EC 'Contingency Action Plan' for No Deal - update for food & agri sector

Brexit, the UK leaving the EU, will take place in just over 100 days, unless the decision is withdrawn or the period is unanimously extended.

The European Commission (EC) launched the Contingency Action Plan (the Plan) last month.

The contingency measures announced in the Plan are unilateral measures for damage limitation and can only mitigate the most severe consequences of a withdrawal without an agreement. 

The EC has, as of 19 December, started implementing their Brexit ‘no deal’ contingency action plan. It includes 14 specific, temporary measures in a limited number of areas to avoid major disruption for the EU 27.

Withdrawal of the UK and EU Food Law notice was set out by the EC earlier this year.   

Of particular note for the food and agribusiness sector in the EC’s Plan will be the following aspects:

Citizens

The Commission considers that periods of legal residence of UK citizens in an EU27 Member State before the withdrawal date should be considered as periods of legal residence in a Member State of the European Union in accordance with Directive 2003/109/EC. This will help UK citizens who are resident in the EU27 to obtain long-term resident status in the Member State where they reside if they fulfil the necessary conditions.  the Commission welcomes the reassurances by  the UK Prime Minister that even in a no deal scenario, the rights of EU citizens in the United Kingdom will be protected in a similar way.  The Commission has, in parallel, adopted a proposal for a Regulation amending the Visa Regulation COM (2018) 745. The proposal aims to facilitate the movement of persons between the European Union and the United Kingdom by exempting UK nationals from the visa requirement for short stays in the European Union, provided that nationals from all EU27 Member States are equally exempted from UK visa requirements.

Road transport   

The Commission is proposing that operators from the United Kingdom are temporarily allowed to carry goods into the Union, provided the United Kingdom confers equivalent rights to Union road haulage operators and subject to conditions ensuring fair competition. This measure shall enter into force in case of no deal, and cease to have effect on 31 December 2019.

Previously the EC had stated that, in case of no deal scenario, as of the withdrawal date, UK hauliers would have market access rights limited to the permits offered under the European Conference of Ministers of Transport (ECMT) which would allow for considerably less traffic than what currently takes place between the Union and the United Kingdom. Current EU law contains no mechanism to extend the Community licenses, which give wider access rights to hauliers within the European Union.

Customs   

In the case of a no deal scenario, as of the withdrawal date, goods entering the European Union from the United Kingdom will be treated as imports and goods leaving the European Union to the United Kingdom 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 European Union under the rules of the World Trade Organisation. The need for customs declarations to be presented to customs authorities, and the possibility to control shipments will also apply.

The Commission adopted the following technical measures on 19 December:

 - A Delegated Regulation to include the seas surrounding the UK in the provisions on time-limits within which entry summary declarations and pre-departure declarations have to be lodged prior to leaving or entering the Union’s customs territory.

- A proposal for a Regulation to add the UK to the list of countries for which a general authorisation to export dual use items is valid throughout the EU.

It is stated to be essential, however, that Member States take all the necessary steps to be in a position to apply the Union Customs Code and the relevant rules regarding indirect taxation in relation to the United Kingdom.

VAT

In case of no deal, existing EU legislation with regard to VAT will continue to apply within the European Union. As of withdrawal date, the rules of the EU VAT Directives relating to third countries will apply in the relations with the UK. This means that, in case of no deal, VAT will be due at the importation in the EU. Goods will be exempt from VAT if they are dispatched or transported to a destination outside the European Union, including, therefore, the UK.

Sanitary/phytosanitary requirements   

In case of no-deal, EU rules in public/animal health areas will no longer apply to the UK. Therefore, the entry of animals and their products from the UK into the EU will only be allowed if the UK is ‘listed’ as an authorised third country in the relevant sectors of EU legislation. On the basis of the EU veterinary legislation, the Commission will – if justified – swiftly ʻlistʼ (subject to a favourable vote of Member States in the competent committee) the United Kingdom, if all applicable conditions are fulfilled, so as to allow the entry of live animals and animal products from the United Kingdom into the European Union.  (The Commission has  noted that the UK Government has issued, on 24 September 2018, a guidance notice on ʻimporting animals and animal products if there's no Brexit dealʼ stating that ʻthere would be no change on the day the United Kingdom leaves the EU to current import controls or requirements for notifications of imports of live animals and animal products for imports direct from the EUʼ.)

The contingency measures announced in the Commission Communication of 13 November 2018 foresee that the UK will be added to the lists for live animals and animal products, subject to providing guarantees that all applicable conditions under the veterinary or sanitary legislation will be fulfilled. In a no deal scenario, the listing of the United Kingdom should enter into force on 30 March 2019.  However, even if the United Kingdom 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, which is a matter of Member State responsibility. The Commission, when approving new or extended Border Inspection Posts in the EU27 Member States, will take account of the flexibilities provided for in the applicable EU legislation.

In case of no-deal, every consignment of live animals and animal products coming from the UK would have to undergo, as of the withdrawal date, checks in Union border inspection posts (BIPs) at the point of entry into the EU.

In case of no-deal, simplified border controls (limited to documentary checks, for instance) will apply to live animals and animal products coming from a Member State but transiting through the UK.

Certain flexibilities are provided for in the applicable EU legislation, e.g. accepting temporary premises for inspection rooms or sharing commercial facilities for the storage of consignments. In order to be ready by 30 March 2019, the new or extended border inspection posts must be proposed by the Member States to the European Commission before 15 February 2019.