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Brexit - Implications for German trading partners

Austritt Großbritannien aus EU - mit Schilder

What Brexit means for German trading partners and why they are rightly insecure

Since January 31, 2020 it is official: The United Kingdom has left the European Union (EU). Until the end of 2020, Great Britain is in a transitional phase according to the exit agreement. After that, from January 1, 2021, the United Kingdom will not be part of the internal market, the customs union, or the EU. (Status quo)

From a German perspective, the United Kingdom is the third largest export market for German companies (after the USA and France). If no other agreement is concluded during the transition phase, trade between Germany and the United Kingdom will in future be subject to the rules of the World Trade Organization. This would mean that the UK would have to be treated as a third country in terms of customs and export control law.

This would have far-reaching consequences for multinational companies with production sites in the UK. Where in the past goods and semi-finished products were imported from Germany to Great Britain, or from Great Britain to Germany, customs declarations would suddenly be required. Border controls are being re-established and import and export duties are levied based on foreign trade master data and customs tariff numbers.

The Brexit also means that Great Britain must be treated as a third country in terms of export control law. Accordingly, deliveries are suddenly no longer just shipments but exports, which creates new licensing requirements in the following areas:

  • Dual-use goods
  • Goods covered by the anti-torture regulation
  • Trafficking and brokering as well as technical assistance

The United Kingdom is still aiming for a free trade agreement with the EU to avoid a hard exit. However, the extent of the Brexit on the UK export market is not yet fully tangible. German trading partners must be prepared for all eventualities and must maintain their material master with correct customs tariff numbers or have them maintained.

Federal Statistical Office (Destatis)
Federal Office of Economics and Export Control (BAFA)