BREXIT BLOG: Don't bank on a last minute Brexit deal

As the spotlights shine on Brussels negotiations, supply chains and EU export facilitation are the main concerns occupying ceramic manufacturers’ minds. 

Behind the scenes, a huge amount of work is being done to prepare for all scenarios, and the British Ceramic Confederation is advising members to focus on business-critical contingency issues. We’re having ongoing discussions with the Department for Business, Energy and Industrial Strategy.

Although it is still very possible there will be a deal at the eleventh hour, planning for a ‘no deal’ Brexit is essential and there is no ‘one-size fits all’ approach as each manufacturer will face a unique set of challenges.

Some of the British Ceramic Confederation’s members are addressing key areas which include:

  • Stocks of critical imported raw materials - over and above the extra stocks of some minerals that have been in short supply recently for other reasons
  • Currency hedging - for a longer period than normal and/or increased proportion particularly among suppliers and those who export heavily
  • Buying more energy ahead in anticipation of price volatility
  • For exporters, exploring options on EU warehousing, distribution and logistics, and understanding the implications for stock and money tied up

Government has published a series of business guides in the event of no deal. At the moment, these guides include information on importing and exporting including goods classification and VAT payment, banking, patents, trademarks and designs, etc, but more are expected to be published in the coming weeks, with the most controversial guides last. The British Ceramic Confederation is keeping up to date with the latest advice as it is issued.

Similarly, European Commission Preparedness notices have been published for a while now.

The ceramic sector has a high number of SMEs and 60 per cent of the sector’s exports go to the EU. At the time of the referendum our members said the most important issues of concern were trade, and to a lesser extent energy, people and European research funding.

In the last year, we’ve responded directly to those trade concerns and have lobbied extensively to influence regulations on trade remedies, through the Manufacturing Trade Remedies Alliance (MTRA) that BCC chairs.

Ministers listened, and made amendments to the ‘Customs’ Bill, in response to our calls for #RobustRemedies, this included establishing a special methodology for calculating dumping from countries like China. The Trade Bill is in the House of Lords and may be amended by peers, we’re continually trying to influence positive outcomes for members.

As the Brexit deadline approaches, BCC will carry on updating members on the latest news from Government, and our position as a sector. In the meantime, members may want to consider the following areas:

Questions on export:

  • Are you / or your freight forwarders clued up on the Customs Declaration Service system which is replacing CHIEF?
  • Have you discussed post-Brexit arrangements for testing and conformity assessment with your testing house for EU exports?

Questions on trade:

  • Are you currently taking advantage of the full range of facilitated customs programmes available such as ‘Authorised Economic Operator’ and inward processing relief schemes?
  • What would be the cash flow impact of changes in the VAT regime? Have you understood whether you might need to register / make arrangements with HMRC and/or overseas authorities?

Questions on supply chain:

  • What proportion of your sales and purchases are with businesses in the EU and under which product codes?
  • Do you understand what new tariffs could apply to imports and exports after Brexit?
  • Are you trading with suppliers or customers in countries which currently have a preferential trade agreement with the EU e.g. Canada, South Korea?
  • Are you preparing to manage potential changes to ‘rules of origin’ which may be introduced post Brexit?

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