets were exported from the UK to Ireland because there had been no significant processing – edits which would change the nature of the goods being moved – to enable it to be classed as having come from the UK.

Slides

During the webinar, Shakespeare discussed several complicated areas in the trade deal including re-exports. He also gave advice for how companies could use customs and trade procedures such as customs warehousing to maintain zero tariff trade with the EU.

You can download a copy of the slides he presented here and for more support on ensuring tariff-free trade with the EU, Shakespeare suggested the following IOE&IT support: