Bord Bia Meat Marketing Seminar, Naas 11 th January Carol Lynch Partner BDO Customs and Trade

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1 Bord Bia Meat Marketing Seminar, Naas 11 th January 2019 Carol Lynch Partner BDO Customs and Trade 1

2 BREXIT IMPACT FOR MEAT EXPORTERS Customs Duties Customs Controls Veterinary Checks Transit requirements 2

3 IMPACT OF UK LEAVING THE EU - CUSTOMS What is the EU Customs Union and Single Market? Common External Tariff Once goods are customs cleared then they can move freely throughout the EU Assumption of Free Circulation status 3

4 4 GOODS MOVEMENT

5 5 FUTURE GOODS MOVEMENT

6 NO DEAL BREXIT FALL-OUT FOR IRISH MEAT INDUSTRY Possible Outcomes UK full member of EU, SM and CU Currently frictionless between Member States of the EU. UK leaves EU as per Withdrawal Agreement Agreement would provide for no change to current relationship for a transition period of 2 years. UK crashes out of EU with no deal On 29 th March 2019 UK will become a 3 rd country. This means no customs checks and no tariffs applied. Ideal trading environment Intervening period would be used to negotiate FTA Imposition of Customs duties on commodities traded between EU27 and UK. Customs duties on agricultural produce at WTO rates are particularly penal. Customs Border Checks on departure (and arrival) BIPs and Vetinary Inspections on arrival in ROI (UK?) Health Certs on departure from ROI Import VAT where VAT applies 6

7 FREE TRADE AGREEMENTS SOFT BREXIT POST TRANSITION Preferential Trade Agreements provide reduced duty rates for originating goods What does originating mean Will be defined in FTA Typical Example For Meat Products a product qualifies as originating when the live animals, meat and/or edible offal used are wholly produced Wholly produced means that live animals are born and raised in the EU(UK) and or products are produced from Live Animals born and raised in the EU(UK) 7

8 FREE TRADE AGREEMENTS SOFT BREXIT POST TRANSITION Proof Of Origin status must be supplied to Customs on Import e.g. EUR1, Approved Exporter Status Import/Export Declarations required to be presented to Customs as normal 8

9 POTENTIAL TARIFF IMPACT RESULTING FROM HARD BREXIT In advance of leaving the Customs Union, HMRC have issued the British Customs Schedule. This sets out the rates of Customs Duties to be levied on imported products. This is effectively a cut and paste of the EU schedule (Commission Implementing Regulation (EU) 2018/1602 amending Annex I to Council Regulation (EEC) No 2658/87) Customs duties liability for Irish meat exporters to UK post hard Brexit Meat of bovine animals, fresh or chilled & frozen, classified under heading 0201 & 0202 respectively will attract a duty rate of 12.8% /100kg Meat of swine, fresh chilled or frozen, classified under heading 0203 will attract duties in the range 53.6 /100kg to 86.9 /100kg. Meat of sheep fresh chilled or frozen, classified under heading 0204 will attract duties in the range 12.8% /100kg to 12.8% /100kg Sausages and similar products of meat, meat offal or blood; food preparations based on these products classified under heading 1601 will attract duties in the range 15.4% to /100kg 9

10 EXCERPT FROM NEW BRITISH CUSTOMS SCHEDULE FOR MEAT OF BOVINE ANIMAL Note rates of duty quoted in. British schedule is effectively cut and paste from EU schedule. 10

11 11 EU IMPORT TARIFFS

12 OTHER CUSTOMS TRADE BARRIERS Even in the case of a soft Brexit Along with the tariff barriers, trade with UK will now carry a significant additional administrative workload post Brexit, e.g. Origin documentation Completion of SAD Export declaration upon product leaving EU/Ireland Import declaration upon product entering UK It is estimated that there will be a cost of approximately Euro/GBP with each lodged document. The goods being traded will need to be accurately classified for Customs Purposes. Misclassification of goods carries significant risk - post clearance Audits, Impact on AEO. 12

13 SUPPLYING THE EU MARKET EXPORT VIA UK LANDBRIDGE Thankfully the UK has signed up to the Common Transit Convention. This means that for goods leaving Ireland, which are being routed through the UK with final destination in EU no customs duties must be paid. However.. Requirement for Customs Transit declarations and Guarantees to be lodged with Customs Authorities for the suspended duties. Potential for delays as Transit declaration needs to be input prior to departure and accepted by Customs on arrival in the destination Member State. Goods must travel in sealed container and Customs need to confirm that the seal has not been broken. Union goods moving via a Common Transit Country (UK) are moved via the T2 procedure. 13

14 SUPPLYING THE EU MARKET TRANSPORT OF GOODS TO CONTINENTAL EU BY SHIPPING Both Irish and British newspapers have reported that new shipping routes will be developed between Ireland and France, Belgium and Netherlands. Direct shipping to France, Belgium and Netherlands may provide viable alternative to congested UK landbridge. 14

15 IRISH MEAT PRODUCERS Other non-tariff barriers veterinary checks 15

16 EU Import Requirements 24 Hours notice 100% Documentary Checks Must be presented at a Border Inspection Post (Dublin Port or Shannon Airport) for veterinary checks Must come from approved countries approved establishment Must be accompanied by appropriate Health Certificate(s) The animal product must be appropriately wrapped and labelled 16

17 UK UPDATES New UK only Traces System to be live from 29/03/2019 for NON-EU IMPORTS - should be live for testing. To ensure a smooth Transition - no change to current import controls or requirements for notifications of imports of live animals and animal products for imports direct from the EU Importers of high-risk food and feed must pre-notify the FSA electronically FSA working with DEFRA to establish when this will be introduced but this will not require Border Controls 17

18 UK UPDATES For an interim period, the UK would continue to recognise Transporter Authorisations, Certificates of Competence, Vehicle Approval Certificates and Journey Logs issued by other EU Member States. UK-issued documents would only be valid for use in the UK and not in any other EU member state. UK transporters wishing to transport live animals in the EU would need to appoint a representative within an EU member state and apply to their relevant government department to obtain a valid Transporter Authorisation, Certificate of Competence, Vehicle Approval Certificate and, where necessary, a Journey Log. 18

19 Responding to Brexit challenges SKILLS INSIGHTS Growing the success of Irish food & horticulture

20 Responding to Brexit challenges BUILDING DIFFERENTIATION, WINNING GROWTH Budget Head count Global Footprint Growing the success of Irish food & horticulture