If you’ve been following UK politics and Brexit news in the last few weeks, you might be familiar with the phrase ‘Windsor Framework’, which has been in the headlines rather a lot. In particular, since UK MPs passed the bill by 515 to 29 votes on Wednesday, March 22nd.

To spare you endless jargonese, we’ve produced an 850-word summary of it in layman’s terms.

We’ll explain what the Windsor Framework is, why it’s important, and who might benefit from it.

To begin: what is the Windsor Framework?

This is a legal agreement that was revealed by the UK Government on February 27th, 2023. It is chiefly designed to alleviate the disruption caused by the post-Brexit Northern Ireland Protocol, which critics argue has undermined trade between Northern Ireland and Great Britain since it took effect on January 1st, 2021.

Why is the Windsor Framework such an important milestone for Brexit?

• It should prevent a hard border between Northern Ireland and the Republic of Ireland

Although a hard border was already averted under the Northern Ireland Protocol, businesses faced higher costs and more bureaucracy due to ‘burdensome customs processes, inflexible regulation, tax and spend discrepancies and democratic governance issues.’ The Windsor Framework is thus regarded as a long-term solution that eliminates the possibility of a hard border on the island of Ireland.

• Facilitate faster movement of goods between Northern Ireland and Great Britain

The Windsor Framework is expected to substantially reduce the number of checks and controls on the movement of goods between Great Britain and Northern Ireland. This will be welcome news to businesses that have endured disruption since Brexit took effect.

Who may benefit the most from the Windsor Framework?

• Trusted traders will benefit from significantly lower customs declaration costs

The Windsor Framework permanently enables the free movement of goods between Great Britain and Northern Ireland, removing any sense of a border in the Irish Sea. It also expands the ‘green lane’ (the UK’s internal market scheme) to cut out time-consuming, costly customs processes and checks for businesses recognised as ‘trusted traders’.

UK businesses selling goods destined for Northern Ireland can become ‘trusted traders’ by proving to HMRC that their goods are not at risk of being moved to the EU and becoming subject to EU duty. These businesses must also meet all the necessary customs compliance requirements, and others, such as systems and controls, which you can learn more about on the UK.gov website here.

For companies involved in manufacturing and processing, the turnover threshold for moving goods that will stay in Northern Ireland has quadrupled from £0.5 million to £2 million. Thus, this expands eligibility to about four fifths of manufacturing and processing companies in Northern Ireland that trade with Great Britain. But firms above this threshold will still be eligible to move goods if they are to be used for animal feed, healthcare, construction or not-for-profit sectors.

• Researchers and scientists could have access to the Horizon Europe Programme

This is a 95-billion-Euro funding programme for research and innovation in Europe, afforded to countries in the EU and associated countries, the latter of which would apply to the UK. Funding is open to all organisations interested in engaging in ground-breaking research, new technology, or other projects to support climate change mitigation and improve food security.

• The agreement could decrease the likelihood of a trade war between the UK and the EU

If the UK refused to agree a Brexit deal, the EU could retaliate by suspending the Trade and Cooperation Agreement. As you can imagine, this would be very disruptive for UK businesses, especially those that trade heavily with EU member states. Fortunately, the Windsor Framework renders this outcome highly unlikely.

• The UK’s financial services sector could benefit from a new UK-EU Financial Regulatory Forum

The executive body of the EU revealed earlier this month its intention to finalise a Memorandum of Understanding (MoU) on financial services regulatory cooperation. Since Brexit, London has faced stiffer competition from EU financial hubs such as Amsterdam, Europe’s top share-trading venue in 2022, and Frankfurt, continental Europe’s leading financial centre in 2021. It is hoped the new forum could repair and potentially strengthen UK-EU relations in the financial sector, which in 2021 contributed roughly £174 billion to the UK economy – more than 8% of national economic output.

• VAT could become more flexible for UK businesses

UK businesses will be allowed to charge reduced VAT rates on goods supplied and installed via immovable property. The UK will also be free to reduce VAT rates for a broader range of goods than is currently permitted under EU law. For example, the UK Government claims the Windsor Framework would save 2,000 Northern Ireland businesses from having to register for VAT under a 2025 EU Directive.

• There could be a new UK-specific marketing authorisation and labelling system for medicines

The UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) could assess all medicinal products destined for the UK. Those that comply with UK laws could be labeled ‘UK only’ and could be moved freely between Great Britain and Northern Ireland. The UK Government also claims the Windsor Framework ‘safeguards frictionless access to the EU market for world-leading Northern Ireland pharmaceutical and medical technology firms’.

• Agricultural foods, such as pork and milk, will have reduced checks.

This could benefit supermarkets and other food retailers, whose products will no longer be subject to physical checks and tests. Visual inspections should be drastically cut from 100% to 5%.

When is the Windsor Framework expected to be implemented?

Parts of the agreement could take effect by May 2023, but it may not be fully operational until 2025.

It is also highly likely that there will be further negotiations and amendments to the Windsor Framework in the coming months and years.

How can you stay up to date with all things Brexit?

Follow us on LinkedIn to read more expert analyses on Windsor Framework and other Brexit news.

Or get in touch with Arjen or Maartje, who will be happy to assist you.

Contacts

Arjen Odems, odems@cutraco.com

Maartje Meijer, meijer@cutraco.com

Whilst 2023 is already well underway, it is important to consider the important milestones relating pending UK import and export measures that 2023 holds.

These milestones should be considered and addressed appropriately to avoid disruption of trade flows in and out of the UK. CDS export Exporters will have more time to move across to the new Customs Declaration Service (CDS).

The planned date of the 1st April 2023 no longer applies and traders now have until 30th November 2023 to continue using the CHIEF system for export declarations. CDS for exports will be introduced in a phased approach and the key phases are: › From late February 2023 – export declarants that only move goods through ports in the UK that use the Goods Vehicle Movement Service (GVMS) – also known as non-inventory linked ports.

› From May 2023 – export declarants that currently use the National Export System (NES) web service to submit export declarations on CHIEF

› From September 2023 – export declarants using inventory-linked ports and DEPs

› From 30 November 2023 – All export declarations must be made using CDS Import controls The Government previously announced that the changes to import controls on certain products coming from the EU would not be introduced on 1 July 2022 as planned. These import controls now have a target launch date of end of 2023.

The list of controls that are now planned to be introduced by the end of 2023 is:

› A requirement for safety and security declarations on EU imports

› A requirement for health certification for further Sanitary and Phytosanitary (SPS) imports

› A requirement for SPS goods to be presented at a Border Control Post (BCP)

› A requirement for SPS currently at destination to be moved to a BCP

› A requirement to issue Certificates of Inspection (COI) for organic imports

› A requirement for organic imports to be presented at a BCP

› Prohibitions and restrictions on the import of chilled meats from the EU

UKCA marking

The UKCA marking is the product marking used for products being placed on the market in Great Britain. The UKCA marking applies to most products for which the European CE marking could be used and would have become required per 1 January 2023.

To provide businesses with some flexibility, the UK government will bring forward legislation that continues to allow recognition of the CE marking for most goods that are being placed on the market until 31 December 2024.

It should be noted that UKCA marking is already available and can be used.

Conclusion

Importers of products from the EU currently benefit from the relative flexible UK import controls measures, at least until the above listed restrictions come into play. It is however pertinent that the UK and EU come to some sort of mutual recognition on the import controls topics to ensure a continuation of the market access for all goods.

With the agreement on 27 February 2023 relating the Northern Ireland situation (The Windsor Framework), the EU and the UK have made a first step to a closer relationship.

The expectation is that this also opens up the opportunity for further cooperation on some of the above mentioned topics, including the import controls. Nevertheless, the expectation is that some of these topics will not be resolved before the provided timeframes and further disruptions and increase in cost for doing business in the UK are still expected.

Contacts

For any questions, please feel free to contact:

Arjen Odems, odems@cutraco.com

Maartje Meijer, meijer@cutraco.com

Dutch Customs is replacing the existing customs declaration services (AGS) with a new system called DMS. This is due to new legislation and regulations from the EU and is based on the EU Customs Data Model for digital customs declarations.

The initial plan was that DMS would be available for operators in the Netherlands in the course of 2022, but due to a number of issues this has been postponed. AGS will be phased in and for import and export declarations will remain available until 30 November 2023, whilst AGS for special procedures will remain available until 31 December 2023.

We note that NCTS will continue to exist alongside DMS. Declarations for the transit procedure can only be made in NCTS.

Key changes in DMS:

The data set in the customs software solution needs to be updated and communication protocol needs to meet the new standards. This also means that traders need to provide additional details in order for the customs declarations to be lodged and accepted.

Historically, Dutch Customs was able to make changes/edits in the customs declaration in the event of findings resulting audits of the declarations (e.g. for random checks upon entry). With DMS, this is no longer possible and the clearing agent and/or the trader will receive a ‘message’ reflecting the findings. 

The clearing agent and/or the trader are subsequently responsible to make these amendments in the lodged declarations or appeal the findings. 

This could potentially lead to delays in releasing the shipments.

The common practice in the Netherlands for simplified declaration procedures, entry into the declarants records, and filings for customs warehousing, inward processing relief, etc. (commonly referred to as the GPA and SPA) will disappear and will be replaced by filings into DMS. 

This means that companies currently using the GPA and / or SPA will need to ensure that the relevant data elements are lodged via DMS on a complete and timely manner.

Planning and timelines

DMS will be introduced in a phased approach. The intention is that the first couple of clearing agents will transfer to DMS on a pilot basis in the first and second quarter of 2023. Subsequently, companies that are filing customs declarations will receive notification from Dutch Customs regarding the transfer onto DMS, including suggested timelines.

The current end-date for transfer from AGS to DMS is set at 30 November 2023 for normal declarations and 31 December 2023 for current GPA and SPA filings. This indicates that Dutch Customs will no longer accept customs declarations via AGS after the mentioned dates.

Conclusion

Dutch customs encourages customs clearing agents and traders that lodge declarations themselves to work more real-time. Robust customs processes are therefore becoming even more important and the importance of IT support becomes increasing significantly.

If businesses want to smoothly start lodging declarations via DMS, it is pertinent that they actively and timely engage with the DMS migration process and organise their IT structure to ensure they are prepared to lodge declarations on a daily basis, or provide the information to their declarant who will lodge the declarations on their behalf.

Contacts

For any questions, please feel free to contact:

Arjen Odems, odems@cutraco.com

Maartje Meijer, meijer@cutraco.com