Snapshot of key trade law considerations arising out of Brexit Hogan Lovells International Trade Team 8 April 2019 Political developments with respect to Brexit have been evolving swiftly in the past few weeks. The initial deadline of 29 March 2019 for the UK to leave the EU was first deferred to 12 April 2019 in light of a lack of majority in the UK Parliament to approve the EU-UK withdrawal agreement and may be further delayed following the European Council Summit on 11 April 2019. Whilst the political situation is evolving, the possibility of a no-deal Brexit remains high. This update addresses the legal and practical consequences of an extension of the Article 50 TEU process, the withdrawal agreement, and a potential no-deal Brexit on the operations of businesses trading in and/or out of the UK. 1. Τhe extension of the Article 50 TEU process The UK has just requested another extension of the Article 50 TEU process until 30 June 2019. If accepted by the EU, the extension of the Article 50 TEU process would result in the UK remaining an EU Member State for the extended period of time that the EU and the UK would agree on. During that period, EU law would continue to apply to the UK as to any other EU Member State and the UK would therefore continue to be bound by the EU common commercial policy and rules vis-a-vis imports and exports. The request for an extension provides for an option for the UK to withdraw from the EU before 30 June if the UK Parliament approves the Withdrawal Agreement. 2. The withdrawal agreement The withdrawal agreement is meant to ensure the "orderly withdrawal" of the UK and set the foundations of its future relationship with the EU. To this end, it provides for a transition period (currently) extending to 31 December 2020 which can be prolonged once by up to two years. During the transition period, the withdrawal agreement provides that the UK would remain in the EU customs union and single market and will therefore continue to apply EU law, which means that the UK would continue to be bound by the EU common commercial policy and rules vis-a-vis imports and exports. The UK would however be allowed to negotiate Free Trade Agreements ("FTAs") with other countries provided that such agreements do not enter into force before the end of the transition period. We note that – to date and therefore before the start of the transition period – the UK has already negotiated and concluded FTAs with a number of third countries (see below section on FTAs). After the transition period, the withdrawal agreement provides that: (1) goods that have already been placed on the EU/UK markets at the end of the transition period will continue to move freely between the EU and the UK; and (2) goods that are moving between the EU and the UK on the date of the end of the transition period will be allowed to continue their journey without being subject to additional customs procedures/product-specific requirements (with the potential exception of live animals and animal products which may be subject to applicable EU/UK sanitary controls at the border regardless of whether they are placed on the market before the end of the transition period). Both the EU and the UK expect that they will have reached an agreement on further transitional measures by the time the transition period ends. A political declaration adopted by the EU Heads of State on 25 November 2018 and initially presented together with the withdrawal agreement aims to set out the framework of the future EUUK trade relationship. The current political declaration envisions that the EU and the UK would Snapshot of key trade law considerations arising out of Brexit have an "ambitious, broad, deep and flexible partnership across trade and economic cooperation" and other areas. Thus far, such partnership has been advocated on the basis of a FTA. 3. Hard Brexit In the event that the withdrawal agreement is not approved by the end of the extension period, the UK will leave the EU without a deal. This section addresses the impact of a no-deal Brexit on: (1) UK/EU customs tariffs; (2) UK/EU customs processes; (3) UK trade defence measures; (4) UK/EU FTAs; (5) EU/UK export controls; (6) UK/EU economic sanctions; (7) the NI Plan and (7) placement of CE marked products on the UK/EU markets. 3.1 Customs tariffs and duties (a) In the UK The UK has announced that it intends to replicate – so far as possible – the EU's external tariffs.1 It has, on that basis, submitted its proposed future tariffs on goods to its WTO partners on 7 December 2018. These future tariffs remain to be approved by the UK's WTO partners. In the meantime, the UK designed a temporary tariff regime that would apply as from the no-deal Brexit date for a period of 12 months.2 This regime is aimed at minimising costs to businesses and consumers while protecting the UK's most vulnerable industries. It would allow 87% of total imports to the UK to be eligible for duty-free access. Tariffs would still apply for 13% of goods imported into the UK, including: (1) agricultural products such as beef, lamb, pork, poultry and some dairy; (2) finished automotive vehicles; (3) aluminium foil; (4) fertiliser; (5) textile and clothing; or (6) tyres and wheels. These tariffs would apply to imports from all third countries with the exception of those countries with which the UK has concluded a separate FTA (see below section on FTAs) as well as around 70 developing countries to which the UK intends to afford unilateral preferential market access (i.e., the developing countries currently covered by the EU General Scheme of Preferences). The UK has published non-preferential product-specific rules of origin on 14 March 2019 to determine the origin of imports not covered by an FTA/a unilateral preferential market access scheme.3 (b) In the EU The UK's withdrawal from the EU will not affect the EU's Common Commercial Policy and external tariffs vis-a-vis its trade partners (whether they benefit from a FTA with the EU or not). However, the UK's withdrawal may have an impact on the EU's Tariff Rate Quotas (TRQs), which are currently based on EU and UK consumption data. The EU has adopted legislation for the apportionment of TRQs between the EU and the UK in case of a no-deal Brexit,4 which several WTO Members have objected to. 1 2 See UK Government, Guidance, Check temporary rates of customs duty (tariffs) on imports after EU Exit, available at: https://www.gov.uk/guidance/check-temporary-rates-of-customs-duty-on-imports-after-eu-exit. 3 See UK Government Guidance, The Customs (Origin of Chargeable Goods) (EU Exit) Regulations 2019, available at: https://www.gov.uk/government/publications/the-customs-origin-of-chargeable-goods-eu-exit-regulations-2019. 4 Regulation (EU) 2019/216 of the European Parliament and of the Council of 30 January 2019 on the apportionment of tariff rate quotas included in the WTO schedule of the Union following the withdrawal of the United Kingdom from the Union, and 3.2 Customs processes and controls (a) In the UK The UK has put in place customs facilitation measures for goods coming from the EU in case of a no-deal Brexit: the Transitional Simplified Procedures ("TSP"), the exemption of Entry Summary Declarations ("ESD").5 These measures would not apply to goods traded via the land border between Northern Ireland and Ireland, which would be subject to a specific framework to avoid a hard border between Northern Ireland and the Republic of Ireland ("NI Plan"). (i) The Transitional Simplified Procedures On 5 February 2019, the UK announced the introduction of TSP, which are a set of facilitation measures available to imports from the EU27. The TSP will defer the filing of customs declarations and the payment of duties to 4 October 2019. Under current EU customs rules, importers (or their representatives) need to submit an import declaration. By means of the import declaration, importers provide information that allows the determination of the duties and taxes payable. Goods presented for customs clearance are not released until the import declaration is accepted by the customs authorities and the duties are paid. The new TSP will simplify these obligations. The TSP will apply differently to controlled and standard goods. The UK published a list of goods that would be considered controlled for the purposes of using the TSP including, inter alia, controlled drugs, drug precursors and toxic chemicals.6 Controlled goods: importers will be required to send a simplified frontier declaration before importing the goods. The controlled goods imported under TSP will need to be accompanied by the appropriate licence. Standard goods: at the time the goods cross the border, importers will not need to give a full declaration. Rather, they will need to make a simplified customs declaration within their commercial records accounting for some basic information about the import such as the date and time the goods arrived in the UK; a description of the goods and the commodity code and quantity imported; the customs value and purchase/sales invoice numbers. For both controlled and standard goods, the importer would submit a supplementary declaration at the start of the month following the importation to complete the declaration process. Any duties payable will be direct debited by the UK customs authorities ("HMRC") on the 15th day of the month following the importation. In order to use the TSP, UK importers need to register online with HMRC. (ii) The exemption of Entry Summary Declarations On 19 February 2019, the UK announced that the requirement to submit an ESD would be waived for a six months period post Brexit (in case of a no-deal Brexit).7 Under current EU customs rules, all goods transported to the EU need to be declared by the carrier by means of an ESD. This means amending Council Regulation (EC) No 32/2000, OJ L 38, 8.2.2019, available at: https://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=uriserv:OJ.L_.2019.038.01.0001.01.ENG&toc=OJ:L:2019:038:FULL. 5 See UK Government Guidance, Register for simplified import procedures if the UK leaves the UK without a deal, available at: https://www.gov.uk/guidance/register-for-simplified-import-procedures-if-the-uk-leaves-the-eu-without-a-deal. 6 https://www.gov.uk/guidance/list-of-controlled-goods-for-transitional-simplified-procedures 7 See UK Government announcement, HMRC outlines phased approach for Entry Summary Declarations, available at: https://www.gov.uk/government/news/hmrc-outlines-phased-approach-for-entry-summary-declarations. that, for goods transported to a port in the English Channel, the carrier would need to submit an electronic ESD at least 2 hours before arrival. The ESD provides details relevant for security and safety risk analysis, such as the number of items, consignor, consignee and weight of the goods. After the six-month transitional period, carriers will be required to submit an ESD prior to the arrival of the goods to the UK. (b) In the EU In preparation for the reintroduction of border checks on trade with the UK, EU Member States are announcing different customs processes to facilitate border controls in case of a no-deal Brexit. For instance, France announced that it would introduce a smart border system to streamline customs controls on trade between France and the UK. The smart border system will allow importers and exporters to complete relevant customs declaration online. Upon arrival at the border, the lorry carrying the goods will be able to reference the customs declarations of the transported goods by means of a bar code, thus reducing formalities at the border. For goods imported into France from the UK, French customs authorities will: (1) ask the declarant to validate its declaration; and (2) conduct a risk-based assessment on the need to inspect the goods while the lorry is crossing the Eurotunnel or the English Channel. If the declaration has been accepted electronically and the goods have not been selected for inspection, the lorry will be directed to the green line for a speedy release. If the goods are selected for inspection or if they are subject to SPS controls (applicable to agricultural products), the lorry will be directed to the orange line for further checks before release. The smart border system will not reduce the customs formalities required for trade with the UK, which will be similar to those applicable to other non-EU countries in case of a no-deal Brexit. It will however reduce formalities at the French border, which could potentially reduce logistical bottlenecks at the border in case of a no-deal Brexit. Other Member States have adopted contingency measures to further support expected increased controls at their border. For example, Ireland has been working towards enhancing its information and communication technology ("ICT") systems and infrastructure across different departments, as well as enhancing its port infrastructure to include inspection bays, parking space for trucks, dedicated Border Control Post for live animals, additional office accommodation and new traffic management systems.8 Similarly, the Dutch Government has announced measures such as increased staff of the Customs Administration, preparation of IT systems and increase in resources required for checks, temporary reallocation of current resources and gradual build-up of risk-based checks on goods transport between the UK and the Netherlands.9 3.3 UK trade defence measures The UK has announced that its post-Brexit trade defence legislation will largely mirror that of the EU to the extent that it will include: (1) anti-circumvention rules (i.e., rules aimed at tackling circumvention of existing trade defence measures); (2) a rule similar to the EU lesser duty rule (i.e., a rule that allows the EU authorities to base the anti-dumping duty rate on the injury margin rather than on the dumping margin); and (3) a test similar to the EU interest test (i.e., an economic 8 https://merrionstreet.ie/MerrionStreet/en/News-Room/Releases/No_Deal_Brexit_Contingency_Plan.pdf. 9 https://www.government.nl/topics/brexit/documents/publications/2019/03/29/no-deal-brexit-impact-on-border-control. test that allows the EU authorities not to impose trade defence measures where such measures would not be in the EU's overall interest).10 The UK Customs Bill presented to the UK Parliament on 20 November 2017 empowers the UK's future Trade Remedies Authority ("TRA") to conduct trade defence investigations and recommend the introduction of trade defence measures to the UK Secretary of State. That said, the UK TRA is, to date, not yet operational and it is unclear when it will be ready to administer the UK's future trade defence regime. In the meantime, the UK has established a Trade Remedies Investigations Directorate ("TRID") within the UK's Department of International Trade which will administer trade remedies functions until the TRA is legally established and ready to initiate trade defence investigations. The UK has also announced that it would seek to maintain 43 EU anti-dumping and anti-subsidy measures where UK business supported the measures and where UK business produce more than 1% market share of those particular products sold in the EU.11 These EU anti-dumping and antisubsidy measures, inter alia, include: (1) aluminium road wheels from China; (2) biodiesel from the U.S.; (3) bioethanol from the U.S.; (4) ceramic tiles from China; (5) rebar from China; and (6) tubes and pipes of iron or non-alloy steel from Russia. Whether the UK is legally allowed to maintain these EU anti-dumping and anti-subsidy measures without having conducted a full investigation establishing injurious dumping and/or subsidisation raises questions under WTO law. WTO law requires that anti-dumping and anti-subsidy measures be imposed only where the investigating WTO member has been able to establish, through a dedicated investigation, the existence of injurious dumping or injurious subsidisation with regard to a specific domestic industry and a specific imported product. In the absence of such investigations and resulting findings, WTO members are not allowed to impose anti-dumping and anti-subsidy measures. We note that the aforementioned 43 anti-dumping and anti-subsidy measures that the UK seeks to maintain have been imposed following findings of injurious dumping or injurious subsidisation for the whole EU market and not for the sole UK market. A parallel can nonetheless be drawn with the way the EU has extended the application of EU trade defence measures to new Member States in 2004, 2007 and 2018 by merely offering the possibility for exporting producers concerned by these measures to request interim review thereof in certain circumstances (i.e., without automatically conducting new anti-dumping and anti-subsidy investigations). The UK has not yet formally confirmed whether it would seek to maintain the EU current safeguard measures on steel products or the EU current retaliatory tariffs against certain U.S. products (e.g., bourbon, motorcycle, blue jeans). We however understand that UK Cabinet members have informally indicated that the UK intended to maintain the definitive EU safeguard measures on steel products introduced in February 2019. 10 See UK Government Guidance, Trade remedies: investigating dumped or subsidised goods, available at: https://www.gov.uk/guidance/trade-remedies-investigating-dumped-or-subsidised-goods. 11 See UK Government consultation outcome, Final findings of the call for evidence into UK interest in existing EU trade remedy measures, available at: https://www.gov.uk/government/consultations/call-for-evidence-to-identify-uk-interest-in-existingeu-trade-remedy-measures/outcome/final-findings-of-the-call-for-evidence-into-uk-interest-in-existing-eu-trade-remedymeasures. 3.4 Negotiation of FTAs (a) In the UK The UK has concluded FTAs with Switzerland, Chile, the Faroe Islands, Eastern and Southern Africa (the "ESA bloc," covering Madagascar, Mauritius, Seychelles and Zimbabwe), Israel, the Palestinian Authority and the Pacific States (covering Papua New Guinea and Fiji).12 In case of a no-deal Brexit, other EU FTAs, such as the EU-South Korea FTA, the EU-Japan Economic Partnership Agreement or the EU-Canada Comprehensive Economic and Trade Agreement will cease to apply to the UK. As a result, trade between the UK and those countries will be based on "WTO terms." The newly-concluded UK FTAs largely mirror (and often refer) to the EU FTAs with each of the relevant third countries. One exception concerns the rules of origin in the UK FTAs, which appear to set out a pragmatic strategy aimed at allowing UK manufacturers to "cumulate" the origin of their goods with that of EU27 inputs. For example, the rules of origin of the UK-Chile FTA allow UK manufacturers to count EU27 inputs as UK origin to meet the UK content requirement granting preferential duty access to the Chilean market. This cumulation of origin would allow UK manufacturers to continue relying on EU27 inputs in their production for export to Chile (but would not allow EU27 manufacturers to continue relying on UK inputs in their production for export to Chine under the EU-Chile FTA). As this cumulation would only be granted to EU27 inputs, there are concerns as to whether this type of cumulation would be incompatible with WTO law. WTO law requires that rules of origin in an FTA do no favour imports from one (non-party to the FTA) WTO member over another. This is precisely what the cumulation rules of the UK-Chile FTA would appear to do by promoting the continued reliance of EU27 inputs in UK supply chains. Additionally, the UK signed Mutual Recognition Agreements with the United States of America, Australia and New Zealand,13 which set out the rules for the recognition of regulatory requirements such as conformity assessment results. (b) In the EU The EU existing FTAs with third countries will continue to apply to the trading relations between the EU and its partners following the withdrawal of the UK. It cannot be excluded that the EU's FTA partners may request the re-negotiation of these FTAs to reflect and take due account of the UK's withdrawal from the EU. 3.5 Export controls licenses (a) In the UK The UK Export Control Joint Unit ("ECJU") confirmed that any post-Brexit UK export control regime would (very) closely resemble that of the EU as set out in the EU dual-use Regulation.14 12 See UK Government Guidance, Signed UK trade agreements transitioned from the EU, available at: https://www.gov.uk/guidance/signed-uk-trade-agreements-transitioned-from-the-eu. 13 Ibid. 14 See UK Government Guidance, Exporting controlled goods after EU Exit, available at: https://www.gov.uk/guidance/exporting-controlled-goods-after-eu-exit. This means that the overall UK framework of export controls should remain pretty much unaltered, with the exception of certain licensing requirements: Export of dual-use items from the UK to the EU (and vice-versa) would require a licence (in the same way as export of dual-use items from the UK to non-EU Member States currently requires a licence). The ECJU issued a general licence on 1 February 2019 authorising export of dual-use items from the UK to the EU should the UK leave the EU without a deal on Brexit date. It covers all dual-use items included in Annex I to the EU dual-use Regulation with the exception of those also included in Annex IV to the EU dual-use Regulation.15 (b) In the EU Similarly, the EU has adopted an amendment to the EU dual-use Regulation that results in including the UK in the list of countries to which EU operators may export dual-use items under the EU General Export Authorisation No EU001. This licence covers all dual-use items included in Annex I to the EU dual-use Regulation with the exception of those also included in Annex IIg to the EU dual-use Regulation. The amendment to the EU dual-use Regulation entered into force on 28 March 2019 and will become applicable from the day following that on which the UK leaves the EU without a deal (it will not become applicable if the withdrawal agreement enters into force).16 3.6 Economic sanctions (a) In the UK The UK confirmed that it will continue to implement UN economic sanctions in UK domestic law after it leaves the EU. It also indicated that it would seek to carry over all current EU economic sanctions in case of a no-deal Brexit. The UK is implementing UK sanctions regimes through new legislation, in the form of regulations, made under the Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act). The Act provides the legal basis for the UK to impose, update and lift sanctions after leaving the EU. To do so, the UK has already adopted several regulations to make sure that sanctions measures with regards to the following programmes currently targeted by EU economic sanctions will continue to apply in the UK in case of a no-deal Brexit: Burma, Belarus, Chemical Weapons, Counter-Terrorism, Counter-Terrorism (International), Democratic People’s Republic of Korea, Democratic Republic of the Congo, Guinea-Bissau, Iran (Human Rights), Iran (Nuclear), ISIL (Da’esh) and Al-Qaida, South Sudan, Syria, Venezuela, Zimbabwe. 17 The UK has also indicated that, once it leaves the EU, and in addition to implementing UN economic sanctions and carrying over existing EU economic sanctions, it would assess whether it is in the UK interest to introduce other economic sanctions against additional third countries. 15 https://www.gov.uk/government/publications/open-general-export-licence-export-of-dual-use-items-to-eu-member-states. 16 Regulation (EU) 2019/496 of the European Parliament and of the Council of 25 March 2019 amending Council Regulation (EC) No 428/2009 by granting a Union general export authorisation for the export of certain dual-use items from the Union to the United Kingdom, OJ L 85l, 27.3.2019, available at: https://eur-lex.europa.eu/legalcontent/EN/TXT/?qid=1553869094591&uri=CELEX:32019R0496. 17 See UK Government collection, UK sanctions regimes if there is no Brexit deal, available at: https://www.gov.uk/government/collections/uk-sanctions-regimes-if-theres-no-brexit-deal. (b) In the EU In principle, the UK's withdrawal from the EU would not have an impact on the EU's Common Foreign and Security Policy and the existing and future EU sanctions regimes. The question remains whether the EU's sanctions policy approach could be altered, given that the UK is one of the major forces behind the EU's sanctions policy. However, we would not foresee any major changes, as sanctions measures are typically based on the UN Security Council resolutions or the EU's external policy and objectives. Enforcement of EU sanctions is done at Member State level on the basis of national legislation. 3.7 The NI Plan On 13 March 2019, the UK announced a temporary plan to avoid a hard border between Northern Ireland and the Republic of Ireland in case of a no-deal Brexit.18 Under the NI Plan, the UK will not establish controls on goods at the land border between Northern Ireland and Ireland ("Land Border"). Additionally, importers bringing goods through this border will be exempted from (1) fulfilling customs formalities and (2) paying the UK temporary import tariff. Goods imported into the UK through the Land Border will remain subject to certain regulatory requirements such as: Electronic notifications for trade in dangerous chemicals, ozone depleting substances and F-gases. Requirement of a license for exports to the EU of dual-use or torture goods. Certification and checks for animal and plant products from non-EU countries. Certification and pre-notification for high-risk plant material from the EU. Payment of VAT by means of standard VAT returns or periodical online reports for small businesses. Payment of excise duties through a system similar to the existing EU excise system. The UK Government and the EU27 acknowledged that the NI plan will create legal and practical challenges and risks for maintaining control of the borders and monitoring the flow of goods. The European Commissioner responsible for Agriculture, Phil Hogan, described the NI Plan as likely incompatible with WTO Rules. Ireland's Prime Minister, Taoiseach Varadkar, noted that it might not be workable in the long term. 4. Placing products on the EU and UK market and CE marking considerations Currently, once a product is placed on the EU market, it can move freely within the EU (including the UK) without the need for additional registration or border checks. To benefit from this freedom of movement, the CE marking is required to be affixed on many products placed on the EU market to indicate compliance with applicable EU product safety standards. In the event of a no-deal Brexit, and in absence any other preferential arrangements, the UK Government has published information on the new product compliance regime that will apply from Brexit date. The Government has confirmed that there will be a grace period in which the EU CE marking will be recognised and accepted for placement of the product on the UK market. In 18 See UK Government Guidance, EU Exit: Avoiding a hard border in Northern Ireland in a no deal scenario, available at: https://www.gov.uk/guidance/eu-exit-avoiding-a-hard-border-in-northern-ireland-in-a-no-deal-scenario. practice, this means that products which are already marked with the CE declaration can continue to be sold in the UK, whereas new products that have not already been CE marked will need to be affixed with a UKCA marking. On the other hand, UK manufacturers who are exporting to the EU and have not placed their products on the EU27 market before Brexit will need to ensure that products which have been assessed by a UK notified body are reassessed and remarked by an EU recognised conformity assessment body before being placed on the EU internal market. This will also involve re-labelling the products accordingly. (a) In the UK Companies will still be able to place goods on the UK market after Brexit date that meet the relevant EU regulatory requirements and bear the CE marking. This applies whether the CE marking is used after the manufacturer has self-declared it, or after an EU-recognised conformity assessment body has assessed its conformity. However, this arrangement will only be for a limited time and the government will give businesses notice before this period ends. A new UK framework for conformity assessment will come into effect after Brexit. To this effect, there will be a new UKCA marking, which will indicate that a product complies with UK regulations and can be placed on the UK market (but not the EU market). Goods that are conformity assessed by a UK approved body after Brexit will be required to use the UKCA marking. It should be noted that the rules around using the new UKCA marking will mirror those which currently apply for the application of the CE marking. Therefore, for a limited time ONLY, goods using the CE marking will continue to be able to be placed on the market in the UK without any further assessment or marking or re-labelling required. (b) In the EU If the UK leaves the EU with no deal, all goods placed on the EU27 internal market will need to conform with applicable EU industrial products regulations. It is important to note that products that have already been placed on the EU internal market before 12 April 2019 can continue circulating after Brexit. It is therefore important to determine what this means in practice for businesses. Goods are ‘placed on the market’ when they are made available on the market for the first time. Making available on the market is defined as "any supply of a product for distribution, consumption, or use on the market in the course of a commercial activity, whether in return for payment or free of charge". A good is "placed on the market" only once, but may be "made available" several times throughout the supply chain (first wholesaler, second wholesaler, retailer, etc.) before it reaches the final user or is further processed into another product.19 This effectively means businesses will have to assess and document that each individual product was placed on the EU27 market pre-Brexit. Companies that are placing goods on the market after Brexit will need to arrange for goods to be reassessed by an EU-recognised conformity assessment body before placing on the EU internal market, and/or in case of self-conformity assessment, ensure that they have competent EU entities responsible for the products, as shown on certificates of conformity and necessary labels. 19 For more guidance on these definitions see the detailed Commission notice of 2016 ("Blue Guide") on the implementation of EU product rules, OJ C272, 26.7.2016. 5. What Businesses should do to prepare Businesses located in the EU27 and the UK involved in international trade and businesses trading with the UK should consider and already assess: The impact of additional customs procedures at the UK/EU27 border (e.g., whether their contracts include penalties for potential border delays or late delivery; whether they would need to increase their inventory/buy additional storage space prior to Brexit date; whether they rely on customs agents that are sufficiently trained to handle these procedures; who would bear responsibility for failure to comply with the additional customs procedures); The impact of additional customs tariffs at the UK/EU27 border (e.g., whether their contracts addresses who would bear the cost of such additional tariffs, also in light of incoterms used with suppliers and/or customers; the effect of additional tariffs on their costs of production); The impact of the UK's termination of certain EU trade defence measures (e.g., whether they currently import products subject to EU trade defence measures that the UK intends to terminate; whether they are currently protected by EU trade defence measures that the UK intends to terminate); The impact of the new rules of origin in the UK FTAs (e.g., whether their products would qualify for preferential origin; whether the components that they source would qualify for preferential origin); The impact of the UK's withdrawal from the EU FTAs (e.g., whether they currently benefit from preferential treatment under these FTAs; whether their customers would tend to rely on EU27 input rather than UK input to continue benefit from preferential treatment under these FTAs); Assess whether registration to customs facilitation measures (TSP, AEOs) make sense for your business, and/or re-assess your relationship with freight forwarder; Businesses should start assessing and/or reviewing their CE marking conformity assessment procedures. Businesses should ensure they are prepared for the additional labelling requirements. Product labels may need to be updated to reflect the fact that the UK is no longer part of the EU. Some operators currently operating in the UK might see their designation change under CE marking legislation, as well as their relevant obligations. Economic operators should therefore make sure that they are aware of all obligations they have to comply with postBrexit. Businesses should be aware that over time UK requirements could diverge from EU requirements, and ensure that they follow legislative developments in both markets very closely. *** Key EU / UK International Trade Contacts Lourdes Catrain Practice Area Co-Leader - International Trade, Brussels T +32 (2) 505 09 33 firstname.lastname@example.org Aline Doussin UK Lead – International Trade, London T +44 (20) 72962961 email@example.com Jérémie Charles Senior Associate, Brussels T +32 025050944 firstname.lastname@example.org Eleni Theodoropoulou Associate, Brussels T +32 25050942 email@example.com Jorge Torres Associate, Brussels T +32 (2) 505 09 43 firstname.lastname@example.org Imogen Brooks Associate, London T +44 (20) 7296 2119 email@example.com Alicante Amsterdam Baltimore Beijing Birmingham Boston Brussels Budapest* Colorado Springs Denver Dubai Dusseldorf Frankfurt Hamburg Hanoi Ho Chi Minh City Hong Kong Houston Jakarta* Johannesburg London Los Angeles Louisville Luxembourg Madrid Mexico City Miami Milan Minneapolis Monterrey Moscow Munich New York Northern Virginia Paris Perth Philadelphia Riyadh* Rome San Francisco São Paulo Shanghai Shanghai FTZ* Silicon Valley Singapore Sydney Tokyo Ulaanbaatar* Warsaw Washington, D.C. Zagreb* *Our associated offices www.hoganlovells.com "Hogan Lovells" or the "firm" is an international legal practice that includes Hogan Lovells International LLP, Hogan Lovells US LLP and their affiliated businesses. The word "partner" is used to describe a partner or member of Hogan Lovells International LLP, Hogan Lovells US LLP or any of their affiliated entities or any employee or consultant with equivalent standing. Certain individuals, who are designated as partners, but who are not members of Hogan Lovells International LLP, do not hold qualifications equivalent to members. For more information about Hogan Lovells, the partners and their qualifications, see www.hoganlovells.com. This publication is for information only. It is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Where case studies are included, results achieved do not guarantee similar outcomes for other clients. Attorney advertising. Images of people may feature current or former lawyers and employees at Hogan Lovells or models not connected with the firm. ©Hogan Lovells 2019. All rights reserved.