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Less than 17% of business preparing for Brexit
The latest HMG Brexit report, ‘Implications for Business and Trade of a No Deal Exit’, published this week confirms that only one in five companies trading solely with the EU, which should have registered for an Economic Operator Registration and Identification (EORI) registration number, have actually done so.
The UK Government has taken strategic policy decisions to minimise disruption should a no deal scenario arise, with unilateral action to maintain as much continuity as possible in the short term, irrespective of whether the EU reciprocated, for example EU hauliers would be able to use their licences in the UK.
Approximately 8 out of every 10 lorries in UK roads is an EU haulier, meaning that this unilateral action would mean that the vast majority of lorries operating in the UK would be able to continue doing so, whilst also having access to EU roads.
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Despite repeated communications from the Government and the freight sector, there is little evidence that businesses are preparing in earnest for a no deal scenario, and evidence indicates that readiness of small and medium-sized enterprises in particular is low.
Around 240,000 EU trading businesses will need to submit customs declarations post-Brexit, yet as of February 2019 there had only been 40,000 registrations for an EORI number.
There is capacity to sign up 11,000 businesses per day, and so this position could change rapidly with behaviour change from businesses.
In practice, the UK’s approach is based on, in the short-term, allowing hauliers to pass through the border without stopping, but they would be stopped if taking goods into France without the right paperwork. The lack of preparation for EU controls – of which this is an example – greatly increases the probability of disruption.
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There is a government sponsored website ‘Prepare for EU Exit’ which aims to support those who feel they should make arrangements, but there are clearly a large number of businesses who still are unaware of what they need to do, to continue to trade with the EU post-Brexit.
Although the Government has made progress in ensuring that additional controls at the UK border would not cause disruption, including phasing Entry Summary Declarations and Transitional Simplified Procedures, those imposed by Member States would be disruptive.
Third country rules applied by the EU, including France, would mean that no goods are allowed to leave the port until they have provided the correct paperwork and have been customs cleared (including any necessary checks at the port, for example on products of animal origin).
More significantly, Member States would hold any goods that are not correctly customs cleared, which would hold up all goods where trades are not prepared, expected to be a significant proportion in the early period after exit day.
The Government’s worst case planning assumption is that, as a result of French checks and lack of businesses readiness, the flow of goods through the Short Channel Crossings (Dover and Eurotunnel) could be very significantly reduced for months.
Obtaining an EORI is straightforward, so those businesses that trade with the EU and haven’t yet obtained an EORI need to do so now as the clock is ticking.
Click HERE to request your EORI number.