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BREXIT – Customs challenges and complying with rules of origin requirements

Following the end of the Brexit transition period, the United Kingdom (UK) officially ceased to be a part of the EU at the beginning of 2021. While the VAT implications ‘solely’ relate to the current classification that is now applied to the UK, namely, a third country (previously Community territory), nevertheless, there are customs challenges that have to be taken into consideration. The focus here is on the interpretation of the procedural rules and the rules of origin requirements in the TCA.

Trade and Cooperation Agreement (TCA)

The Trade and Cooperation Agreement (TCA) between the EU and the UK has been applicable since 1.1.2021. The UK and the EU are third countries in each case. Consequently, since the beginning of 2021, customs declarations generally have to be submitted for exchanges of goods between the EU and the UK. Preferential customs treatment for imports into the EU from the UK (and vice versa) are granted only under specific conditions. 

Please note: While Northern Ireland is part of the UK, nevertheless, it is treated as an EU member for customs purposes. That is why, under an additional agreement, movements of goods between the EU and Northern Ireland are regarded as goods traffic within the EU.

Rules of origin 

Tariff reductions or exemptions from customs duties are only possible in the case of products originating from the territories of the parties to the agreement. In order to be able to claim preferential zero tariff rates, the so-called preferential origin of the product concerned has to be in the exporting country of the EU or the UK – as described in the rules of origin requirements and product-specific rules of origin in the TCA. The goods will then be deemed to be so-called ‘originating products’. 

Please note: A product does not originate in the EU if it was imported into the EU. In fact, it will be necessary to check whether or not, according to the preferential rules of origin, it is a product originating in the EU.

Determining the preferential origin is regulated in the Annexes to the TCA (see Chapter 2 and Annex ORIG-2). 

In order to be able to apply the preferential rules of origin, or to calculate a potential tariff rate, a product would have to be classified. If the product does not satisfy the preferential rules of origin requirements, or if it is not possible to demonstrate this then customs duties will be charged.

Proof of origin


When importing into the EU from the UK (and vice versa) at preferential tariff rates the importers have to explicitly declare that they are able to demonstrate that the goods are of preferential origin. Zero tariff rates may only be claimed if one of the following two conditions has been satisfied:

  • the importer has a declaration of the origin (so-called DOO) of the product that was issued by the exporter (code U116), or
  • Importer’s Knowledge about the origin of the goods exists (code U117).

Declaration of origin (so-called DOO)

The following provisions shall apply for declarations of origin (Annex ORIG-4 TCA):

(1) Issuing a DOO – Any exporter may issue a Declaration of Origin for exports from the EU to the UK if the value of the consignment is €6,000 (currently £5,700) or lower. If the value is higher then the EU exporter has to be a Registered Exporter (REX) and provide the respective number on the declaration.

(2) EORI number – For exports from the UK into the EU, regardless of the value of the consignment, an exporter will have to provide its EORI number on each declaration to EU customers.

(3) Written form requirement – The declaration of origin has to be submitted on an invoice or other commercial document and the originating product has to be described so precisely there that it is possible to identify it. Providing the information on a consignment note is not allowed.

(4) Validity period – A declaration of origin for imports into the UK will be valid for two years from the date of its issue and 12 months for imports into the EU.

Importer’s Knowledge

If the condition of ‘Importer’s Knowledge’ has been satisfied then the exporter or manufacturer does not have to submit a DOO. This makes it possible for the importer to claim preferential tariff treatment based on information that it has received demonstrating that the imported product satisfies the requirements for obtaining originating status. 

Please note: This documentary evidence has to be in the possession of the importer and be available in the event of customs audits. The importer has to have reliable information and the appropriate documentary evidence. If, in a subsequent review, it is not possible to verify the originating status then the third country tariff rate will apply. There would be no rectification possibility (we believe this is disputable). A refund would only be possible within three years if no application was made.

Supplier’s declaration

Irrespective of whether the preferential tariff rates are claimed on the basis of Importer’s Knowledge or on the basis of a DOO, it has to be generally possible to produce suppliers’ declarations to demonstrate preferential origin in the EU or in the UK, i.e., during a customs audit it will be necessary to demonstrate where the individual components of the product originate from. This will not have to be presented during a transitional period lasting until the end of 2021. The importer must nevertheless be certain that the goods comply with the rules of origin requirements. 

Please note: Importers have to make sure that they subsequently receive the suppliers’ declarations. Conversely, exporters have to ensure that their suppliers have provided them with the suppliers’ declarations by 1.1.2022. If EU-based exporters are not in possession of the suppliers’ declarations by 1.1.2022 then they will have to notify the importers of this by 31.1.2022. 

Remission or repayment of duties in the absence of an application

In the event of a failure to file an application for preferential treatment when importing goods then the remission or repayment of duties would be deemed applicable under the following conditions:

  • application filed within three years after the date of the import,
  • importer provides DOO or demonstrates the presence of its knowledge,
  • the product would have had to be viewed as an originating product when it was imported as well as 
  • fulfilment of other requirements in the chapter on origin in the TCA. 

Exception – Low value

No duty will not be charged on low-value consignments worth less than £135 that are imported into the UK. The same will apply for consignments with a value of less than €150 that are imported into the EU. Import VAT will however be charged by both sides. 

Extension of transition period for UK imports

Following an extension, by the British government, of the deadline for customs checks on UK imports to 1.7.2021 on account of supply shortages, importers were initially able to ‘log’ the imports and subsequently complete the actual customs declaration. On 11.3.2021, this deadline was extended so that customs declarations for all UK imports will not have to be immediately completed and the import duties immediately paid prior to 1.1.2022. By contrast, the EU border agencies have not been so generous. They insist on declarations and goods checks. 

Summary: A review of suppliers and customer relationships is imperative. UK suppliers or UK customers are now third country suppliers and third country customers. Besides checking the INCOTERMS, it is necessary to clarify, for example, who will assume responsibility for the transport, the goods insurance, the export declaration or the import declaration. The invoicing process needs to be reorganised accordingly to take account of the features and contents of a third country transaction.

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