FIRMS MUST BE FLEXIBLE AMIDST BREXIT UPHEAVAL

Member News

During the protracted negotiation of Brexit we have heard mention of, among other terms, “hard Brexit”, “soft Brexit”, a Customs union – but what any sort of Brexit means is change, and change is opportunity.

There has always been economic pressure on certain sectors of the British and World economies to proactively respond to change, whether that be refinements to manufacturing processes, streamlining logistics operations or wholesale diversification.

Brexit is one more economic imperative which, depending on the evolving negotiations, puts further pressure on business to be resilient, innovative and flexible.

This is not something new to the world of business though – far from it. For example in 1474, Gebruder Weiss was founded and up until the early 19th century delivered letters and goods over the Alps to Milan and was the formative logistics company and today remains the oldest courier service in the world.

Of slightly younger vintage is the oldest US trucking company, Jones Motor Group, which was founded in 1894.

Both companies are still operating successfully, having diversified and studied innovative ways of remaining in business in a changing world.

Brexit may mean that to address the common challenges businesses face such as assuring and securing their ‘just-in-time supply chain’, companies will need to evaluate what works for them and the most cost-effective solutions, ahead of a yet unknown customs environment. Key elements of the international goods trade, which the customs declarations are based (essential for the calculation of customs duties), are the tariff classification of the goods, their origin and their value.

One important factor emerging from the UK’s various proposed new customs arrangements which has a significant impact if ‘no deal’ is struck; is that companies will have to be readily able to assist to prove the origin and routing of items they carry, to satisfy customs authorities of the correct ‘rules of origin’ on behalf of customers.

Hence, efficient processes that track and secure the items will be a major factor post EU exit.

A customs tool such as the Authorised Economic Operator (AEO) Scheme may be considered by companies wishing to demonstrate the integrity and speed of their supply chain and benefit from the proposed improved frictionless movements from many global fiscal authorities.

The authorisation process, which takes up to 120 days to approve, tests the applicant’s tax and customs compliance, commercial and transport record-keeping standards, financial solvency and practical standards of competence within the scope of their business activity.

AEO certification provides a reassuring ‘kite mark’ to potential and existing customers, showing that the company is sufficiently skilled and knowledgeable in customs and supply chain issues to keep their items moving, whether this is across the USA or over the Alps.

Recognising the need to consider and realign a company’s day-to-day customs operations may be a key part of planning for the future, not just from October 31 2019 or some date before, or even after this, but well beyond these dates.

To discuss AEO, contact Chris Barlow. Email: [email protected] Tel: 0121 237 1840