The UK is scheduled to leave the EU at 11pm on 31 October 2019. While there remains no certainty about what will happen, the UK Government has said it is determined to ensure Brexit happens on that date, if necessary by leaving without a deal. Businesses should therefore be taking steps to understand their exposure to the risks of a no-deal Brexit, and considering what they can do to prepare for all eventualities.
UK businesses with trade moving between the UK and EU should by now be well-aware of the need to make themselves 'Brexit-ready' in case the UK leaves without a deal. One of the main messages coming from the UK Government has been the need for UK businesses trading with EU countries to obtain an Economic Operator Registration and Identification (EORI) number if they do not already have one.
As it stands, the EORI number is an EU-wide identification number that is recognised within all 28 EU Member States and must be recorded on all customs declarations. It is not possible for businesses to move goods into or out of the EU without an EORI number. Post-Brexit, an EORI number will be needed to move goods between the UK and the EU.
It is not as simple as applying for a UK EORI number, however. If the UK drops out of the EU without a deal, European Commission guidance suggests that UK EORI numbers will become invalid and will no longer be recognised by the EU. Notably, the UK Government has to date been largely silent on this issue..
To avoid disruption to the flow of goods, it is crucial that UK businesses with a valid UK EORI number also apply for an EU EORI number now. For businesses with a presence in a particular EU Member State already, the EU EORI number will need to originate from that state.
Procedures for issuing EU EORI numbers differ across the remaining 27 Member States. The European Commission has indicated that all customs authorities across the Member States are accepting applications for authorisations and registration now. These EU EORI numbers will activate upon the UK leaving the EU.
So UK businesses trading with the EU should (if they do not already have one) apply for a UK EORI number from HMRC, to ensure they can still move their goods into and out of the UK post-Brexit, and (whether or not they have a UK EORI number) apply for an EU EORI number from the Customs authorities in whichever EU state they deal with the most, to ensure they can still move their goods into and out of the EU.
Businesses may also wish to consider exporting or importing goods, and if necessary building up stocks, in advance of 31 October to guard against any administrative issues that arise while the new arrangements take effect.
Similarly, EU businesses intending to continue trading with the UK will need to apply for a UK EORI number post-Brexit (though unlike the Commission the UK Government has indicated that there will be a post-Brexit grace period, in which EU businesses can continue using their EU EORI number to bring goods into the UK while they wait to get a new UK number).
We are hoping that the UK Government issues further information on UK/EU EORI numbers soon, to ensure that UK businesses can take the appropriate next steps.
If you have any questions, please get in touch with Isobel d'Inverno or your usual Brodies contact.
Visit out Brexit Hub for regular updates on Brexit related matters, including our updated checklist for businesses to assess how ready they are for Brexit.