The UK formally left the EU on the 31st of January 2020. Since that date, a transition period has been in effect which will come to an end on the 31st of December 2020. During this period, all EU rules and laws continue to be applicable to the UK; virtually nothing will change for citizens and companies in the EU and the UK. They have time to prepare for the new agreements that the EU and the UK will establish regarding their future relationship after the 31st of December 2020.
Transition period
The transition period could have been extended had both parties agreed to do so prior to the 1st of July 2020. However, the British have indicated that they do not want to do this. Now that the deadline of the 1st of July has expired, it is no longer possible to extend the transition period under the Withdrawal Agreement.
New relationship
This means that the UK and the EU have until this autumn to reach consensus on the new relationship between both parties. The new agreements must come into effect after the transition period expires on the 31st of December 2020. They will first need to be ratified by the EU countries, the British Parliament and the European Parliament. If an agreement on a new trade relationship cannot be reached, then both parties will revert to the rules of the World Trade Organisation (including higher import duties and rules for product acceptance, for example) at the end of the transition period. Negotiations are currently in a difficult phase and the EU and the UK still substantially disagree on important issues. Both parties have committed to start negotiating more intensively.
Customs formalities a fact as of 1 January 2021
Irrespective of what the outcome of the negotiations may be, companies will always have to deal with customs formalities. Even if both parties do reach consensus on a trade relationship. Take countries such as Norway and Switzerland, for example. Extensive trade relationships exist with these countries and they are also subject to customs formalities such as declarations. Once the current transition period comes to an end on the 1st of January 2021, the free movement of goods to and from the United Kingdom will no longer be possible. This applies to both shortsea traffic and ferry traffic. Companies need to prepare for this new reality.
For more information, please visit www.getreadyforbrexit.eu
