15.01.2021
Brexit: What BG companies that trade with the Island should know
Here are some important things that Bulgarian companies that trade with the Island after the UK leaves the European Union should know, writes Trud bg.
There are no obstacles in front of the raw materials - honey, fuels, sunflower. Furniture, clothing, plastics - no duties and non-tariff barriers. Electronics, electrical engineering, machinery - there are no customs duties, but it will probably be necessary to issue new certificates of conformity, depending on the date and term of the available ones.
The World Trade Organization (WTO) rules on non-tariff barriers to trade will apply. Pharmaceutical products - there are no customs duties, but the registrations will be valid only until the end of their current term, after which a new registration procedure will be introduced.
GMP inspection certificates are mutually recognized, but each party has the right to request an on-site inspection.
A specific niche is the export of food and beverages for refilling Bulgarian stores in the United Kingdom (UK). Exports vary considerably - between 40 and 70 million € per year. Characteristically, the variety of goods is large and the batches - small.
Although no duties are imposed, it is expected that their importation into the UK will become significantly more expensive, as each consignment will be customs cleared separately and will require a separate sanitary or phytosanitary certificate as required by the United Kingdom.
The exception is Northern Ireland, where EU-compliant goods can be delivered. The labeling of the goods must comply with the requirements of the UK.
What does Bulgaria (2019) import?
Similarly, there are no obstacles to the import of chemical products from the UK. Plastics - no tariffs and non-tariff barriers. Machinery, car electronics - no duties, but will probably need to issue new certificates of conformity.
Pharmaceutical products - no customs duties, but registrations will be valid only until the end of their current term. Alcoholic beverages will be imported duty free, but according to the rules for importing excise goods from third countries.
The case of toys should be investigated, as probably a significant part of them are of Asian origin and the rules of origin and cumulation of origin have changed significantly.
What is Bulgaria losing?
Bulgaria and the United Kingdom (UK) are the two geographical ends of the EU. The intensity of economic relations is not as high as in a number of other Member States (at this stage, Ireland, France and the Netherlands are considered to be most affected).
With the exception of some British pharmaceuticals, none of the imports are extremely important. Yet…
The voice of the "practical" Scandinavian countries and the Netherlands, to which Austria has joined, will weaken. In general, transparency in the work of European structures will decrease in favor of the southern countries.
The EU is losing a lot of the pragmatism of British research. A number of Bulgarian research centers work closely with those in the United Kingdom.
Such funds have also been established in Bulgaria. You can see some negatives of the form: Partially publicly funded funds incur costs to find and support innovative start-ups, and when one of the start-ups gains momentum, it is owned by an individual associated with the fund, not the fund itself. .
That is, the negatives are for a fund under PPP, and the positives (at least some of them) are privatized. There are transfers of private funds from the island to the mainland and their competition will speed up the treatment of children's diseases with public-private funds in the EU.
The listed three negative tendencies seem distant for Bulgaria, but in fact determine the macro framework of our development. There are other potentially negative factors, but these are the most significant in the long run, probably in that order.
General rules of the agreement
- Since the conclusion of the deal, the public has been flooded with information about agreements, procedures and general provisions. We will try to weed out what concerns most Bulgarian economic operators.
- Lack of tariff and quota restrictions.
- The rules for charging VAT are the same as for trade with third countries.
- The rules of origin of goods are changing. Goods and materials of EU origin imported into British production will be considered British when exported to the EU and vice versa. The United Kingdom has failed to negotiate that resources originating in countries such as China, Turkey and Japan be treated on an equal footing with those in the EU.
This provides a competitive advantage to Bulgarian goods such as electronics, electrical engineering, machinery, automotive parts and batteries. The United Kingdom has reached a six-year grace period for zero duties on electric vehicles, after which a 10% duty will be required if the content of third-country components exceeds 55%.
The EC has developed a tool for self-assessment of the origin of goods ROSA, which is recommended to use in the initial period after the entry into force of the agreement.
- An agreement has also been reached on resolving future disputes over trade rules and standards. For this purpose, a procedure for treatment of such cases has been agreed, and the establishment of a bilateral steering commission is expected.
- An agreement has been reached on the application of minimum environmental, social and labor standards, which does not provide for the automatic imposition of tariff sanctions in the event of non-compliance.
- The validity of the existing transport arrangements continues. The cabotage rights of the British carriers are limited, which may be a good opportunity for the Bulgarian transport companies to occupy this market niche.
- The services are not included in the scope of the agreement. The British economy is heavily dependent on services, as 80% of the country's GDP is generated by this sector. The United Kingdom became the first country in the world whose exports of services exceeded those of goods.
- After January 1, the registration of companies and opening bank accounts in the UK for Bulgarian entrepreneurs is significantly complicated.
- The United Kingdom retains its participation in the EU's Horizon and Copernicus programs, as well as its membership in Euroatom. A significant loss for Bulgarian education is the withdrawal of the United Kingdom from the Erasmus program, with the exception of the universities in Northern Ireland.
- The agreement also covers data transfer.
- The agreement will allow Bulgarian companies to continue to export to the United Kingdom, but the introduction of new export procedures will lead to some cost of the process. Some sectors, such as services and information technology, will remain attractive to British investors after Brexit.
Problems
- It is estimated that trade flows after 1.1.2021 are about 50% of normal. Although many European companies have refrained from operating for and from the United Kingdom, signals of problems have already emerged. The Air Force reports major delays - up to 48 hours, in ports due to the sharp increase in documentary work. The busiest section is Calais - Dover.
Truck drivers complain about the lack of any conditions for surviving the forced stay - toilets, water, food.
- It turns out that many traders outside Europe are not familiar with the new rules. Their goods have entered the United Kingdom, but do not have the necessary documents to continue for EU countries.
- Couriers such as DPD have stopped deliveries to and from the EU.
- Almost all shipments of goods requiring refrigerated trucks have been stopped.
- The transport of live animals, mainly pigs, has been stopped.
- Economic operators whose activities involve the transfer of sensitive data complain that a number of details have not been clarified and have been forced to suspend operations in order not to be infringed.
- The Marks & Spencer chain has stopped deliveries to its stores in Northern Ireland due to the so-called red tape - new rules for the movement of goods between Northern Ireland and the United Kingdom. The chain also reported problems with its supplies to the Czech Republic and France.
15.01.2021
Last day for applications under measure 60/40 from October to December
January 15 is the deadline by which employers will be able to submit applications for payment of funds under economic measure 60/40 for the period from October 1 to December 31, 2020.
The economic measure 60/40, through which employers can receive funds from the state to maintain the employment of their employees, was introduced after the state of emergency declared on March 13, 2020 due to the spread of the coronavirus. Its validity has been extended several times - until September 30, 2020, until December 31, 2020, until March 31, 2021.
Under the measure, employers from all economic sectors are entitled to compensation for maintaining employment, with the exception of: agriculture, forestry and fisheries, financial and insurance activities, public administration, education, human health and social work, activities of households as employers, undifferentiated activities of households for the production of goods and services for own consumption, activities of exterritorial organizations and services.
Funds are paid to employees who during the period from March 13 to December 31, 2020 have worked part-time, have used leave under Art. 173a of the Labor Code or their work has been suspended due to temporary restrictions on activity.
