With Deal or No-Deal
Over 3 years ago on June 23rd 2016 the British decided to leave the EU. Three times since then the agreement on a controlled exit was rejected, eight alternative proposals found no majority in Europe’s oldest democracy.
Significant changes will come on October 31, 2019 – either without any regimentation and immediately, or with a few more months of delay. But nobody should seriously count on such a miracle like a „Deal at last minute“.
The EU will lose not just ideationally on October 31st, but also one of its main net financial contributors. No one can predict what it will bring for the British at the end. But let’s put the political dimension aside and look at the commercial impact.
Britain will not go down in the North Atlantic as some panicmongers picture it, but even high-ranking British politicians fear a supply chaos and even inner unrest – the island empire is too closely intertwined with continental Europe. Britain would suddenly become a third country in terms of customs – without any contracts or preference rules. International treaties must all be newly negotiated and politically sanctioned. This can take time and consequent delays may bring unprepared companies into existential difficulties.
In the modern British economy there is little left of stockholding on a larger scale. High security of supply is the customer demand for every business. Although many companies have made their arrangements, supply interrupts must still be expected as the situation is unprecedented. And hardly anyone in the EU can say for sure today how much Britain is included in their supply products.
But use the remaining time for countermeasures:
- Review your contracts and all supply relationships: Which goods (or services) do you purchase or produce in the UK? And which of your own products are going to customers in the UK?
- Extend this question to your suppliers at least the first and second levels and, if possible, the third and fourth levels
- Analyze your sales plans and latest business development planning data for these products, find out all products that are critical, and create emergency reserves in reasonable quantities, preferably near the point of need
- If you have not already done so, find optional alternative manufacturers of your Brexit-related supply products with sufficient capacity for both your needed quality and quantity
- Critically review your own resources and qualifications, whether you are customs related and logistically able from one day to the other to import and export of the products observing all rules and obligations as they were for non-EU countries
- Start looking for competent, flexible partners to help you in case your own resources may not be sufficient for finding alternative suppliers and handling import and export administration.
- British companies must be aware that EU based manufacturers got very used to the simpler inner-EU proceedings. Some may underestimate the upcoming challenges and give up UK business for the administrative extra efforts for customs related third countries. In such case consider Auxiliant as an export agent or as your partner to find and qualify equivalent quality suppliers in Central and Eastern Europe.
AUXILIANT serves UK customers for many years and provides professional assistance to companies looking for reliable suppliers foreign as well as domestic, management of those suppliers, and to handle third-country imports and exports: We’ll be there to help you meet your Brexit challenges.
The content above is of general character. Prior to making decisions in legal matters, Auxiliant always recommends to discuss your situation individually with a lawyer that is familiar with the individual circumstances. Local chambers of commerce will also provide support.