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October 31, 2018
2018 UPS® Customs Brokerage Webinar Series
Brexit - How to prepare with five months to go
Today’s webinar will begin shortly
Brexit countdown #3
How to prepare with five months to go
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Brexit - How to prepare with five months to go
Presenters
• Panelist
• Kristen Spano
• Customs Affairs
UPS UK
• Panelist
• Salima Gasmi
• Manager STTAS,
Brexit Consultant
• Host
• Greg Maddaleni
• Customs Brokerage
Sr Manager
UPS Global
• Panelist
• Walter van der Meiren
• Customs Brokerage
Director
UPS Europe
3
• Panelist
• Pasquale Pettoruto
• Managing Director,
Customs Brokerage
UPS Europe
NCBFAA: CCS/CES continuing education credits available; inquire upon check out Q&A?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Agenda
4
ANY QUESTION?
ASK OUR
PANELISTS USING
THE “Q&A”
FUNCTION
UPS & Brexit
Countdown to a hard Brexit
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Introduction
41 000 employees
in mainland
Europe and a
further 8 000 in
the UK facilitating
frictionless trade.
Operating in a time
sensitive industry
either by design,
customer preference,
or industry
requirement.
Often lacking the
capacity or expertise
for logistics in-
house, SME’s make
up a large part of
our customer base.
The UK withdrawal
from the EU will have
an impact UPS’s
current operations
and how we deliver
services to our
customers.
UPS Customers SMEs BREXIT
?
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Agenda
6
ANY QUESTION?
ASK OUR
PANELISTS USING
THE “Q&A”
FUNCTION
NCBFAA: CCS/CES continuing education
credits available; inquire upon check out
UPS & Brexit
Countdown to a hard Brexit
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Brexit Building Blocks
Next steps
March 2018 EP
Resolution +
European Council
June 2018
European
Council
October 2018
European
Council
March 2019
UK Becomes
third country
31 December
2020
Transition ends
Withdrawal
negotiations
First draft
Withdrawal
Agreement
EU/UK
Ratification
by Council,
EP, and UK
Transition Period
Start of discussions
with UK on
framework of future
relationships
Outstanding issues
• Governance
• Remaining “Other
Separation Issues”
• Protocol on Ireland
• Protocol on Cyprus
Further negotiations
on the future
relationship with UK
Continued preparation at EU27
+
Discussions with UK on future relation
Final
Withdrawal
Agreement
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
The Irish – Northern Irish Border
8
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Free Trade
Agreement
Securing free
movement of
goods and people
Backstop option
Northern Ireland stays
in EU Customs Union
and Single Market until
a Free Trade
Agreement is
implemented
Bespoke EU-UK
customs partnership
UK mirrors EU rules for
imports from 3rd
countries
No agreement
• Security barriers
• Customs controls
• Immigration checks
UKEU27
UKEU27
UKEU27
UKEU27
No border IRL-NI Border
Sea border Channel Border
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
The Big Divide
The EU is a club, all members have obligations and benefits.
 If you leave the club you cannot enjoy the
benefits of membership
 Not fair to the remaining club members
 Other members would like to leave the club if
you can still enjoy the benefits without the
obligations
EU APPROACH
UK APPROACH
 We are leaving the club because we want to
have our own controls
 We do not want all of the obligations from the
club anymore
 We want to work together with the club
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
EU APPROACH
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
A Hard Brexit
Air travel
1. EU-licensed airlines would lose the ability to operate wholly within the UK
2. UK-licensed airlines would lose the ability to operate intra-EU air services
3. Individual permission will be required for the airlines to operate between the UK and the EU
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
A Hard Brexit
Road travel
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
• No longer automatic recognition of Community Licenses for UK hauliers
• The demand for ECMT permits is expected to exceed supply
• Contingency plan for businesses if required permits not received
• UK motorists would need to carry a Green Card to prove insurance cover when
driving in the EU, EEA, Andorra, Serbia and Switzerland
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
What does it mean for a company within the UK/EU 27?
12
EXTERNAL BORDER
TRADE BARRIERS LONGER LIFECYCLE OF SHIPMENTS
OTHER REQUIREMENTS
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
• No more access to
Single Market and EU
Customs Union
• Customs declarations
between the EU 27 &
the UK
• Trade, veterinary,
phytosanitary and other
restrictions and controls
imposed by Other
Governmental Agencies
• There will be two
different customs Tariffs
• Customs duties
between the EU 27 and
the UK will be
introduced
• Preferential and
economic origin will
become relevant
• Customs Warehouses
• Authorisations
• Bill of Discharge
• Guarantees
Export formalities in UK
• Exit summary
declaration
• Export Declaration
Import formalities in EU27
• Entry summary
declaration
• Presentation
• Temporary Storage
• Import declarations or
NCTS
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
13
Non-tariff
• Security checks
• Labelling
• Authorisations
• Permits to trade
under different
conventions
Additional fees
• Declarations
• Authorisations
• Increased freight
• Warehouse
• Additional documents
• Classification
…
73% of pharmaceutical imports is coming from the EU, access to
pharmaceutical products could be reduced
Tariff
12.8% if not listed in
the PTEA
Example:
Placebo, #2106909260
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
14
Non-tariff
• Safety regulations
• Market prohibitions
• Labelling
• Reporting
• Registration
• Ozone-Depleting
substances
restrictions
Additional fees
• Declarations
• Authorisations
• Increased freight
• Warehouse
• Additional documents
• Classification
…
1.75 million vehicles were produced in the UK in 2017,
80% of which were exported
Tariff
10% tariff on vehicles
4.5% tariff on vehicle
components
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Agenda
15
ANY QUESTION?
ASK OUR
PANELISTS USING
THE “Q&A”
FUNCTION
NCBFAA: CCS/CES continuing education
credits available; inquire upon check out
UPS & Brexit
Countdown to a hard Brexit
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
68 notices by the European
commission covering
different areas
16
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
21s
t
centur
y
appro
ac h
civil
justice
health
and food
safety
customs
internal
market
company law
and
professional
qualification
s
financial
services
transport
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Customs preparedness
• All 3rd party customs formalities will apply
• Additional documentation and data
requirements comes with the customs
formalities.
• Duties and taxes (notably VAT and
excises) will have to be accounted for.
17
EU national customs authorities, will have to enforce EU rules for both
exports to and imports from the United Kingdom.
IT Update
Update IT systems4
Common Transit Convention
The Commission is facilitating the
accession of the UK to the CTC
3
Seminars
Run technical seminars to raise
awareness and to identify issues
2
Notices
Published notices so local administration
can get prepared for the new situation
1
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Customs preparedness
18
National governments are hiring
additional customs officials to
handle increased volume that
require customs clearance.
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
3000
750
900
750
750
505
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Agenda
19
ANY QUESTION?
ASK OUR
PANELISTS USING
THE “Q&A”
FUNCTION
NCBFAA: CCS/CES continuing education
credits available; inquire upon check out
UPS & Brexit
Countdown to a hard Brexit
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Examples of legislative changes needed as a result of the
United Kingdom’s withdrawal
20
GOV.UK
Driving and
transport
Labelling
products
and making
them safe
Medicines
and
medical
equipment
Travelling
between the
UK and the
EU
Importing
and
exporting
1. Appoint..
2. GMOs
3. Tobacco
4. Organic
food
…
Passport
1. Classification
2. Controlled
goods
…
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Trade with the EU
21
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Actions businesses can
take now to prepare
Understand
what the likely
changes to
customs and
excise
procedures
Ensure
necessary
planning is
taking place at
all levels
Consider the
impact on their
role in supply
chains with EU
partners
Consider
actions based
on ‘no deal’
scenario
Renegotiate
commercial terms to
reflect any changes
in customs and
excise procedures
Familiarise
yourselves with
the key
processes
1 2 3
4 5 6
‘no deal’ scenario
Register for
EORI number
Ensure INCOTERMS
are reflected
Consider who will
submit the declaration
Ensure correct
classification
Understand VAT
complexities
Understand
licensing
requirements
Mitigations for businesses
Consider whether using customs
procedures would be beneficial
Engage a customs broker, freight
forwarder or logistics provider
Familiarise themselves with the
key processes
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
VAT for businesses
22
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
If the UK leaves the EU without
an agreement, the government
will introduce postponed
accounting for import VAT on
goods brought into the UK.
Postponed accounting
UK businesses will continue to be
required to register for VAT in the EU
member states where sales are made
in order to account for the VAT due in
those countries.
VAT registration
This will continue to apply to
businesses as they do now
Domestic Transactions
UK aims to keep VAT
procedures as close as possible
to what they are now.
EU-UK Transactions
Low Value Consignment Relief (LVCR)
will not be extended to goods entering
the UK from the EU.
LVCR
This will no longer apply to UK
businesses that will be able to zero
rate sales of goods to EU consumers
Distance selling
VAT
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
VAT for businesses
23
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?Parcels up to £135
Online registration for digital service
(Available early 2019)
Online payment of taxes
Payment of VAT
Parcels above £135
Continue to be collected from UK
recipients in line with current
procedures for parcels from non-EU
countries
Parcels up to €22
No payment of VAT
Parcels above €22
VAT to be paid
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Postponed accounting
24
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
VS
Standard
Paid to customs authorities
At the point of import or
through a deferment
account
Postponed accounting
No import VAT payment to
the customs authorities
Declare through periodic
VAT return
Deduct the VAT through the
same return
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Agenda
25
ANY QUESTION?
ASK OUR
PANELISTS USING
THE “Q&A”
FUNCTION
NCBFAA: CCS/CES continuing education
credits available; inquire upon check out
UPS & Brexit
Countdown to a hard Brexit
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
UPS’s preparedness
 Time in transit
 Ready for ‘no deal’
 Contingency plan
26
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
How we can help
27
At every point in your supply chain, STTAS can have you covered
27
● Broker entry
instructions
● Entry validation
● FTA application
● Marking
● Foreign trade zone
(FTZ)
administration
● Licensing and PGA
determination
● Other special
programs and duty
optimization
● Denied party
screening
● Export product
classification
● Export licensing
determinations
● Commodity
jurisdiction
determination
● Compliance
program
development
● Compliance audits
and assessments
Sourcing Purchasing Import
Clearance
Post
Importation
Manufacturing
& Sales
Exporting &
Shipping
Post Export
● Denied party
screenings
● Landed costs
analysis
 Free trade
agreement (FTA)
opportunities
 ADD/CVD
 232/301 duties
● Product
classification
● Origin solicitation
 Manufacturer
affidavits
 FTA certificates
● Value
determination
● Admissibility
requirements
● Terms of sale
● Entry audits
 Post summary
corrections
● FTA reconciliation
● Value reconciliation
 Price paid analysis
 Assist reporting
 Transfer pricing
adjustments
● Broker
management and
invoice audit
● Denied party
screening
● Product origin
determination
 Marking
manufacturing
 FTA management
● Product
classification
● Customer request
responses
● Duty drawback
programs
● Export filing
audits/compliance
assessments
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Agenda
28
ANY QUESTION?
ASK OUR
PANELISTS USING
THE “Q&A”
FUNCTION
NCBFAA: CCS/CES continuing education
credits available; inquire upon check out
UPS & Brexit
Countdown to a hard Brexit
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Our recommendations
29
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
•
•
•
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Brexit Playbook
30
Interactive guidance for customers with or without international
shipping experience
Firstly, look into what it will take to
change your merchandise
management and inventory
systems
Register as Economic Operator
(EORI) and possibly as Authorized
Economic Operator (AEO) and
Registered Exporter (REX)
Now, consider updating or buying new
IT software for communicating and
storing customs data on both sides
Assess the requirements and
amounts needed to increase your
guarantees
Train your staff on customs and
on changes to external trade rules
Consider Exceptions (e.g. safety
and security measures,
inspections)
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
STTAS
ensures
compliance and
prevents fines
and penalties.
Importer of
Record
enables you
trade without
being present
at destination.
The breadth of UPS
portfolio enables
customers to
control the entire
process, makes it
more convenient for
end-customers and
increases overall
satisfaction.
Returns™
Service
offers
convenient
returns
solutions.
TradeAbility™
Service
manages the
complexities of
international
shipping.
Paperless™
Invoice
enables data
to quickly get
transmitted to
Customs.
Fiscal
Representation
overcomes the
complexities
of tax
requirements.
Ready™
Program
ensures
consistency in
customer
experience.
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Our recommendations
32
Six steps to prepare for trade between the United Kingdom and
the European Union post-Brexit
32
Traders
must also
consider…
• updating databases to ensure any new standards are covered.
• participating in trusted trader schemes (such as Authorised Economic Operator (AEO)), or becoming a
Registered Exporter (REX), and getting an Economic Operators’ Registration and Identification (EORI) number.
UPS & Brexit
The Brexit countdown
How does the EU prepare?
How does the UK prepare?
How does UPS prepare?
How can you prepare?
Be Ready
THE DEADLINE
Watch Out for
29th March 2019
Harmonize UK
Goods With EU laws
YOUR SUPPLY CHAIN
Get to Know Your Supply
Chain Better
Update Documents
as Needed
THE PAPERWORK
Check your documents
Define Roles and
Responsibilities
CUSTOMS
Assess Customs Impact
Update Status for
UK Input
RULES OF ORIGINS
Research Applicable Rules of
Origins
Comply with
Changes
RESTRICTIONS
Understand Prohibitions and
Restrictions
2
1
3
5
4
6
Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Thank you for your participation!
Brexit How to prepare with five months to go
• Check Out:
• NCBFAA: CES/CCS continuing education credit
• Feedback / value
• For more information contact Greg Maddaleni at gmaddaleni@ups.com
Thank You
BREXIT@ups.com
34

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Prepare for Brexit with UPS Webinar

  • 1. October 31, 2018 2018 UPS® Customs Brokerage Webinar Series Brexit - How to prepare with five months to go Today’s webinar will begin shortly
  • 2. Brexit countdown #3 How to prepare with five months to go
  • 3. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Brexit - How to prepare with five months to go Presenters • Panelist • Kristen Spano • Customs Affairs UPS UK • Panelist • Salima Gasmi • Manager STTAS, Brexit Consultant • Host • Greg Maddaleni • Customs Brokerage Sr Manager UPS Global • Panelist • Walter van der Meiren • Customs Brokerage Director UPS Europe 3 • Panelist • Pasquale Pettoruto • Managing Director, Customs Brokerage UPS Europe NCBFAA: CCS/CES continuing education credits available; inquire upon check out Q&A?
  • 4. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Agenda 4 ANY QUESTION? ASK OUR PANELISTS USING THE “Q&A” FUNCTION UPS & Brexit Countdown to a hard Brexit How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 5. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Introduction 41 000 employees in mainland Europe and a further 8 000 in the UK facilitating frictionless trade. Operating in a time sensitive industry either by design, customer preference, or industry requirement. Often lacking the capacity or expertise for logistics in- house, SME’s make up a large part of our customer base. The UK withdrawal from the EU will have an impact UPS’s current operations and how we deliver services to our customers. UPS Customers SMEs BREXIT ? UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 6. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Agenda 6 ANY QUESTION? ASK OUR PANELISTS USING THE “Q&A” FUNCTION NCBFAA: CCS/CES continuing education credits available; inquire upon check out UPS & Brexit Countdown to a hard Brexit How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 7. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Brexit Building Blocks Next steps March 2018 EP Resolution + European Council June 2018 European Council October 2018 European Council March 2019 UK Becomes third country 31 December 2020 Transition ends Withdrawal negotiations First draft Withdrawal Agreement EU/UK Ratification by Council, EP, and UK Transition Period Start of discussions with UK on framework of future relationships Outstanding issues • Governance • Remaining “Other Separation Issues” • Protocol on Ireland • Protocol on Cyprus Further negotiations on the future relationship with UK Continued preparation at EU27 + Discussions with UK on future relation Final Withdrawal Agreement UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 8. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. The Irish – Northern Irish Border 8 UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? Free Trade Agreement Securing free movement of goods and people Backstop option Northern Ireland stays in EU Customs Union and Single Market until a Free Trade Agreement is implemented Bespoke EU-UK customs partnership UK mirrors EU rules for imports from 3rd countries No agreement • Security barriers • Customs controls • Immigration checks UKEU27 UKEU27 UKEU27 UKEU27 No border IRL-NI Border Sea border Channel Border
  • 9. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. The Big Divide The EU is a club, all members have obligations and benefits.  If you leave the club you cannot enjoy the benefits of membership  Not fair to the remaining club members  Other members would like to leave the club if you can still enjoy the benefits without the obligations EU APPROACH UK APPROACH  We are leaving the club because we want to have our own controls  We do not want all of the obligations from the club anymore  We want to work together with the club UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? EU APPROACH
  • 10. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. A Hard Brexit Air travel 1. EU-licensed airlines would lose the ability to operate wholly within the UK 2. UK-licensed airlines would lose the ability to operate intra-EU air services 3. Individual permission will be required for the airlines to operate between the UK and the EU UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 11. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. A Hard Brexit Road travel UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? • No longer automatic recognition of Community Licenses for UK hauliers • The demand for ECMT permits is expected to exceed supply • Contingency plan for businesses if required permits not received • UK motorists would need to carry a Green Card to prove insurance cover when driving in the EU, EEA, Andorra, Serbia and Switzerland
  • 12. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. What does it mean for a company within the UK/EU 27? 12 EXTERNAL BORDER TRADE BARRIERS LONGER LIFECYCLE OF SHIPMENTS OTHER REQUIREMENTS UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? • No more access to Single Market and EU Customs Union • Customs declarations between the EU 27 & the UK • Trade, veterinary, phytosanitary and other restrictions and controls imposed by Other Governmental Agencies • There will be two different customs Tariffs • Customs duties between the EU 27 and the UK will be introduced • Preferential and economic origin will become relevant • Customs Warehouses • Authorisations • Bill of Discharge • Guarantees Export formalities in UK • Exit summary declaration • Export Declaration Import formalities in EU27 • Entry summary declaration • Presentation • Temporary Storage • Import declarations or NCTS
  • 13. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. 13 Non-tariff • Security checks • Labelling • Authorisations • Permits to trade under different conventions Additional fees • Declarations • Authorisations • Increased freight • Warehouse • Additional documents • Classification … 73% of pharmaceutical imports is coming from the EU, access to pharmaceutical products could be reduced Tariff 12.8% if not listed in the PTEA Example: Placebo, #2106909260
  • 14. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. 14 Non-tariff • Safety regulations • Market prohibitions • Labelling • Reporting • Registration • Ozone-Depleting substances restrictions Additional fees • Declarations • Authorisations • Increased freight • Warehouse • Additional documents • Classification … 1.75 million vehicles were produced in the UK in 2017, 80% of which were exported Tariff 10% tariff on vehicles 4.5% tariff on vehicle components
  • 15. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Agenda 15 ANY QUESTION? ASK OUR PANELISTS USING THE “Q&A” FUNCTION NCBFAA: CCS/CES continuing education credits available; inquire upon check out UPS & Brexit Countdown to a hard Brexit How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 16. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. 68 notices by the European commission covering different areas 16 UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? 21s t centur y appro ac h civil justice health and food safety customs internal market company law and professional qualification s financial services transport
  • 17. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Customs preparedness • All 3rd party customs formalities will apply • Additional documentation and data requirements comes with the customs formalities. • Duties and taxes (notably VAT and excises) will have to be accounted for. 17 EU national customs authorities, will have to enforce EU rules for both exports to and imports from the United Kingdom. IT Update Update IT systems4 Common Transit Convention The Commission is facilitating the accession of the UK to the CTC 3 Seminars Run technical seminars to raise awareness and to identify issues 2 Notices Published notices so local administration can get prepared for the new situation 1 UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 18. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Customs preparedness 18 National governments are hiring additional customs officials to handle increased volume that require customs clearance. UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? 3000 750 900 750 750 505
  • 19. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Agenda 19 ANY QUESTION? ASK OUR PANELISTS USING THE “Q&A” FUNCTION NCBFAA: CCS/CES continuing education credits available; inquire upon check out UPS & Brexit Countdown to a hard Brexit How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 20. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Examples of legislative changes needed as a result of the United Kingdom’s withdrawal 20 GOV.UK Driving and transport Labelling products and making them safe Medicines and medical equipment Travelling between the UK and the EU Importing and exporting 1. Appoint.. 2. GMOs 3. Tobacco 4. Organic food … Passport 1. Classification 2. Controlled goods … UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 21. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Trade with the EU 21 UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? Actions businesses can take now to prepare Understand what the likely changes to customs and excise procedures Ensure necessary planning is taking place at all levels Consider the impact on their role in supply chains with EU partners Consider actions based on ‘no deal’ scenario Renegotiate commercial terms to reflect any changes in customs and excise procedures Familiarise yourselves with the key processes 1 2 3 4 5 6 ‘no deal’ scenario Register for EORI number Ensure INCOTERMS are reflected Consider who will submit the declaration Ensure correct classification Understand VAT complexities Understand licensing requirements Mitigations for businesses Consider whether using customs procedures would be beneficial Engage a customs broker, freight forwarder or logistics provider Familiarise themselves with the key processes
  • 22. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. VAT for businesses 22 UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? If the UK leaves the EU without an agreement, the government will introduce postponed accounting for import VAT on goods brought into the UK. Postponed accounting UK businesses will continue to be required to register for VAT in the EU member states where sales are made in order to account for the VAT due in those countries. VAT registration This will continue to apply to businesses as they do now Domestic Transactions UK aims to keep VAT procedures as close as possible to what they are now. EU-UK Transactions Low Value Consignment Relief (LVCR) will not be extended to goods entering the UK from the EU. LVCR This will no longer apply to UK businesses that will be able to zero rate sales of goods to EU consumers Distance selling VAT
  • 23. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. VAT for businesses 23 UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?Parcels up to £135 Online registration for digital service (Available early 2019) Online payment of taxes Payment of VAT Parcels above £135 Continue to be collected from UK recipients in line with current procedures for parcels from non-EU countries Parcels up to €22 No payment of VAT Parcels above €22 VAT to be paid
  • 24. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Postponed accounting 24 UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? VS Standard Paid to customs authorities At the point of import or through a deferment account Postponed accounting No import VAT payment to the customs authorities Declare through periodic VAT return Deduct the VAT through the same return
  • 25. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Agenda 25 ANY QUESTION? ASK OUR PANELISTS USING THE “Q&A” FUNCTION NCBFAA: CCS/CES continuing education credits available; inquire upon check out UPS & Brexit Countdown to a hard Brexit How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 26. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. UPS’s preparedness  Time in transit  Ready for ‘no deal’  Contingency plan 26 UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 27. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. How we can help 27 At every point in your supply chain, STTAS can have you covered 27 ● Broker entry instructions ● Entry validation ● FTA application ● Marking ● Foreign trade zone (FTZ) administration ● Licensing and PGA determination ● Other special programs and duty optimization ● Denied party screening ● Export product classification ● Export licensing determinations ● Commodity jurisdiction determination ● Compliance program development ● Compliance audits and assessments Sourcing Purchasing Import Clearance Post Importation Manufacturing & Sales Exporting & Shipping Post Export ● Denied party screenings ● Landed costs analysis  Free trade agreement (FTA) opportunities  ADD/CVD  232/301 duties ● Product classification ● Origin solicitation  Manufacturer affidavits  FTA certificates ● Value determination ● Admissibility requirements ● Terms of sale ● Entry audits  Post summary corrections ● FTA reconciliation ● Value reconciliation  Price paid analysis  Assist reporting  Transfer pricing adjustments ● Broker management and invoice audit ● Denied party screening ● Product origin determination  Marking manufacturing  FTA management ● Product classification ● Customer request responses ● Duty drawback programs ● Export filing audits/compliance assessments UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 28. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Agenda 28 ANY QUESTION? ASK OUR PANELISTS USING THE “Q&A” FUNCTION NCBFAA: CCS/CES continuing education credits available; inquire upon check out UPS & Brexit Countdown to a hard Brexit How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 29. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Our recommendations 29 UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? • • •
  • 30. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Brexit Playbook 30 Interactive guidance for customers with or without international shipping experience Firstly, look into what it will take to change your merchandise management and inventory systems Register as Economic Operator (EORI) and possibly as Authorized Economic Operator (AEO) and Registered Exporter (REX) Now, consider updating or buying new IT software for communicating and storing customs data on both sides Assess the requirements and amounts needed to increase your guarantees Train your staff on customs and on changes to external trade rules Consider Exceptions (e.g. safety and security measures, inspections) UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare?
  • 31. STTAS ensures compliance and prevents fines and penalties. Importer of Record enables you trade without being present at destination. The breadth of UPS portfolio enables customers to control the entire process, makes it more convenient for end-customers and increases overall satisfaction. Returns™ Service offers convenient returns solutions. TradeAbility™ Service manages the complexities of international shipping. Paperless™ Invoice enables data to quickly get transmitted to Customs. Fiscal Representation overcomes the complexities of tax requirements. Ready™ Program ensures consistency in customer experience.
  • 32. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Our recommendations 32 Six steps to prepare for trade between the United Kingdom and the European Union post-Brexit 32 Traders must also consider… • updating databases to ensure any new standards are covered. • participating in trusted trader schemes (such as Authorised Economic Operator (AEO)), or becoming a Registered Exporter (REX), and getting an Economic Operators’ Registration and Identification (EORI) number. UPS & Brexit The Brexit countdown How does the EU prepare? How does the UK prepare? How does UPS prepare? How can you prepare? Be Ready THE DEADLINE Watch Out for 29th March 2019 Harmonize UK Goods With EU laws YOUR SUPPLY CHAIN Get to Know Your Supply Chain Better Update Documents as Needed THE PAPERWORK Check your documents Define Roles and Responsibilities CUSTOMS Assess Customs Impact Update Status for UK Input RULES OF ORIGINS Research Applicable Rules of Origins Comply with Changes RESTRICTIONS Understand Prohibitions and Restrictions 2 1 3 5 4 6
  • 33. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. © 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. Thank you for your participation! Brexit How to prepare with five months to go • Check Out: • NCBFAA: CES/CCS continuing education credit • Feedback / value • For more information contact Greg Maddaleni at gmaddaleni@ups.com