The Ministry of Economic Affairs and Climate Policy commissioned KPMG and Meijburg & Co to prepare this Report.
The Brexit departure date, March 29, 2019, is quickly approaching. At this point in time, the shape of the future trade relationship between the EU and the United Kingdom (UK) is still unclear however. The longer this ambiguity remains, the less time there will be for businesses and regulatory bodies to prepare themselves for the new situation. The businesses that were surveyed for the Ministry of Economic Affairs all indicated that the current ambiguity means they have not been able to do much in the way of preparing themselves for Brexit. We not only heard this from the businesses we surveyed, but many of our clients are saying the same thing. Despite this uncertainty, it is important that businesses ensure they investigate the potential impact of Brexit on their organization in good time.
How many shipments are sent to or arrive from the UK each year? What type of goods are involved? Do additional measures apply to these goods? How are the goods dispatched; in large consignments or in small shipments addressed to individual customers? The implementation of mitigating measures is very time-consuming. Waiting to take action until Brexit is almost a fact, will mean that businesses will be pinched for time and it may then be too late to implement possible solutions. Such an analysis is therefore easily performed and does not have to wait for the outcome of the negotiations between the United Kingdom and the European Union.
The survey shows that import and export costs will, in any case, each year increase by EUR 387 million to EUR 627 million. This is excluding customs duties and VAT expenses that have still be calculated and as yet unknown sector-specific market entry requirements. Specific requirements per sector include having to obtain phytosanitary and veterinary certificates and having these inspected, CE marking obligations or obligations arising from REACH regulations.
There is a risk that EU and UK requirements and standards will diverge after Brexit. It is still unclear precisely how this will pan out. The survey identified potential consequences, but their costs have not yet been translated into figures. For example, the business sector expects that supply chains will have to be redesigned as a result of Brexit. The one-off costs for this are expected to be far more than the cost estimates in the survey.
Lastly, one important consequence of Brexit is the creation of new external EU borders in the Netherlands. This will create a significant additional burden on government organizations such as Customs, NVWA (Netherlands Food and Consumer Product Safety Authority) and KCB (Quality Control Bureau). Much of the physical trade with the UK is by ferry across the North Sea. The current infrastructure in the ports where the ferries berth, both in the Netherlands and in the UK, is not yet suitable to act as an external border. Important in this respect is the physical space needed for car parks and waiting areas for motor vehicles and trucks.