Hard Brexit means duties and tariffs for Maltese shoppers’ favourite UK shops

With no customs deal for the UK, Maltese online shoppers and used car importers will have to pay ‘non-EU’ duties on the goods brought into Malta

As a net exporter, sterling weakness has created a foreign exchange tailwind for online clothes retailer ASOS
As a net exporter, sterling weakness has created a foreign exchange tailwind for online clothes retailer ASOS

It’s not just a hard Brexit for the Brits: Malta’s online shoppers could face the raw end of the deal when the United Kingdom leaves the European Union on 29 March next year.

For unless the UK reaches a trade agreement with the EU by the time it leaves, Britain will be a third country with different customs regulations that puts an end to the free movement of goods to Malta.

And that means that Malta’s own love affair with online shopping will become an expensive deal, as the large variety of products from British websites are until now delivered to Malta exempt of any customs fees.

And it will be the same for car dealers who import second-hand vehicles form the UK, benefitting from the fact that Malta and Britain drive on the same side of the road.

Malta’s Customs Department is now advising businesses that engage in importing or exporting goods from and to the UK to “hope for the best, but be prepared for the worst.”

Customs Department director-general Joe Chetcuti has warned that goods travelling to any EU member state from Britain will have to be declared, even in the case of a ‘soft’ Brexit.

All procedures currently in place for imports and exports to and from non-EU countries will also apply to the UK, in the case of a hard Brexit, Chetcuti said. “Every business will have to submit a declaration to customs if it is importing goods from the UK or exporting them there. And all imports and exports will be subject to all controls with customs deems fit to impose.”

Regardless of whether a hard or soft Brexit takes place, goods coming from the UK will have to start having their documentation examined.

With a hard Brexit, tariffs will be imposed on any imports and exports from the UK. And if a customs arrangement is maintained between the EU and the UK, the tariffs will not apply but the documentation checks will still have to be carried out.

“There is a large degree of trade between Malta and the UK, and that means there is quite a considerable amount of additional procedures the Customs department and businesses have to undergo. Every day there are 12 flights between Malta and the UK. Come Brexit, all passengers on board will have to be customs controlled,” Chetcuti said.

“25 trailers a week containing ‘groupage’ cargo arrive from the UK every week. Each of these containers carries goods for an average of 10 consignees, who each have to start filling in a declaration. So we’re talking 250 declarations per week for groupage containers, and there are also around 30 single-consignee containers a week.”

Malta also receives 100 consignments from Britain every week delivered on planes.

Additionally, around 500 UK parcels are also delivered to Malta by international couriers each week. Added to this are the huge number of parcels delivered through normal postal mail – 50% of all parcels coming by regular mail are from Britain. These include all goods such as clothes, electronics and books ordered by customers from UK websites for delivery to Malta.

Clothes shops such as ASOS and NEXT, book shops such as Book Depository, music sellers like Juno.co.uk, and large online market places including Amazon UK and eBay UK are among the favourites for Maltese shoppers searching for a better deal or more variety than they can get from local retailers.

Chetcuti, however, surmised that big UK operators might decide to relocate their logistics hubs to places such as Germany in order to have all customs procedures undertaken in one country.

“If, for instance, a UK online shop is relocated to a hub in Germany, a good bought from that shop for delivery to Malta would first be delivered to Germany. Once in Germany, all customs controls would be carried out, and it would come to Malta without the need for any necessary procedures,” Chetcuti said.

But in the absence of an EU base, customers buying goods from UK websites will have to follow the same procedures as people buying products from websites in the United States, China and so on. This includes providing proof of payment for the product to the courier delivering the good. And in a no-deal situation, they will have to pay customs duty too.

Car importers should be OK

When it comes to cars being imported from the UK by dealers in Malta, Chetcuti said he didn’t think such businesses would be facing major challenges.

Many such dealers are already familiar with customs procedures relating to cars coming from Japan, he underscored.

“So, if a trade agreement is reached, the dealers will follow the same procedure as cars imported from Japan, but without the tariffs. But in the case of a hard Brexit, there will also be tariffs to pay, similar to the case with cars coming from Japan.”

A spokesperson for used-car dealer Ventur said the company didn’t expect any big changes in their business after Brexit.

Chetcuti says the situation will be more of a headache for drivers who import a vehicle from the UK themselves, since they might not be familiar with the necessary customs requirements.

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