The Border Stimulus Package

Launch of €28 million economic stimulus package for the border region

*Applications to the funds are now closed. 

 

While the final outcome of Brexit is still unknown, the focus on innovation, competitiveness and diversification remains a strong business strategy for Irish companies.

To support this strategy the Minister for Business, Enterprise and Innovation, Heather Humphreys TD, announced on January 3rd details of a special €28 million economic stimulus package for the Border region. Given the closely integrated supply chains across this region, the fund is specifically designed to help the counties greatly impacted from Brexit; Donegal, Sligo, Leitrim, Cavan, Monaghan and Louth.

The main aim of the €28m stimulus package is to drive economic activity and make business more resilient and competitive across the region. Details of the package include:

  • €3 million for the six Local Enterprise Offices (LEOs) in the border counties for capability development programmes for micro and small firms with ambition
  • An €8.5 million Brexit Transformation Fund to enable firms to transform their businesses and diversify markets
  • €1.5 million for Industry Fellowships targeted at businesses located in Border counties, administered by Science Foundation Ireland (SFI)
  • A €15 million competitive Border Enterprise Development Fund, administered by Enterprise Ireland (EI)

Enterprise Ireland is responsible for the administration of the €15 million Border Enterprise Development Fund and the €8.5 million Brexit Transformation Fund.

 

Brexit Transformation Fund

The Brexit Transformation Fund is open for applications from February 5th and closes on the 8th April 2020. Companies are encouraged to examine all aspects of their business to enable a ‘transformative’ change to their business as a response to Brexit. More details on the package and process involved are available from your Enterprise Ireland Development Advisor (DA) or through your Enterprise Ireland regional office in Sligo or Dundalk.

 

Border Enterprise Development Fund

The €15 million competitive Border Enterprise Development Fund is designed to foster collaborative projects that will drive entrepreneurial and innovative capability in the border region. This fund opens for applications on February 5th and closes on March 25th with final review and approval set for May 2020. To learn more about this fund, contact your Enterprise Ireland regional office in Sligo or Dundalk or you can learn more about the the Border Enterprise Development Fund at www.enterprise-ireland.com/BEDF

Additional details on four new funds under the Border Regional Stimulus Package are outlined in this presentation.

The Border Regional Stimulus Package is one element of a range of supports to help implement Brexit plans and transition through the uncertainties of Brexit. Visit our supports page to learn more about the full range of state support around Brexit or email your enquiries to BrexitUnit@enterprise-ireland.com.

How Brexit will impact intellectual property

Joe Doyle, Intellectual Property Manager, Enterprise Ireland outlines the impact Brexit will have on Intellectual Property

 

There are many seismic shifts predicted in the UK’s future relationship with the EU. Some are quite apparent, but others are below the surface and don’t receive the same level of public attention. Intellectual Property (IP), for example, may appear to be a side issue to more pressing political and economic concerns but IP is, in fact, fundamental to trade and innovation within and across borders.

A study by the European Union Intellectual Property Office (EUIPO) attributed 28% of jobs (60 million) in the EU to IP intensive industries. That accounts for 42% (€5.7 trillion) of total EU economic activity and 90% of EU trade with the rest of the world. The study showed that, in Ireland, IP intensive industries accounted for 24% of employment and contributed to 53.8% of GDP.

 

How Brexit impacts intellectual property

 

So how does Brexit affect IP? Fundamentally, IP is territorial i.e. IP rights (IPR) only apply in the territories where the IP is registered or legally recognised. If the territory changes, then so too does the IPR. In recent years, attempts have been made to harmonise IP frameworks across the EU to give companies predictable and efficient protection for their innovation throughout the economic area. For example, the EU Trade Mark (EU TM) and the Registered Community Design (RCD) are IP protections that apply across the whole EU territory via a single application, thereby reducing cost and administration. The implication of Brexit, for companies trading in the UK and relying on EU-wide IP, is what happens when the UK falls outside the EU territory? To put it another way, in IP terms, Brexit means the earth (or part of it) will effectively move.

Thankfully, the UK and EU negotiation teams are Pre-empting ahead of this and aim to ensure that companies will retain equivalent protection in the UK post-Brexit.  According to the draft Withdrawal Agreement, the negotiating parties have agreed that owners of EU TMs and RCDs, granted before the end of the transition period in 2020, will automatically get an equivalent right in the UK. However, it’s not so straightforward. For example, issues such as how the UK re-registration procedure will work in practice, and who will pay UK fees, are not yet agreed.

Furthermore, there are several unregistered forms of IP where things are potentially even less predictable. Unregistered rights refer to things like copyright, trade secrets, and unregistered designs, the protection of which depends very much on certain legal frameworks and institutions in each member state. The intention, post Brexit, is that the UK will replicate EU directives, but due to legal and institutional complexity, it may not be possible to achieve harmony in the presence of a border.

 

What will Brexit mean for patents?

 

Of course, there is also the issues of patents. The withdrawal agreement is silent on this one, largely because the European Patent Office is not an EU institution. However, the EU Unitary Patent and Unified Patent Court, which have been the subject of a 40-year EU negotiation (take note Brexit negotiators), are due to come into force later this year. As Brexit has significant implications for these, their future is uncertain.

 

What can I do to prepare?

 

No one can predict how the post Brexit IP world will look but attempts are being made to patch over the fault lines. Early tremors have passed largely unnoticed but the ‘IP earth’ beneath exports to the UK will move. Maybe the main event will even pass unnoticed, but the aftershocks may be severe and long lasting, and by then it might be too late do something about it.

So, while there is still some time, Irish companies trading with the UK, and with IP protection in the UK, need to engage with their legal and IP advisors to ensure their IP Strategies are Brexit-proof. Companies should start by conducting an IP audit to identify what IP is protected and what is not, review IP terms in agreements and contracts, identify risks and threats etc. Then, they should work closely with their IP advisors to develop sound IP Strategy that takes account of the immediate and long-term risks posed by Brexit. This may include filing IP protection in the UK in case the EU and UK do not reach full agreement.

 

Learn more about Enterprise Ireland’s Brexit supports here.

 

Customs: Trading with a Third Country

Customs: Trading with a Third Country

 

Irish goods exporters and importers are being advised to expect delays at ports once the transition period to establish a future trading agreement between the EU and UK concludes.

At a Brexit Advisory Clinic organised by Enterprise Ireland, Carol-Ann O’Keefe, Assistant Principal Officer at Revenue Commissioners, told business leaders that it is inevitable that Brexit will generate additional costs, administration, and delays at Irish ports but much is being done by Irish authorities to minimise these.

“Once Brexit occurs, and Britain leaves the EU, it will be classed as ‘a third country’, outside the single market,” said O’Keefe. “It doesn’t matter what kind of customs union is in place, or whether there is a free-trade agreement. After Brexit, full customs declarations will be required for all goods imports and exports shipped between Ireland and the UK.

“In theory, the UK has already become a third country during the transition period, however, the UK still operates as if it was an EU member and nothing will change until the start of 2021. If the UK and EU do not establish a free trade agreement the new UK Global Tariffs will automatically come into effect. “

 

Customs Declarations

 

As ‘a third country’, goods imported from the UK will require a customs declaration and be subject to controls. Checks by customs officers may be subject to licence requirements and will, generally, be subject to payment of duties and VAT when, and where, they are brought into Ireland.

Similarly, any goods exported from Ireland to the UK will require a customs declaration when leaving Ireland, may be subject to controls and requirements. Depending on the regime implemented by the UK Government, goods may require a customs declaration on entry into the UK and will, generally, be subject to payment of duties and VAT when, and where, they are brought into Britain.

Goods shipped from Ireland to the European continent, via the UK ‘land bridge’, will be classified as transit goods, and require a customs transit declaration. The shipment will require interaction with offices of departure and destination in the EU and with Office of Transit in the UK. Transit goods may be subject to control, leaving and re-entering the EU. Goods in transit are required to provide a financial guarantee to the authorities of the country through which they pass.

Once a business begins dealing with EU customs authorities, it is classified as an economic operator and will need an Economic Operator Registration and Identification (EORI) number. An EORI number, used on all customs declarations, can be obtained online through the www.revenue.ie site.

 

Potential Delays at Customs

 

Control inspections may also be required by other Irish agencies, and their UK equivalents (depending on the regime implemented by the UK Government). These include: the Department of Agriculture, Food and the Marine (who may inspect all food and agricultural supply imports); local authority environmental health offices (who will inspect shipments of waste), and the Department of Business, Enterprise and Innovation (who may inspect dual purpose goods to ensure that they are not being exported for nefarious purposes).

“In the post 9/11 era, customs services have taken on additional responsibilities for safety and security,” said O’Keefe. “Carriers need to provide a declaration about their cargoes, so traders have to provide additional information to their logistics partners in advance of shipment. A manifest that only says ‘full load’ is not acceptable. Exporters and importers will have to engage with their logistics companies and their customs clearance agents.”

To give a sense of the administrative burden involved in making customs declarations, O’Keefe pointed to the single administrative document (SAD), which covers trade with non-EU countries. “This customs clearance document has 54 boxes that need to be filled,” she said.

All the processing is done electronically, with SADs initially entered into the Revenue Commissioner’s automated entry processing (AEP) system.

 

 Planning ahead for Irish exporters

 

Irish exporters should use a reputable third-party freight forwarder and customs clearance agency, said O’Keefe. “Generally, only large companies can afford (from a human resource perspective) to have in-house customs clearance expertise. We would advise that you start looking now.”

She also recommended that manufacturing companies examine their logistics flows and the potential impact of Brexit on both the cost of raw materials and the potential for delayed delivery.

“We’ve spoken to companies who didn’t realise that the raw materials they were getting from the UK originated elsewhere in the EU. If you can avoid buying EU goods in free circulation in the UK, you can avoid paying duties on the double.”

There is a possibility of goods being fast-tracked through ports for operators who become an Authorised Economic Operator (AEO). AEO or ‘trusted trader status’ means that shipments aren’t subject to control checks as frequently, and goods in transit do not require financial guarantees. Obtaining AEO status involves developing and maintaining quality-assured procedures that demonstrate a secure international supply chain. “There are currently 144 AEOs in Ireland,” said O’Keefe. “Acquiring AEO status can be costly and it’s not for everyone. If you are a food exporter, your exports may still be stopped for control at UK ports depending on the regime implemented by the UK Government, so AEO is not for you.”

Exporters and importers should understand what their customs obligations will be, said O’Keefe. “There is a lot of information on www.revenue.ie and you could try opening up communications with HMRC. At the very least, you should obtain your EORI number now and ascertain what tariffs you will pay. InterTradeIreland will help with tariff information and Revenue has a tariff classification unit. Usually tariffs are straightforward, but one economic operator spent years in the Court of Justice arguing over whether Kinder Eggs were toys or confectionary!”

Make sure your business is ready for Jan 1st 2021 and learn the key customs concepts, documentation and processes with Enterprise Ireland’s Customs Insights course.

 

Don’t delay logistics plans to prepare for Brexit

Don’t delay logistics plans to prepare for Brexit

 

 

Irish exporters should, by now, have progressed past preparation, and have begun to act in response to the disruptions Brexit is expected to bring, even if it is unclear how severe those disruptions will be.

Once the UK leaves the customs union at the end of the transition period, it is possible that a wide range of goods exported to Britain will be subject to additional tariffs and duties. A Brexit readiness workshop hosted by Enterprise Ireland and the Irish Precast Concrete Association, heard that, Irish exporters can expect to face a substantial increase in bureaucracy and paperwork.

 

Impact of potential delays

 

An example of the delays that could accrue can be seen at the EU’s border with Turkey, a member of the European Customs Union, but not an EU member. HGV lorries entering the EU via the Turkish-Bulgarian border typically experience delays of 12 hours, while delays of 20 hours or more are not uncommon. Such delays are caused by the cumulative administration burden of all HGV drivers being required to declare what goods they are carrying and the origin of those goods.

If HGV drivers using the ferry at Dover, or the Eurotunnel at Folkestone, need to spend an additional two minutes each having paperwork checked, it would create thirty-mile tailbacks on roads leading to the ports, according to a survey by Imperial College London.

In Ireland, Dublin Port has already built additional customs facilities, including drive-by booths, covered vehicle inspection areas, and sheds where containerised goods can be unloaded, examined and reloaded.

For companies exporting to the European continent, there are alternatives to using the UK land bridge, that can help to avoid customs delays when entering and departing Britain. Cobelfret operate the world’s largest short-haul roll-on/roll-off ferry between Dublin and Antwerp.

 

Impacts for logistics

 

If you are exporting to the UK and not the continent, however, you must negotiate a way through Brexit delays, rather than trying to negotiate around them.

Just-in-time delivery is a common requirement in the construction industry, with penalties accruing if goods are not delivered on site within a pre-agreed timeframe, usually by a specified date. However, as no one knows exactly how long it will take a particular shipment to clear UK customs post-Brexit, exporters must build an additional margin for delays into estimated delivery times.

At the event, Ronan McDonnell of The Logistics Consultancy advised that those working under just-in -time constraints should consider investing in UK depots, where goods can be held temporarily before they are due for last mile delivery.

McDonnell noted that the effect of a delay entering a port can be amplified by restrictions on driver working hours. A haulier stuck in traffic for hours may be required to pull over and stop due to tachograph regulations. He suggested that Irish exporters could consider jointly investing in holding depots and sharing the additional cost burden.

The only way for Irish manufacturers to completely avoid export delays, said McDonnell, is to become UK manufacturers by building production facilities in Northern Ireland or Great Britain.

 

Customs Union dues

 

Outlining what could happen in a best-case scenario in which Britain stays in the European Customs Union, Donna Hemphill, a senior manager in Deloitte’s Global Trade Advisory division, said that Irish exporters will need to acquire an Economic Operators’ Registration and Identification (EORI) number before commencing exports with post-Brexit Britain.

Once exports commence, each shipment will need to be entered into the Irish Revenue Commissioner’s Automated Entry Processing (AEP) system, electronically filing single administrative documents (SADs) using the direct trader input (DTI) facility on the Revenue Online Service (ROS). More information can be found by downloading Revenue’s Guide to Customs Export Procedures [PDF].

Hemphill also recommended that exporters engage the services of a specialist freight forwarding and customs brokerage company to assist with sending goods to Britain as efficiently as possible. The paperwork involved can be substantial. An SAD alone contains 54 blank boxes that must be filled in.

In addition to the expense of hiring such a service, exporters should budget for the time required to provide necessary instructions to freight forwarders and customs brokers.

“Responsibility for making the correct customs declaration lies with the trader, not with the freight forwarder or customs broker,” added Hemphill. “And there are financial penalties for non-compliance.”

 

Becoming an Authorised Economic Operator

 

It is possible to speed up your passage through UK customs by becoming an Authorised Economic operator (AEO), but approved procedures and internal controls must be implemented to qualify for priority treatment.

If you have AEO certification, customs can carry out checks on your premises, to ensure your procedures and internal security systems are up to standard. A customs audit will require you to make disclosures about your business activity.

AEO status also offers additional benefits. It helps confirm you as a trusted trader with business partners. UK AEO status is recognised in other countries.

Another option to consider is establishing a customs warehouse in the UK, in which your goods are physically present in Britain, but have not yet cleared customs, and duty has not yet been paid on them. The chief advantage in this scenario relates to cash flow – you won’t need to pay duty on exports until the goods leave your warehouse for delivery to customers. Customs warehouses are subject to periodic inspection by HMRC and operators must demonstrate good warehouse management capability.

Whatever the outcome of Brexit may yet be, such issues are worth considering. The UK remains Ireland’s closest trading partner, and Irish goods will continue to find a market there.