All cross border (EU) transactions considered for:

Regulatory compliance

Security

Tariffs

Goods

Check goods comply with regulatory requirements in recipient country. May involve certificates, licences, proof of origin etc.

Services

Check supplier of services qualified/ registered/ permitted to operate etc.

Combined Goods and Services

Compliance with obligations for both goods and services.

Illegal importing (smuggling), illegal immigration, terrorism etc.

Checks conducted against national and international databases (subject to access to relevant security information).

Import tax (or potentially tax on international services – although this is unlikely) according to category of goods.

Check appropriate tax has been paid and/or levy tax.

UK GDP is dominated by services, however only 39 per cent of exports are services. UK has a trade surplus with EU on services and a trade deficit on goods. 2/3 UK goods exports go to the EU.

A physical border for EU/UK transactions will require both Regulatory Compliance and proof of payment of Tariffs. Goods (and individuals) may be delayed at the border for checks. Other member states are preparing contingency plans for use in a 'No Deal' scenario to reduce such delays, particularly in relation to the movement of goods and transport at borders.

Service providers may not be permitted to provide services outside of the UK (including ‘fly in, fly out’ services, or remote services from UK) depending on sector. Breach may result in local prosecution and/or loss of insurance cover.

New licences, registrations and certificates may be required. UK businesses/ individuals may not be permitted to apply for EU approvals. Mutual recognition may be available in some sectors. EU incorporation of new businesses may be possible in others.

UK citizens will not have the automatic right to live or work in the EU and qualifications/ licences may not be recognised, although words of comfort have been given by certain EU member states in relation to the rights of UK citizens who have been living and working in certain member states for a substantial amount of time in advance of exit day. A visa may be required for entry but in the short-term a visa-waiver is likely to be put in place for entry for tourism and short visits.

The UK has stated that any EU nationals settled in the UK as of exit day will be able to apply for a settled status scheme in which the individual is able to live and work in the UK so long as they do not exit the UK for longer than a two year period.

A transition period would maintain a single market. The ‘backstop’ or joining the EEA would maintain a customs union with regulatory alignment to avoid border checks. This backstop was considered to be the most contentious factor of the proposed deal with the EU and the reason for the rejection of the deal in the ‘Meaningful Votes’ which took place in the House of Commons.

‘No Deal’ would allow an independent trade policy. In the short term it is expected that as a matter of practicality the UK will continue to trade with the rest of the world on the same terms (using the World Trade Organisation Most Favoured Nation schedules negotiated on the UK’s behalf as a member of the European Union) although there is some legal question over this approach. In the longer term, when trading with the rest of the world, the UK will seek to negotiate and adopt regulations/taxation or independent approaches better aligned to its policy or with a comparative advantage to competitors.

Should no deal be reached between the EU and the UK, the EU has stated that it will treat the UK as a third country (i.e. not a member state of the EU or on the terms of any of the trade agreements which it has set up with third countries). In theory this will mean that tariffs/taxes and checks will be introduced until a trade agreement is reach between the two. It may be possible for the EU and UK to put in place temporary arrangements which will preserve a non-tariff border during negotiation of a FTA - however that would require agreement from both parties.

Brexit trade policies

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