The European Commission has forged ahead with preparations for a ‘no-deal’ Brexit scenario, and recently released a communication urging member states to act in time when making contingency arrangements.

In the communication, Brussels warns that, due to lengthy consultation periods between national parliaments for legislation change, moves will be made towards preparing for the UK’s withdrawal by the end of December at the latest.

This should give sufficient time to both the European Parliament and the European Council for completing legislative acts ahead of March, and the intended departure date.

It should also allow time for the submission of all necessary draft implementing acts for a vote in the competent committees by February 15, 2019, at the latest.

To ensure “proper coordination among member states”, the Council Working Party will organise a series of sectorial meetings in November and December 2018 involving the Brexit preparedness coordinators of the EU 27 and relevant national administrations.

These preparedness seminars will be “an opportunity to assess jointly the state of play of preparedness and assess where additional action may be needed by stakeholders, national administrations and at EU level”.

Proposals

The commission has tabled eight legislative preparedness proposals for measures that must be adopted irrespective of whether the UK’s withdrawal is orderly or otherwise.

These measures include adjustments to the rules of approval of automotive vehicles or in relation to ship inspection organisations, and the apportionment between the UK and the EU 27 of tariff-rate quotas included in the goods schedule of the EU at the World Trade Organisation (WTO).

In the interest of the union, the commission is also supporting the UK in securing its accession to the Common Transit Convention as a non-EU transit country, provided that it is ready to meet the requirements of the convention.

This is the arrangement for the movement of goods that the EU operates under with countries such as Iceland, Norway and Switzerland, among others.

It will also back the UK’s accession to the convention on the simplification of formalities in trade in goods.

For the same reason, the commission supports the UK’s accession to the Government Procurement Agreement.

Measures

National measures, including the necessary increase in human resources (such as customs officers and official veterinarians) and putting in place, adjusting or strengthening the necessary infrastructures (for example in ports and airports), represent a central element of contingency planning.

The commission has said that it is ready to engage at once with member states that would be most affected by a ‘no-deal’ situation, and is willing to “explore pragmatic and efficient support solutions, in line with EU State aid law”.

In particular, the commission will support Ireland in finding solutions addressing the specific challenges of Irish businesses. It said it stands ready to support Ireland to find solutions addressing particular challenges.

The commission also reiterated its commitment to continuing the current PEACE and INTERREG programmes between the border counties of Ireland and Northern Ireland.

Technical and financial assistance from the EU can also be made available in certain areas, such as the training of customs officials under the Customs 2020 programme, according to the communication issued.

Exports

In the case of a no-deal scenario, as of the withdrawal date, goods entering the EU from the UK will be treated as imports and goods leaving the EU to the UK will be treated as exports.

All relevant EU legislation on imported goods and exported goods will apply, including the levy of certain duties and taxes (such as customs duties, value-added tax and excise on importation), in accordance with the commitments of the EU under the rules of the WTO.

From an Irish agricultural perspective, this could see hefty tariffs imposed on exports destined for the UK markets.

The need for customs declarations to be presented to customs authorities, and the possibility to control shipments will also apply.

The commission calls on member states to take all necessary steps to be in a position to apply the Union Customs Code and the relevant rules regarding indirect taxation on March 30, 2019, in case of a no-deal scenario, to all imports from and exports to the UK.

Customs authorities may issue authorisations for the use of facilitation measures provided for in the Union Customs Code, when economic operators request them, and subject to relevant requirements being met.

Ensuring a level-playing field and smooth trade flows will be “particularly challenging” in the areas with the densest goods traffic with the UK, the communication warns.

The commission says it is working with member states to help find solutions in full respect of the current legal framework.

On the basis of the EU veterinary legislation, if deemed to be justified, the commission will “list” the UK, if all applicable conditions are fulfilled, so as to allow the entry of live animals and animal products from the UK into the EU.

However, the commission cautions that, even if the UK is listed, strict health-related import conditions applied to third countries will be required and these imports will have to undergo sanitary and phytosanitary controls by member states authorities at Border Inspection Posts.

The commission, when approving new or extended Border Inspection Posts in the EU 27 member states, will take account of the flexibilities provided for in the applicable EU legislation.

‘Best option’

Concluding, the communication states: “The draft withdrawal agreement constitutes the best option for the withdrawal.

“In the absence of a withdrawal agreement, the EU will act to protect its interests, and should display a united and coordinated approach in all areas.”