Article 50 has been notified: a supply-chain map for UK strapping component buyers

On 29 March 2017 the UK government delivered the Prime Minister’s letter to the President of the European Council, notifying the UK’s intention to withdraw from the European Union under Article 50 of the Treaty on European Union. For packaging buyers the immediate question is practical: what, if anything, should change in the way strapping components are bought?

In April 2017 the honest answer is that nobody can say what the future customs or tariff arrangements will be. What a buyer can do is assemble the facts that any outcome will require. This guide sets out that work for buckles, clips, seals and strap.

What the notification sets in motion

Article 50(3) provides that the Treaties cease to apply to the withdrawing state from the date a withdrawal agreement enters into force or, failing that, two years after the notification, unless the European Council, in agreement with the state concerned, unanimously decides to extend that period. Counting two years from 29 March 2017 gives 29 March 2019 as the default horizon.

That date is a planning marker, not a prediction. The notification starts negotiations; it does not settle their result. Any procurement note written in April 2017 should keep the known dates separate from assumptions.

Why small components deserve a line in the review

Strapping closures are rarely a large spend. They are, however, a dependency. A pallet or crate that cannot be closed cannot be dispatched, and a substitute buckle or seal that does not suit the strap and tool can cause more trouble than a short delay. That combination of low value and high consequence is easy to leave out of a supply-chain review.

Build the map

Start with a simple table for every strapping item you buy. It is useful regardless of what is eventually agreed.

Field	Why record it
Item and supplier reference	Identifies exactly what is bought, not just “19 mm buckles”
Country where the item is made	Origin may matter for future duty or documentation
Where it ships from and the route	A UK distributor’s stock may itself be imported
Commodity code used on import or dispatch	Shows how the item is classified in 2017
Delivery term and named place	Shows who handles transport, costs and formalities
Party acting as importer	Identifies who would face any new formalities
Contract or price-agreement end date	Shows which commitments run past March 2019
Approved alternatives	Shows how quickly a second source could be used

Two points are worth noting when filling it in. First, an item bought from a UK distributor may be made elsewhere, so the distributor’s own sourcing matters. Second, items already imported from outside the EU, for example from Turkey, already pass through customs clearance, because Turkey is not an EU member state. Turkey does have a customs union with the EU: Decision No 1/95 of the EC-Turkey Association Council abolished customs duties between the two on most non-agricultural goods from the end of 1995. Those flows therefore show what border paperwork looks like even where no duty is charged, which is a useful reference point.

For the size, pack and price-unit side of UK purchasing, our UK and Ireland procurement guide covers the details to keep consistent.

Contracts that run past March 2019

Look at any supply agreement or fixed price that extends beyond the two-year horizon. Without forecasting an outcome, it is reasonable to ask:

• Which party bears any new duty, tax or clearance cost under the delivery term used?
• Is the named place precise enough to show where responsibility changes hands?
• Does the contract say what happens if new documents are required for the goods?
• Is there a review point that allows both sides to revisit terms if the trading rules change?

Our international procurement guide explains how delivery terms and named places divide responsibilities. A tax or customs adviser should review any clause that allocates duty or tax.

Keep the technical specification portable

The most useful contingency is a specification that another qualified supplier could quote against. That means the component drawing or part reference, the strap it is used with, the tool, the finish and the acceptance criteria, all written down. If a second source is ever needed, the buyer can then request samples and approve them against the same record rather than starting from a photograph.

Our sample approval guide shows how to document an approval so it survives a change of supplier.

What not to do in April 2017

Avoid acting on rumours about future rates or procedures. Large speculative purchases tie up cash and storage, and components can be bought for a packing method that changes before they are used. Gather the facts, identify the commitments that cross the horizon and keep the specification ready. Revisit the map at regular intervals and whenever official guidance changes.

Keeping UK orders specified through the negotiations

For UK buyers comparing galvanized wire buckles, sheet metal clips or steel strapping seals, YAKU can discuss the specification and delivery terms through the enquiry page. Delivery basis, documents and lead time are agreed in each quotation.