What are the implications of a No Deal Brexit for the seafood industry?

The 31st January has come and gone and you would be forgiven for wondering what has changed in terms of Brexit and its impact on day to day business. We may have ‘left’ the European Union, but as we continue to temporarily follow EU rules - what is all the fuss about?

Boris Johnson had promised to ‘get Brexit done’ and ‘take back control’ of our waters and change is coming - but time is ticking away and the deadline of 31st July for a fisheries deal looms large. So what do we know and what are we yet to find out?

• The UK will continue to trade under EU rules and follow the Common Fisheries Policy until the end of December 2020 while the detail of the UK exit is negotiated in much more detailed terms than fleshed out in the Brexit deal which was finally passed in January.
• Tariffs on the import of 21 seafood commodity codes in the event of a no-deal Brexit have been announced which range from 7.5% to 24%. These rates match those currently enforced for imports into the EU from non-EU countries. However most of the seafood imported into the UK is whitefish which has avoided a temporary tariff.
• You may have heard the phrase ‘falling back on WTO rules’ in the last few months which is exactly what would happen in the above no-deal scenario. The UK would then apply World Trade Organisation rules in which the UK would be bound to grant the same market access to all other WTO members, unless a free trade agreement has been reached with these countries. Back in March 2019 deals were struck with Norway and Iceland to ensure no changes in dealings with two of our favourite Seafood trading nations.
• Quotas will be at the forefront of everyone’s mind in negotiations with the Leave campaign focussing heavily on having control of who can ‘plunder’ UK waters post-Brexit. The obvious complication here is the need for UK vessels to be able to work in EU waters and vice versa. Realistically a deal will need to be struck which appeases both parties and will allow trade to continue as frictionless as possible, what that will look like is anybody’s guess and may rely on what is agreed by each side in other aspects of the Brexit negotiations.
• Border delays are another ‘hot topic’ whenever the word Brexit is mentioned and panic has long since set in about UK exports held up at EU ports due to paperwork confusion or labelling confusion. It goes without saying that making sure paperwork is on time, legible and accurate is a must but exporters should also get to know the requirements of the destination country in detail and ensure that EU standards as a minimum continue to be met. Getting an EORI number now in case of a no-deal Brexit may also be a wise move in order to ensure no future issues arise.
• Importers dealing with Seafood directly coming in from EU countries will find procedures largely the same aside from the requirement for a catch certificate validated by the exporting country.
• As part of the EU the UK has also been part of the EU VAT area – another aspect which will change post-Brexit. Reverse charge rules on sales to another EU country will no longer apply in a no-deal with sales likely to be treated as zero rated similar to an export to a non-EU country currently. Importing VAT-eligible goods currently uses similar reverse charge rules which will again be scrapped for ‘regular’ VAT rules.

If you are concerned about how a no-deal Brexit will affect you and your business, please get in touch with us at info@forrester-boyd.co.uk to arrange a free, no-obligations consultation.