TechniShow 2018 Brexit the current state of play Leon Kanters, partner Meijburg & Co March 21, 2018

Brexit Negotiations – Current Status Phase 1 – political agreement reached in December 2017 Phase 2 – Future relationship Transition phase agreed UK Strategy and Wish list Leave the single market March 29, 2019 and Leave the EU Customs Union, The UK should be able to conclude its own Free Trade Agreement (FTA) Conclude a UK bespoke deal with the EU

Future trade deal: possible scenarios © 2016 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Free Trade Agreement (FTA) – Rules of Origin Requirement What’s in a FTA? Applies only for wholly obtained or sufficiently transformed goods Why? To prevent FTA abuse. The preferential rules of origin define per product when it can be considered as sufficiently transformed. The rules may vary per FTA

What does this mean for the UK? Best case: Administrative burden Worst case: Products do not comply UK needs “cumulating of origin” for all FTA’s Problem: Does not exist in EU FTA’s.

Transition phase – clock remains ticking Duration: Agreed to 31 December 2020 Status quo UK remains a member as if it had not left How will third countries react? CETA (EU – Canada FTA) took 7 years Customs infrastructure (channel ports) will take far longer than is acknowledged The UK has not even started to come Brexit ready

RESULTS BREXIT SURVEY NON TARIFF BARRIERS KPMG - Meijburg Import declarations increase by 752,000 Export declarations increase by 4.2 million 77,000 VAT numbers belong to businesses that supplied/received goods to/from the UK Over 35,000 VAT numbers are currently not registered with Dutch Customs 930 new customs officers 140 new inspectors NVWA Total additional costs customs formalities 387.2 - 627.4 million per year, excluding duties No law enforcement customs infrastructure available for primary route to the UK (Ferries) Trade and law enforcement agencies are not ready in time