Economic Policy and Infrastructure

BREXIT: VDA-proposal for a simplified customs clearance model between the European Union and the United Kingdom under Self-assessment

The United Kingdom (UK) formally left the European Union (EU) as of 1 February 2020. However, until the end of this year, the existing regulations will remain in force. During this transition period, the 27 EU Member States and the UK intend to negotiate a new framework for their future relationship. Negotiations are currently in progress and should be concluded by 31 December 2020. If the negotiations fail, the UK will be granted the status of a third country. The VDA considers this to be a very ambitious timetable.  

Regardless of how the future relationship between the UK and the EU will be regulated, companies involved in cross-border trade in goods will have to carry out customs clearance and comply with customs declaration obligations. These changes in customs clearance bear high costs and time losses for companies in the automotive industry, especially in the event of an unregulated withdrawal of the UK. In that respect, all possibilities for administrative relief must be carefully examined and implemented.

As early as February 2018, the VDA proposed a simplified procedure for customs clearance in the case of BREXIT and put it up for discussion. The proposal is based on the principle of self-assessment, which guarantees the smooth movement of goods without additional administrative work for both, companies and the customs and tax authorities in the EU and the UK. This ensures that goods remain available to economic operators at all times – without interruption of the flow of goods – and, in particular, that supplies of production materials for production sites in the EU and the UK can be carried out without hindrance. Furthermore, the simplified customs clearance model can also help to implement necessary monitoring measures by the customs authorities in advance of the cross-border movement of goods.

Key message of the proposal:

  • The VDA-proposal provides an absolutely essential and practicable solution for goods processing at the border by means of a model under self-assessment.
  • The VDA-proposal largely maintains the status quo, is simple, applicable across industries and in line with existing regulations of the Union’s customs law.

 

Dr. Manuel Kallweit
Dr. Manuel Kallweit Leiter Abteilung Economic Intelligence & Volkswirtschaft

Tel: +49 30 897842-330 Fax: +49 30 897842-607
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