British-EU Brexit agreement.. Checkpoint for domestic export companies

[이데일리 김영수 기자] As the UK and the European Union (EU) concluded negotiations on Brexit (the UK’s withdrawal from the EU) including negotiations on future relations including a free trade agreement on the 24th (local time), domestic export companies will face new changes from January 1st next year. do.

Customs and FTA

First of all, Korean companies that export directly to the UK or EU are likely to have little impact. This is because the Korea-English FTA is officially signed on August 22, last year, and the preferential trade relationship between the Korea-English FTA continues even if the transition period ends with the no-deal Brexit. Accordingly, in the case of direct export to the UK, administrative review issues arising from the transition to the Korea-English FTA should be checked.

For EU exports via the UK, preferential tariffs for the Korea-EU FTA are not recognized for diesel exports other than simple transshipment and temporary storage of single consignment cargo. For exports to the UK via the EU, preferential tariffs for the Korea-English FTA on exports of not only the single consignment of the Korea-English FTA, but also some diesel exports that meet the requirements, are recognized for a temporary period of 3 years.

In the case of export from EU local production plants to the UK, EU origin recognition and preferential tariff levels of products produced at local factories are determined according to the concluded UK-EU future relations agreement. Accordingly, in order to recognize EU origin, it is necessary to convert some of the parts procured from Korea or outside the EU to domestic production. This is because the higher the proportion of Korean-made parts used in automobiles, related parts, and machinery that apply the value-added standard, the final product may not be recognized as domestically produced in the EU.

Transportation and customs clearance

Even if the negotiations on future relations are concluded, as the offshore customs clearance procedure between the UK and the EU is revived immediately after the end of the implementation period, it is necessary to prepare for delays in customs clearance. In the UK, EU imports, which account for 49.1% of total imports (302.2 billion euros (approximately 406 trillion won) out of 616 billion euros (approximately 830 trillion won) in 2019, are converted to offshore customs clearance. This is because this is expected to be inevitable.

In addition, when exporting to the EU and the UK at the same time, separate shipments from transit countries are not recognized, so they must be packaged and shipped separately.

Regulation, testing, certification, etc.

From January 1 of next year, immediately after the end of the implementation period, separate regulations and legal systems are applied in the EU and the UK respectively.

Depending on the certification and testing institution’s location, the validity of existing certifications and certifications may be an issue. In fact, the EU will not recognize the validity of the CE certification, which has been evaluated by a British accredited body after the end of the implementation period. The UK also announced its own UKCA certification, which replaces the CE certification, but plans to recognize the effectiveness of the CE certification, which has been temporarily evaluated by an EU accredited body by the end of next year. Accordingly, detailed changes should be checked after the end of the implementation period on the website of the EU and UK governments.

對 Review of FTA origin of EU and UK imports

Even if the existing imports were subject to the Korea-EU FTA preferential tariffs, it should be noted that after the end of the implementation period, they may not be recognized as preferential origin under the Korea-EU FTA or Korea-English FTA depending on the inclusion ratio of British parts and EU parts. do. In addition, it is necessary to reconsider whether the FTA’s country of origin criteria is met by checking the proportion of imported goods made in the UK and EU.

In addition, EU anti-dumping of electrical steel sheets, steel ropes and cables, as well as EU safeguard measures of 19 out of 28 steel items, will be taken over by the UK, so the relevant matters should be checked.

▲ Checkpoints for domestic export companies in preparation for the end of the implementation period. (Source = Trade Association)

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