Firstly, we apologise for the brevity of this statement but such is the nature of Brexit, many issues and situations have yet to present themselves fully. If you have a particular concern please contact us.
The UK is due to leave the European Union on 29th March 2019, negotiations between the UK government and the EU are currently on-going. However, the decision to leave the Customs Union is very likely to be extended with a 21-month transition period until 31st December 2020 (the transition period is dependent upon the EU and UK agreeing a full withdrawal treaty before March 29th 2019).
The decision made by the UK to leave the European Union, or ‘Brexit’ as it has become known, means that we must embrace the challenges and opportunities that this decision will bring. In order to ensure that our business is sustainable, we have put into effect a number of strategies which will ensure the strongest possible outcome for our company and its customers as the transition away from EU membership takes place.
We recognise that as Brexit unfolds a number of parties will be concerned, including our customers, European based suppliers and generally all stakeholders in the company. Equally, within our own organisation employees are keen to find out what the future has in store. We have therefore considered and continue to plan for the potential impact of changes to tariffs and customs borders, the potential impact on our costs (administrative workload and our employees), and also the effect of increased volatility of exchange rates.
Review of Supply Chain.
We have undertaken a review of our supply chain for components and raw materials to mitigate the impact of any major changes following Brexit and explored possible changes needed to our policies and processes. Steps have been taken to mitigate any potential risks concerning EU citizenship of any members of our staff. As a company well versed with the demands of international trade, we have every confidence in the skill and expertise of our administrative staff and their understanding of export procedures to be able to cope with any changes necessitated following Brexit.
Currently we are undertaking a review of our agents and distributors contracts to ensure that they are relevant.
Tariffs, Legislation, Customs and Delivery.
The majority of our parts purchased are produced in UK, Europe and Asia. The parts imported from mainland Europe and non-EU countries come via a well-established process and robust supply chain.
We have started the implementation of contingency plans to mitigate the effects of any potential delays in customs clearance for products imported from mainland Europe. Where it is feasible to do so, we are optimising stock levels of certain parts. Most of the companies which currently transport our goods in and out of the UK are already EU registered.
With regards to the issue of legislation and standards, the burden of regulation compliance on business is already a significant one. As a contract manufacturer for companies shipping goods all over the world we already comply with and maintain regulatory standards that are not only industry specific but territory specific.
In the event of road blockages following Brexit, European Circuits would use alternative routes wherever possible to enable deliveries to continue as normal. Where normal deliveries are not possible emergency deliveries can be requested and reasonable endeavours will be made to meet these.
No Deal Brexit.
The government is currently advising that in the event of a ‘no deal’ Brexit, all goods imported from the EU will be subject to the same requirements as third country goods, including the payment of duty. The government will determine and publish the new duty rates prior to leaving the EU.
Additional costs related to tariffs and/or duties is currently being planned for. We envisage that, at least initially, it is likely that the price of parts will rise and European Circuits will also need to consider the effect of any exchange rate movements if there is a ‘no deal’ outcome.
Given our UK production and supply focus, European Circuits is likely to be minimally affected by any changes to Freedom of People movement across UK borders.
Adapting to negotiations
The Brexit negotiations are still on-going and we still await specific electronics industry details but we are committed to keep abreast of the latest announcements and we will inform our stakeholders of any potential changes to our service via our website.
Finally, we wish to reassure our partners of our ongoing commitment to continued trade, in the UK, within the EU and with our other export markets.