case studies details | FPC Brexit Briefing Report
FPC Brexit Briefing Report
06 Mar 2019
The FPC held a ‘Brexit Briefing’ session on 28th February to help fresh produce companies to prepare their business for 29th March, with a particular focus on a potential ‘no deal’ scenario. Speakers from Government departments and agencies were invited to provide practical guidance on food production after Brexit and importing from and exporting to the EU. Obviously negotiations for future trading are still ongoing, but this event gave delegates an opportunity to raise any concerns and find out the latest position.
Importing from the EU
The day began with an update by Claire Wilson from HMRC on importing from the EU and the new process if there’s ‘no deal’. She stressed that preparations were well underway for ensuring a fully functioning border from 29th March with a customs system that is closely aligned to importing from non-EU countries. There will be new declarations, but these won’t need to be submitted on imports for six months. Businesses will need to complete import declarations for customs purposes, lodging them electronically in advance. There is expected to be a five-fold increase in customs declarations, so businesses need to either have the right software to manage this or appoint an intermediary. The HMRC will shortly be launching a ‘Roll On Roll Off’ (RoRo) toolkit.
In terms of exporting, the UK has negotiated to remain in the Common Transit Convention (CTC), however businesses will need to make their own declarations and the HMRC recommendation is to do this via a third party.
The key immediate actions suggested by HMRC are:
1. Apply for EORI
2. Talk to your existing customs agent or appoint one
3. Keep an eye on the .gov.uk website for further ‘no deal’ guidance where you can register for email updates or watch webinars on key issues.
Richard McIntosh from Defra talked about importing and exporting plants and the plant health requirements after 29th March. As there will be no change to biosecurity risks, there is no immediate need to change the process. The focus is on products covered by the plant passport scheme, which will need phytosanitary certificates. Importers in England and Wales need to register on the PEACH system for logging pre-arrival notification and uploading phytosanitary certificates. For moving plants and plant products within the UK, the existing plant passport scheme will no longer be available but a new replica scheme will be introduced immediately and existing memberships will be carried over.
Katherine Richards from Defra then talked about potential changes in marketing standards requirements for fruit and veg. Currently products do not require a certificate of conformity and, in the event of a ‘no deal’ situation, there will be no change to this on day one. Importers will not be required to apply for a certificate of conformity, however the Horticultural Marketing Inspectorate (HMI) will be carrying out some internal checks. In terms of exports to the EU, additional preparations will be required and companies will need to apply for a UK certificate of conformity on the PEACH system. The recommendation was to work with EU importers to seek further guidance and check the .gov.uk website for a full briefing.
Importing from non-EU countries
Charlotte Hill from Defra presented on importing from non-EU countries. After 29th March the EU will no longer carry out plant health checks on our behalf if products come into the UK via the EU. Checks will need to be made inland on arrival into the UK at ‘Places of First Arrival’ (PoFA). These are authorised premises that have to meet certain standards, and could be your own premises or a shared facility. Again the .gov.uk website will be updated with guidance for importing and exporting plants and plant products if there’s no withdrawal deal.
Gary Welsh, Head of Food Imports and Exports Strategy for the FSA, is responsible for the safety of food for UK consumers. He stated that on day one there would be little in the way of change for fresh produce businesses. The only change is in how they determine the risk. The TRACES system that is currently used is being replaced, but the information you input will still be the same. From June 2019, any high-risk goods imported from the EU will be pre-notified to the FSA, but there are not currently any high-risk goods. Goods coming through the EU to arrive in the UK will be required to be pre-notified. If they have been checked in the EU, the UK will continue to align with those checks and accept them as being safe, however proof of checks will be required.
Not surprisingly, a lot of questions were asked in the Q&A session with these speakers:
- Further clarity was requested on which products require a phytosanitary certificate. Products affected are those currently managed by plant passport.
- A delegate raised the scenario of importing from non-EU countries to then export to EU countries. Some businesses in the UK import and export in a more complex way than may have been perceived, so this has been logged as a challenge requiring urgent guidance.
- Similarly, Dutch lorries currently enter the UK to sell cut flowers directly to small businesses and it is unclear how this will be affected, creating a potential challenge to UK wholesalers.
- Smaller companies import goods as part of a group and clarity was required as to whether each individual wholesaler would need to make a declaration.
James Kane from Defra was then asked about future tariffs. Despite final decisions not yet being taken, he stressed that the UK will be able to charge the tariff it prefers (subject to WTO rules) and will be resuming its independent seat on the WTO. Maximum tariffs have already been set, and these are available online, however it is important to note that these tariffs can be lower and preferential tariffs can be offered, for example to partner countries or developing countries. If there is a Brexit deal on 29th March, market access will remain the same throughout the implementation period which runs until 31st December 2020. In the event of a ‘no deal’ scenario, an independent tariff policy will apply from 29th March for goods traded between the UK and EU. This will include the same requirements as third country goods, including payment of duty, and rates are available on the Commission website.
In terms of EU free trade agreements, there are currently around 40 free trade agreements covering over 70 countries. These will no longer be available after 29th March, however work is taking place to try to replicate these agreements or negotiate replacements. Progress can be tracked here.
Kathleen Kelliher from Defra gave an update on Organic Certification. The current situation is that the EU market will be closed to UK organic marked produce in the event of a ‘no deal’. UK companies will not be able to export organic produce until this is resolved, which presents a fundamental risk to businesses. One example given was that between 20% and 30% of organic milk produced in the UK is currently exported to the EU, so this will have a huge impact on both sides.
Exporting products to the EU
Kevin Kitching from Defra talked more about exporting products to the EU, explaining that third country rules will apply on all plants for planting, wood, wood products or bark and wood packaging material. Phytosanitary certificates will be required and should be applied for before exporting. Agreements are being negotiated, but the EU is currently unable to commit to anything. Any concerns should be raised via the FPC.
Managing and maintaining your future workforce
Matthew Porter from the Home Office and Sian Thomas from the FPC outlined expected changes to managing and maintaining the future workforce. The EU Settlement Scheme protects EU workers in our industry and, in the event of no deal, they will be able to stay in the UK with the same level of rights as UK nationals. The Prime Minister announced in January that this scheme would be free. The Home Office has developed a toolkit for employers, including videos and factsheets.
A new immigration scheme will start in 2021 and there is no need for EU citizens to do anything for this until the end of 2020. The key principles of future skills-based immigration are that 1.) free movement is ending and permission will be required to stay in the UK and 2.) the system will be based on talent and skills, not nationality.
Sian gave details of a seasonal worker pilot scheme, which starts in March and runs for two years. It is the only scheme of its kind for our sector and is not another SAWS scheme. There are two providers – Concordia and Proforce – with a cap of 2,500 workers per year from non-EU countries. You can read more on longer term plans in the white paper on the UK’s future immigration policy and by keeping up with the Keep Britain at #FullStrength campaign.
Claire Dalton of Defra talked about food labelling in a ‘no deal’ scenario. What needs to be included on food labels will change for some food and drink products on 29th March. The Government is aiming to have a transition period of 21 months for labelling changes for goods produced in or imported to the UK. In terms of exporting to the EU, however, the UK has no control over how labelling changes will be enforced outside of the UK. Changes may be required sooner and you are advised to seek advice on this from your exporter.
One immediate change is that the Country of Origin must not be labelled as EU origin or use the EU emblem. For Geographical Indicators, in the event of a ‘no deal’, UK Geographical Indicators will be set up on day one to protect legal speciality food. Identification of Products of Animal Origin (POAO) will also need to change. The key message here is that food and drink labelling will change when the UK leaves the EU.