The end of the Brexit Transition Period on 31 December 2020 is fast approaching. The implications of either a trade deal or a "no deal" will constitute a major change for any company that has operations — directly or indirectly — in the UK as well as in the EU.
However, despite this looming deadline, we know that many businesses are still not fully prepared and plans may have been put on hold due to COVID-19. To help get you up to speed with your Brexit planning, we have set out below some key specific steps that you should take in order to fully prepare for Brexit. These steps have upcoming hard deadlines and are specifically focused on customs, intellectual property, competition, indirect tax/VAT and healthcare and product regulation.
For a wider view on all the issues currently in play, access our "No Deal" Brexit Checklist.
- By 23 December 2020 - During the transition period, ongoing deals that meet the EU merger notification thresholds should be formally notified to the European Commission (EC) to ensure the merger falls within the EC’s exclusive jurisdiction for review. This involves focusing on supporting the pre-notification process as of now especially in complex transactions in order to meet the notification deadline.
- By 31 December 2020 – Review Incoterms in commercial contracts and arrangements to confirm default legal responsibilities (e.g. which entity will be responsible for payment of any customs duties that become payable) and requirements for goods traded between the UK and EU.
- By 31 December 2020 – Consider engaging a customs intermediary (e.g. customs agent, freight forwarder, or broker) to assist with customs declarations for imports from EU into UK (and vice versa). If no customs intermediary will be engaged, ensure the business has access to HMRC systems and appropriate software in order to make customs declarations.
- From 1 January 2021 – EU-established entities may not be eligible to act as "declarant" for imports into the UK, and UK-established entities may no longer be able to act as "declarant" for imports into the EU. By 31 December 2020, understand impact and consider appointing an indirect representative with the relevant establishment to act as "declarant" and ensure appropriate agreement is in place.
- From 1 January 2021 – Economic Operators Registration and Identification (EORI) numbers issued by EU Member State authorities will not be applicable for imports into the UK and EORI numbers issued by UK authorities will not be applicable for imports into EU Member States. By 31 December 2020 apply for UK EORI number (if importing into UK and currently only have an EORI number issued by another EU Member State) or an EU EORI number (if importing into an EU Member State and currently only have a UK EORI number). It takes around 5-10 minutes to apply for an EORI number and takes up to a week for it to be issued.
- From 1 January 2021 – Consider applying for a duty deferment account (DDA) to enable customs charges (e.g. customs duty, excise duty, and import VAT) to be paid once a month through Direct Debit instead of being paid on individual consignments. To set up a DDA, traders, or their representatives, apply for a deferment account number and will need to be authorised by HMRC. A DDA will not need to be in place until the point of submitting any delayed customs declarations (i.e. up to six months from point of import if imported from 1 January 2021 to 30 June 2021 - please see below for more information).
- From 1 January 2021 – Customs rulings (BTIs, BOIs etc.) issued by EU Member State authorities will no longer be binding in the UK and vice versa (although HMRC has stated that it would honour EU rulings for a short period but this has not been officially confirmed). By 31 December 2020 engage with relevant customs authorities with a view to ensuring continuity of rulings.
Customs declaration process
- From 1 January 2021 until 30 June 2021 – Traders importing standard goods (everything from clothes to electronics), will need to prepare for basic customs requirements, such as keeping sufficient records of imported goods. Traders will then have up to six months from the date of importation to complete a customs declarations. Tariffs will be payable where due on relevant goods, but payments can be deferred until the customs declaration has been made. (For the process from 1 July 2021 onwards see below).
- From 1 January 2021 – Standard customs declarations will be needed for controlled goods (including excise goods (e.g. alcohol and tobacco products); controlled drugs and drug precursor chemicals; endangered species; fish; explosives; rough diamonds; and weapons).
- From 1 April 2021 – All products of animal origin (e.g. meat, honey, milk, eggs) and all regulated plants and plant products (good subject to sanitary and phytosanitary controls) imported into the UK will require pre-notification and the relevant health documentation.
- From 1 July 2021 – Traders moving all goods into the UK will have to make full customs declarations and pay customs duties at the point of importation.
- From now - we recommend dual EU and UK filings for new EU trade mark (EUTM) applications and EUTM designations under the Madrid system for international trade marks, since applications filed between now and 31 December 2020 are unlikely to proceed to registration before the end of the Transition Period.
- From now - consider on a case-by-case basis whether to re-file pending EUTM applications and EUTM designations in the UK. In most cases, filing a UK application during the 9 month period after 31 December 2020 in order to benefit from the original filing date will be the best option, but in cases where securing an earlier registration is vital, e.g. in order to commence infringement proceedings, re-filing in the UK now may be advisable.
- From 1 January 2021 - EUTMs will no longer cover the UK, so UK national applications will be essential to obtain protection in the UK.
- From 1 January 2021 - update records to reflect new "cloned" UK trade mark registrations arising out of EUTMs granted before the end of the transition period, prepare to audit cloned rights for accuracy, and consider whether to opt out of cloned UK registrations.
- By 30 September 2021 - where EUTMs or EUTM designations were pending at the end of the Transition Period, file applications for national UK trade mark protection to retain the original EU filing date.
- From 1 January 2021 - Registered Community Designs (RCDs) will no longer cover the UK, so UK national applications will be necessary to obtain protection in the UK
- From 1 January 2021 - update records to reflect new "cloned" UK design registrations arising out of RCDs granted before the end of the transition period, prepare to audit cloned rights for accuracy, and consider whether to opt out of cloned UK registrations.
- By 30 September 2021 - where RCDs were pending or deferred at the end of the Transition Period, file applications for national UK registered design protection to retain the original EU filing date.
Plant variety rights
- From 1 January 2021 - Community Plant Variety Rights (CPVRs) will no longer cover the UK, so UK national applications will be necessary to obtain protection in the UK.
- From 1 January 2021 - update records to reflect new "cloned" UK plant variety registrations arising out of CPVRs granted before the end of the transition period, prepare to audit cloned rights for accuracy, and consider whether to surrender cloned UK registrations.
- By 30 June 2021 - where CPVRs were pending or deferred at the end of the Transition Period, file applications for national UK Plant Breeders' Rights to retain the original EU filing date.
- From now - analyse data flows between the UK and the EEA. In the absence of a decision from the EU that the UK provides "adequate" protection for personal data, clients will need to be ready to put in place alternative mechanisms to legitimise transfers of personal data from the EEA to the UK.
- From now - where the ICO is currently considered your lead supervisory authority (LSA) for data protection in the EEA, identify whether another supervisory authority in the EEA can take its place or (for businesses that will have no office, branch or other establishment in the EEA after the transition period, but will continue to offer goods and/or services to individuals in the EEA), consider whether to appoint a representative in the EEA.
- From 1 January 2021 - in the absence of an "adequacy decision", put in place alternative measures to legitimise EU-UK data transfers. Be prepared for a change in your LSA, and to appoint an EEA representative if necessary.
- From now - consider whether existing processes need to be adjusted to ensure ongoing compliance with legal requirements relating to online activities in each EEA country, since UK-based online service providers will no longer benefit from the country-of-origin principle under the eCommerce Directive and will have to comply with local rules in each individual EEA country in which they operate.
- By 1 January 2021 - establish whether any of your UK entities currently having "distributor" status (and related obligations) under product laws will have "importer" status (and corresponding obligations) after 1 January 2021
By 1 January 2021 - include any UK Importer's name and address on the label of products destined for the GB market or, under transitional arrangements until 31 December 2022, instead on the accompanying documentation
By 1 January 2021 - replace any EU-27-based "Authorised Representatives" and "Responsible Persons" with UK-based entities as necessary (those based outside of the UK will no longer be recognised in GB)
By 1 January 2022 - mark products destined for the GB market with the UKCA mark (until then, the CE mark can continue to be used for most products including for example, toys, PPE, electrical equipment etc. See UK Gov guidance here)
By 1 January 2021 - establish which entity in your supply chain will have the status of "Responsible Person" ("RP", i.e. the UK based manufacturer or importer unless they authorise a third party located in the UK via a written mandate)
From January 2021 – RPs must make all necessary notifications to the Secretary of State according to the specified timeframes
From 1 January 2021/23 - label cosmetic products destined for the UK market with the name and address of the UK RP - where products are compliant with the equivalent EU labelling requirement (i.e. include details of an EU-based RP) the labels need not be changed for a transitional period of two years
From 1 January 2021 - register all medical devices and in vitro diagnostic medical devices (IVDs) placed on the UK market with the Medicines and Healthcare products Regulatory Agency (MHRA). The following grace periods apply for registering:
4 months (until 30 April 2021) for Class IIIs and Class IIb implantables, and all active implantable medical devices
8 months (until 31 August 2021) for other Class IIb and all Class IIa devices
12 months (until 31 December 2021) for Class I devices (other than those that are currently required to register with the MHRA)
By 1 January 2021 - if you are a manufacturer based outside the UK and wish to place a device on the UK market, designate a UK Responsible Person to take responsibility for the product in the UK. (See UK government guidance here.)
No later than 1 January 2021 - Submit any required UK VAT registration notification by the relevant date. For many non-UK established businesses intending to make UK supplies at the end of the transition period, they will be required to notify HMRC of this no later than 1 January 2021. For UK established businesses the deadline for registering depends on when they expect to exceed the VAT registration threshold.
By 20 January 2021 - Submit any final UK MOSS return for supplies made up until 31 December 2020.
Register for EU MOSS, if applicable, by 10th of the month following the first relevant EU sale, or register for VAT in each EU member state where digital services are supplied in accordance with local reporting deadlines.