How warehousing, logistics and materials handling should be responding to ‘Brexit’.

by Ruari McCallion

The UK’s decision to leave the EU has generated uncertainty across Europe. Ruari McCallion tries to firm things up a little. The UK’s Referendum vote to leave the EU was unexpected, to say the least, and generated quite a lot of uncertainty, which is something that business generally hates.

The immediate reaction was turmoil in the stock and bond markets but, when it became apparent that the world had not actually come to an end, things settled down and commerce continued and even picked up a little in Q3 of 2016. However, things will not be the same in the future. Things are going to change.

‘Brexit’ looks like it will take place in Q1 or Q2 of 2019. That gives business two years to prepare. During that time, nothing will fundamentally change; the UK remains a member of the EU until the UK government enacts laws to repeal or amend the European Communities Act 1972 and consequent legislation. All existing laws and regulations remain in place until then.

The rest of the EU will probably continue as it was; it will only be trade with the UK that is affected.

"Around 44% of the UK’s exports go to EU countries."

New challenges, new requirements

Negotiations have not even started yet, and are a long way from complete, but there are quite a few things that businesses can do to prepare themselves for the ‘new world order’.

Around 44% of the UK’s exports go to EU countries. Businesses involved with complex supply chains, especially those in the auto, aerospace and chemicals sectors, may see components cross borders several times before the finished product rolls off its final assembly line.

It will become necessary to calculate more closely the value of components that cross borders and are sub-assembled then finally assembled before being installed in the product. Why? Because, currently, there is no tax, customs duty or tariff on products or materials crossing internal EU borders; that will not automatically be the case after Brexit.

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get ready for BREXIT
Bernardine Adkins, Gowling WLG, Solicitors