8th January 2021

Chambers Ireland publish EU-UK FTA Information Sheet

EU-UK FTA Information Sheet

January 2021

As of 1 January 2021, the UK is now regarded as a ‘third country’ outside of the EU. The EU and the UK have formed two separate markets; two distinct regulatory and legal spaces. This will create barriers to trade in goods and services and to cross-border mobility and exchanges that did not previously exist – in both directions.

The long awaited EU-UK Free Trade Agreement (FTA), known as the ‘EU’UK Trade and Cooperation Agreement’, was finalised on 24 December 2020, coming as a significant relief to the many businesses who will continue to trade with the UK. While this is good for relations and reduces some costs involved, this FTA is fundamentally
different to the freedoms enjoyed when the UK was a member of the EU and the Single Market (1)

The EU-UK FTA goes well beyond traditional EU FTAs (such as with Canada or Japan) by providing for zero tariffs and zero quotas on all goods that comply with the appropriate rules of origin (2) This ensures that the trade preferences granted under the Agreement benefit UK and EU businesses rather than third countries, preventing circumvention (3).

The full text of the Agreement has yet to be released as it is pending ratification of all 27 EU member states and the European Parliament. As such, many of the specifics have yet to be known. However, a useful overview of the 4 pillars of the Agreement can be accessed here.


1. It should also be noted that the entry into application of  the FTA is a matter of special urgency. As the negotiations were only finalised at a very late
stage before the expiry of the UK’s transition period, and the need to allow the European Parliament sufficient time to democratically scrutinise the
deal, the Agreement will be applied on a provisional basis, until 28 February 2021.
2. It should be noted that the deal does not extend to services.
3 To facilitate compliance and cut red tape, the Agreement allows traders to self-certify the origin of goods and provides for ‘full cumulation’ (meaning
traders can account not only for the originating materials used, but also if processing took place in the UK or EU).


Some specifics that are known to be contained in the Deal

  1. Rules of Origin & Certificates of Origin
    It is important to note that HMRC is not requiring certificates of origin for goods moving between the EU and UK. Tariffs will not be applied to goods that are either “wholly obtained’” from the UK or EU, or “substantially
    transformed” in the EU or UK.
    • Companies can assess whether their products satisfies these requirements on the Commission’s My Trade Assistant platform.
    • For goods imported to benefit from this duty-free treatment, exporting companies must make a claim for
    preferential treatment. The claim has to be based on a statement of origin, made out by the exporter, stating
    that the product qualifies for preferential treatment. It is up to the exporter to make sure that the conditions
    are met to issue a statement of origin and that the information provided is correct.2. VAT
    • From 1 January 2021, imports of goods and subsequent supplies of goods from UK to an EU Member State
    will be subject to VAT in the Member State concerned, at the rate that applies to the same goods in that Member State.
    • VAT will be payable to customs authorities at the time of importation, unless the Member State of
    importation allows import VAT to be included in your periodical VAT return. The taxable amount is based on the value for customs purposes plus the cost of other charges, taxes and duties incurred by the importation itself.

• Goods being exported to UK will generally be exempt from VAT, although you must be able to prove that the goods have left the EU. Member States generally base this proof on the exit certification given to the exporter by the customs office of export
• The EU has, as a result of Covid-19, delayed introducing a scheme that will require platforms to collect and
account for VAT on behalf of sellers until 1 July 2021 – although, as detailed below – it has come into operation for those sending from the EU to UK since 1 January 2021.

See the Commission’s guidance for more information on VAT rules that apply to goods.

3. Importing from a Third Country through the UK

Example scenario: A business in Ireland imports goods from China through a UK distributor. The Irish business pays import duties in the UK. What should the Irish business be aware of when importing those goods into Ireland?
• Import duty is based on the origin of the goods; where they were manufactured, not where they were purchased. Goods purchased wholesale from China and resold from a separate entity in another country would still be classified by Customs as Chinese goods. In the case that the product is shipping physically from China to the UK and then onto Ireland, the Irish business may be liable to pay customs duties twice.
• In order to avoid this, it may be worth looking into, for example, customs warehousing in the UK and at other options to source this product through a European supplier/distributor or directly from the Chinese supplier.

Further information on this is available from Enterprise Ireland.

4. EU-Northern Ireland Trade
• From 1 January 2021, the Protocol on Ireland and Northern Ireland applies and EU rules for customs, VAT and excise duties continue to apply to all goods entering and leaving Northern Ireland from/to the EU. This means that the rules that apply to the movement of goods between two EU Member States will also apply to goods moving between Northern Ireland and an EU Member State, and vice versa.
• For customs, the Protocol means that:
– There will be no customs formalities for goods moving between Northern Ireland and EU Member States
– EU customs formalities will apply to goods entering or leaving Northern Ireland to/from the rest of the world, including the UK. There are exceptions with regard to this for goods considered at ‘no risk of subsequently being moved into the Union‘, i.e. those that will not enter the EU Single Market
– Checks and controls will take place on food and live animals entering Northern Ireland from third countries, including the rest of the UK, to make sure they adhere to the EU’s sanitary and phytosanitary (SPS) requirements
– Checks and controls will also take place on goods subject to any other prohibitions and restrictions listed in the Protocol and on goods entering Northern Ireland from third countries, including the rest of the UK to make sure they comply with the relevant rules.
EU-UK FTA Information Sheet

Useful tools for advice and further information
Government/State Agency Advice & Information
• DBEI : Brexit Information Resources Brexit Information Resources
• Enterprise Ireland:  Brexit Readiness Checker
• Enterprise Ireland:Currency Impact Calculator
• Enterprise Ireland:  Customs Insight Online Course
• Local Enterprise Office: Brexit Mentor Programme
• Local Enterprise Office: Brexit Supports for your SME
• InterTradeIreland: Brexit Advisory Service
• InterTradeIreland: Tariff Checker
• InterTradeIreland: Brexit Digital Content
• Competition and Consumer Protection
Commission Guidance
• Skillnet Ireland: Clear Customs Training

Resources – Useful Contact Information
Revenue (available 24/7)
(01) 738-3685

Microfinance Ireland
(01) 260-1007

Health and Safety Authority
1890 289 389
Enterprise Ireland
(01) 727-2727

Skillnet Ireland
(01) 207-9630

National Standards Authority
(01) 807-3800

Local Enterprise Offices
Department of Agriculture, Food
and the Marine
(076) 106-4443
Competition and Consumer
Protection Commission
(01) 402-5555

(048) 3083-4100
Department of Enterprise, Trade
and Employment
(01) 631-2121

Health Service Executive (HSE)
(041) 685-0300
IDA Ireland
(01) 603-4000
Bord Bia

Food Safety Authority of Ireland
(01) 238-4000

Fáilte Ireland

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