Businesses are in the dark over regulatory avalanche for EU trade

New research by the BCC has uncovered that the vast majority of businesses are unaware and unprepared for a swathe of fast approaching changes in EU/UK regulations. 

When asked about their knowledge of a number of changes coming down the track, the survey of more than 700 firms found: 

• 84% of manufacturers do not know about new reporting requirements on exports of goods containing high-carbon steel, and selected other products, to the EU starting in October 

• 87% of exporters are either unaware or unprepared for new EU VAT requirements due in January 2025 

• 43% of manufacturers are still unaware of the UK’s, now voluntary, alternative product safety marking system to the EU’s CE one 

The lack of knowledge and preparation for the changes, mean that some traders with the EU could face a whole range of new delays and unexpected costs. In some cases exporters could also find their goods unable to be transited to EU customers. 

While not all of the incoming changes to regulations will impact every firm, the wide range of new rules, and the complexity of their requirements, means many businesses will face new obstacles. 

Commenting on the research, William Bain, Head of Trade Policy at the BCC, said: “It is a serious worry that more than four out of five manufacturers who export have no knowledge of the EU’s new Carbon Border Adjustment Mechanism, which begins roll out in just over three weeks’ time. 

It is just the start of a series of changes that will gradually ratchet up over the next three years, to deter the use of cheaper but higher-carbon steel, and other goods with highly embedded climate damaging emissions, being imported into the EU.

This first phase covers only a limited number of iron and steel products, fertilisers, hydrogen, cement, aluminium and electricity, but any UK company which then includes any of these items in their goods, for example in nuts and screws, will now have to declare them.”

He added: “This is a very complex set of rules; the EU’s published guidance runs to more than 200 pages. It is likely manufacturers that export will have to think about allocating dedicated staff resources just to deal with these reporting requirements. 

So, they need to start thinking about this now, and working out what their response will be, but there are very few trusted sources of information. 

The BCC and Chambers will be working hard to pull together as much guidance as we can to help businesses get to grips with this onslaught of changes.”

He concluded: “Our research shows Government must also look again at how it communicates with firms about regulatory changes, especially given the likelihood of further divergence from EU rules in the future. 

EU and UK policy makers also need to look at ways of simplifying a system that is over-burdensome for traders on both sides of the Channel. This could include reducing the complexity of exporting food and exempting smaller firms from the requirement to have a fiscal representative for VAT in the EU. 

If it’s done right the further embedding of digital trade through Single Trade Windows also has the potential to make exporting and importing much simpler. And there are other practical steps that should be considered like rejoining the Pan-Euro Mediterranean convention to ease rules of origin issues.”