In just over 40 days (November 12), the Brexit transition period ends. As and from January 1 next, businesses will experience a sea change in the way that they trade with Great Britain. The seamless trading environment that exists today will be no more.
We remain hopeful that a trade deal between the EU and UK will be agreed. This will give businesses some much needed certainty. However, regardless of any trade deal, businesses will face new and lasting hurdles when trading with Great Britain from January 1, 2021, with customs declarations and new checks and controls coming into place.
Within the short window remaining, I strongly urge businesses to get ‘change’ ready and to revisit their Brexit plans. I know that this comes at a time of ongoing and extreme pressure on businesses as they work through the current pandemic and may not be trading as they normally would have.
The Government stands with business, ready to assist in managing the coming change. Given my responsibility for Trade Promotion, I have met with businesses across many different sectors, and while I have been heartened by the progress made by some, there is a need for businesses across the island to face the reality that Brexit is coming and take steps to address changes that will affect them.
A recent survey carried out by Enterprise Ireland found that just 42 percent of the companies surveyed were either fully or significantly ready for Brexit. We all must work to improve this level of Brexit readiness across the Irish businesses, particularly in the SME sector.
The most prominent issue identified by the businesses surveyed was that of customs and customs procedures. The UK will no longer be part of the EU Single Market or the Customs Union so customs formalities and EU rules will apply. Businesses need to decide now on the management of their customs procedures, if that is to engage a customs intermediary or, to take in-house. There are supports available to help businesses with customs which I urge them to explore, such as Enterprise Ireland’s ‘Ready for Customs’ grant which provides up to €9,000 per employee engaged in customs work.
Supply chains and the need for businesses to fully understand the origin and route to market of product imported, exported or moved through Great Britain is critical. While we remain optimistic, a particular concern if no trade agreement is concluded between the EU and the UK, would be the imposition of tariffs. For those engaged in the agri-food sector, tariffs would place a considerable additional cost burden on businesses.
Alternative business model
The option of looking to other suppliers in other markets outside of the UK may provide an alternative business model. Enterprise Ireland’s Brexit Readiness Checker is a useful tool to help identify Brexit exposures and, based on the Checker, to work up alternative approaches.
Businesses should also talk to their suppliers, hauliers, logistics providers and ferry operators to understand how product will be delivered or dispatched. From my engagement with these sectors, it is clear the UK Landbridge will be problematic no matter the outcome of negotiations. While it has been the preferred route to European markets, there likely will be delays getting product through and from the UK to European markets. Businesses need to understand what this means for them and should actively explore the option of using direct shipping routes to and from Europe.
Issues such as product certification, standards and licencing while not always garnering the same level of attention as tariffs, these are important considerations for some businesses. Goods manufactured in Ireland that require EU product certification or ‘CE marks’ cannot, after January 1, 2021, use UK notified bodies rather, businesses must use EU based notified bodies for this service.
Likewise, if businesses are importing chemical products which could for instance be brake fluid or household cleaning products from the UK, they need to become familiar with new responsibilities they face as importers of products into the EU from a third country, which includes ensuring labels meet EU requirements. Webinars on these issues are freely available to businesses on the websites of the National Standards Authority of Ireland, the Irish National Accreditation Board and the Health and Safety Authority.
Cashflow is the lifeblood of a business and it is important that businesses take steps to protect this from the impact of Brexit. Many businesses have already had to deal with currency volatility and further exchange rate movements could occur. The Brexit Loan Scheme operated by the Strategic Bank Corporation of Ireland is one scheme that would assist businesses to manage liquidity issues.
Government has a whole suite of financial supports and advisory services available through Enterprise Ireland, the Local Enterprise Offices, InterTradeIreland and others. I strongly encourage businesses to learn about the options available to them and to consider availing of some of them. A full list of grants and schemes and a Brexit Readiness checklist are available on my Department’s website. The wider suite of Government assistance can be viewed at www.Gov.ie/Brexit.
The Revenue Commissioners and the Department of Agriculture, Food and the Marine are also actively engaged with businesses building familiarity with the new customs and phytosanitary checks and controls from January 1 next. Again, I am encouraging businesses to access Brexit webinars available on their websites or reach out to them directly.
In terms of North/South trade on the island a hugely important aspect of our shared island, the Protocol on Ireland and Northern Ireland will come into effect on January 1, 2021 irrespective of the situation on a trade deal between the EU and the UK. It is imperative to maintain our seamless cross border trading relationship.
In short, with just over 40 days to go, my key message is to act now in time for January 1, 2021, to plan changes to your operations on a no regrets basis for Brexit to take your business through turbulent times ahead.
Robert Troy, TD for Longford/Westmeath, is Minister for Trade Promotion, Digital and Company Regulation