Tuesday, 27 August 2019

Calling all fishermen, fish merchants and others in fish export- helping the UK seafood sector be ready for Brexit - what do and don't we know?

Trade in fish and seafood is a global industry: the UK exports around 70% of what it catches, and imports a significant proportion of the fish processed or consumed in the UK.

When we leave the EU on 31 October, the UK’s trading arrangements with the EU will change, and businesses will need to comply with rules and regulations set by the EU. To ensure trade continues as seamlessly as possible, it is vital the UK seafood industry takes steps to prepare for Brexit.

The Department for Environment, Food and Rural Affairs, in partnership with Seafish and the Marine Management Organisation, is hosting a series of events across England to help seafood traders, processors and businesses understand the changes that lie ahead and what they can do to prepare.

• 4th September – Plymouth
• 5th September – Newlyn - venue to be announced soon
• 11th September – Grimsby
• 12th September – Scarborough
• 26th September – Fleetwood
• 4th October – London

The events will contain presentations, face to face discussions and practical demonstrations on a range of topics, including:

• Customs procedures• Food labelling requirements• Export Health Certificates• Catch Certificates• Issues relating to EU workers

Attendees will come away with a clear understanding of the actions they need to take to be ready for Brexit, with an opportunity to discuss these with Defra, Seafish and MMO staff.

The events are open to any individuals or businesses involved in processing and trading fish and seafood with the EU. Registration is on a first come first serve basis and attendees will be notified of venue locations closer to the time.You can register for the events here.

If you have any queries on the events, please contact fishEUexit@defra.gov.uk

Brexit Background:

All UK exporters of seafood to the USA must provide information on the origin of the fish and fish products they export by Monday 2 September 2019.

UK seafood exporters to the USA need to complete this form to provide seafood origin details, which will allow Defra to add the information to the US Government's official List of ‘Intermediary Nations and Products’. This list sets out fish and fish products which are imported into a country for subsequent export to the USA. The list will allows the USA to identify and notify countries that may be importing and re-exporting fish and fishery products from a fishery that is subject to an import prohibition under these new trade rules.

Data must be entered into the form for each product (i.e. per commodity code) exported. Seafood businesses which may be considering exporting their products to the USA in the future are also recommended to complete the form. The data will be supplied to the US Government via Defra.

There are limited opportunities for the UK to amend the USA’s official ‘List of Intermediary Nations and Products’. Failure to provide the relevant information may lead to inaccuracies in the UK data which may therefore affect the acceptability of seafood exported from the UK to the USA in future.

What questions might be put to the panel?

Over the last three years more questions than answers have been raised as we head towards Brexit - what kind of Brexit the UK gets will determine which of these questions and which answers will be most relevant. If we leave either without a deal or with any deal that involves leaving the Customs Union and the Single Market then from 31 October UK fishing vessels landing fish or shellfish in the UK for export will face significant changes - it will not be business as usual.

Sarah Adkins, a solicitor with nearly fours years’s experience in advising on Brexit, has been trying to make sense of where the industry stands with regard to the exportation of fish - especially here in the south west where up to 90% of some fish species caught are exported across the Channel and beyond. The Single Market enables businesses located within it to sell to each other without regulatory checks because of the level playing field in environmental, employment, health and safety and other standards together with mutual recognition by member states of qualifications and standards in each other’s countries. No third country, as the UK will become, can enjoy this unless it is a member of the European Free Trade Association and either accepts all four freedoms of the internal market as a member of the European Economic Area (Norway, Iceland and Lichenstein) or has multiple bilateral agreements with the EU that in effect incorporate the four freedoms (like Switzerland). The EFTA countries are outside the EU customs union and so customs checks are required at EU borders. EFTA countries do not benefit from the EU’s international agreements. The rules to which Brexit UK will be subject when exporting to any EU and EFTA countries are the rules that the UK itself currently applies to imports from third countries.

Defra regularly updates its online advice to exporting and importing fish if there’s a no deal Brexit: . It should be noted that the vast majority of these requirements will apply to exporting fish even if there is a deal, unless the UK remains within the EU internal market like Norway. Some of the many questions, issues and uncertainties that need clear answers, guidance and action are set out below:

1. EU law prohibits the import of products of animal origin from non-EU establishments that have not been included on the Non-EU list of Approved Establishments. George Eustace MP has advised that the EU will add the UK to the list of approved exporting third countries once it leaves the EU. The UK needs to approve establishments and notify them to the EU. The process is set out here. The Food Standards Agency is currently supporting Defra in collating a list of establishments to notify to the EU. Although the UK already has a list of approved establishments as an EU member this will not automatically convert in to the list for submission to the EU and does not include establishments that wish to export to the EU in the future. All establishments involved in preparing fish and fish products for export to the EU need to be listed. Sea fishing vessels do not need to be listed unless they are factory or freezer vessels. For further information on how to ensure establishments are listed see. In the event of a no deal Brexit no food of animal origin, including fish, could be exported to the EU until ten working days after publication of the amended approved list on the DG SANTE website. What support will be available for the fishing industry in the event that establishments sending e.g. Newlyn fish to the EU are not authorised to export before 31 October?

Amendment: I had understood that the EU approval of the UK as a third country exporter had been made and would simply await whatever Brexit date. However, that is not the case. The approval expired in June 2019. The UK’s application for re-approval was to have been considered on 11 October but that this has been postponed and no new date yet set. So, yet more uncertainty for UK food exporters: https://twitter.com/allierenison/status/1166730222064013313?s=12.

2. Most fish consignments (except for e.g. freshwater fish, cuttle fish, squid and molluscs) require a catch certificate to submit via Traces: https://www.gov.uk/guidance/create-a-uk-catch-certificate. The UK catch certificate issuing office is only open Mon - Fri 9-5. Once the catch certificate has been sent to the EU importer they will be responsible for forwarding it to the the relevant authority and to comply with the specified minimum notice periods prior to import. What effect will this have for the operation of the fish markets and and timing of landings?

3. Unlike exports to the EU from Norway and Iceland, all UK exports of produce of animal origin, including fish, will require sanitary and phytosanitary (SPS) checks and prior notifications, via EU importers, to Border Inspection Posts. An approved inspector will need to seal each consignment before signing an Export Health Certificate for it. UK approved issuers of EHCs for specific export categories are on this list: https://www.gov.uk/government/publications/find-a-professional-to-certify-export-health-certificates/professionals-in-england-scotland-or-wales-who-can-certify-export-health-certificates. Cornwall Council provides guidance: https://www.cornwall.gov.uk/health-and-social-care/food-safety/export-health-certificate-ehc/ - note the current 3 - 5 day EHC application process. There will be charges for the inspections and local authorities can charge for the issue of each EHC. For example, Cornwall Council’s charges: https://www.cornwall.gov.uk/health-and-social-care/food-safety/export-health-certificate-ehc/. A new EHC process is due to be launched in 2019. When will this be available, what will the costs be and how much faster will it be than now? Since specified EHC checks are also required to be undertaken at the EU port of import, even with block EHCs and a new system in place how long is it likely to take for produce to get from a UK fish market to an EU market?

4. All exports will need to enter the EU through a Border Inspection Post. Many EU Channel ports have been upgraded to provide Border Inspection Post facilities and the Commission has approved these for specific products: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019D0607&from=EN. Roscoff will become a Border Inspection Post but will not be authorised to handle live animals. This means that the Plymouth - Roscoff freight ferry route will not be open to live shellfish exports (NB there are some differences in the export processes for fish and shellfish as the latter are live animals). Alternative routes now exist via other French ports such as Cherbourg. Information on exporting to France is available here: https://www.gov.uk/government/publications/french-customs-guidance-after-brexit. Have the implications of this for the supply chain been understood and discussed with EU27 importers?

5. Queues at the EU entry ports will be managed through ferry companies prohibiting boarding at UK ports by any lorry that does not have the correct paperwork for every consignment in its load. There are often many consignments in a single load. The Road Haulage Association has reported that if trade remains at current levels a large haulier would need to process several million additional forms per week. One way of minimising delays is for an exporter to engage the expertise of third parties such as Authorised Economic Operators (providing the EU recognises the UK qualifications for these roles). Owing to the extensive use of non-disclosure agreements by the Government many of the issues identified by businesses, ports and operators with understanding of export processes have been kept out of the public eye. 

However, the Road Haulage Association (RHA Brexit Policy) and the Freight Transport Association (FTA Brexit Policy) have a lot of information about export processes available on their websites. Have fish exporters from Newlyn identified agents with the necessary expertise to assist with the new paperwork for each consignment?

6. EU importers will face a lot more red tape to import UK produce. Importers are responsible for giving specified days/hours advance notice of imports once they get both the catch certificate and the separate EHC form. Importers will be responsible for paying for SPS checks at the EU Border Inspection Post and for any tariffs. EU importers who have not previously imported from outside the EU will need to register with their own country’s authorities and obtain an EORI number. UK exporters should check the terms of the contracts they use for trade with EU27 businesses. These may place responsibility for EU entry costs and tariffs on the exporter either directly or via reference to INCOTERMS.

7. Leaving the Single Market adds red tape to every layer of EU trade, so as well as the need to understand the extra bureaucracy for fish it’s important to understand that there are significant changes for hauliers, insurers, data transfers and so on. The UK chemicals sector is particularly impacted by Brexit so any businesses relying on particular chemicals should contact their supplier. This applies more generally to all EU imports. Have exporters discussed the implications of the new requirements with all other parties involved in the trade process?

8. From 31 October 2019 (or later Brexit) UK fishermen will lose the right to access all EU (including Irish) and EEA (including Norwegian) waters as well as over 70 EU agreements with other countries regarding access to fishing waters and sustainable stocks. In addition, around 30% of UK total exports are to non EU/EEA countries under EU trade facilitation arrangements for which no continuity has been agreed. A number of these are relevant to fish exports so exporters should, check whether or not they will be able to continue to export on current terms. The Department for International Trade has a form for use by businesses with Brexit enquiries: https://www.great.gov.uk/eu-exit-news/contact/?_ga=2.268559474.242181928.1566895407-1223614390.1377702940. For fish exports to countries that require export health certificates it will be necessary to check on a country-by-country basis whether UK establishments will continue to be approved exporters. For example, many countries (including China) stipulate that UK establishments must be approved under EU Regulation 853/2004, which will no longer apply to the UK from 31 October: https://www.gov.uk/export-health-certificates. It is understood that Defra is seeking to update EHCs in discussion with other countries.

9. All UK importers and exporters are required to have an Economic Operator Registration and Identification (EORI) number. HMRC has just announced that all VAT registered UK businesses will be issued with an EORI number if they do not already have one. Businesses that are not registered for VAT must ensure that they have an EORI number. These are easy to apply for on line and essential to have for all importers and/or exporters: https://www.gov.uk/eori.

10. The EU has published Brexit Preparedness Notices in which further information can be found: https://ec.europa.eu/info/brexit/brexit-preparedness/preparedness-notices_en. These include advice on fisheries: https://ec.europa.eu/info/sites/info/files/file_import/fisheries_and_aquaculture_en.pdf and movements of live animals (including shellfish): https://ec.europa.eu/info/sites/info/files/file_import/movements_of_live_animals_en.pdf

Advice to EU fishing sectors in the event of a no deal Brexit is available here, in section 5: https://ec.europa.eu/commission/presscorner/detail/ga/ip_19_2052

In summary, under a no deal Brexit on 31 October the UK will lose all of the benefits of the Single Market on which 46% (£289bn) of UK exports and 54% of imports relied in 2018 (Statistics on UK-EU trade - Parliament 

UK https://researchbriefings.files.parliament.uk › CBP-7851 › CBP-7851) as well as hundreds of EU international agreements and arrangements covering another 30+% of trade (e.g. https://ig.ft.com/brexit-treaty-database/ and https://europa.eu/european-union/topics/trade_en). Interpreting the information released by the Department for International Trade (https://www.gov.uk/government/publications/uk-trade-agreement-continuity-statistics-and-analysis/uk-trade-with-trade-agreement-continuity-tac-countries-statistical-ad-hoc-release) it seems that the UK has secured trade continuity agreements for 63% of 10.7% of all UK trade but on worse terms than now for over 80% of this, largely owing to the loss of Single Market elements such as in the UK/Norway trade continuity agreement.

It is to be hoped that the forthcoming events held by the Department for Environment, Food and Rural Affairs, in partnership with Seafish (which also provides information at: https://www.seafish.org/article/preparing-your-business-for-eu-exit) and the Marine Management Organisation will have answers to all of the above questions, concerns and many more issues.

Amendment: I had understood that the EU approval of the UK as a third country exporter had been made and would simply await whatever Brexit date. However, that is not the case. The approval expired in June. I understand that the UK’s application for re-approval was to have been considered on 11 October but that this has been postponed and no new date yet set. So, yet more uncertainty for UK food exporters: https://twitter.com/allierenison/status/1166730222064013313?s=12