Brussels, 31st January 2019 -  In the event of a no-deal Brexit, UK chemicals will be subject to tariffs each time they cross the English Channel unless companies can claim exceptions under strict customs rules, says Cefic Executive Director Industrial Policy René van Sloten. World Trade Organisation (WTO) tariffs of up to 6.5% will apply even for products which are being transferred to a subsidiary of the same company and amount to a tax on intra-company trading, he stresses. There are two ways to claim exemption from tariffs, but these are subject to strict customs rules and controls. First, companies can claim an exemption for inward processing. This is where a substance is exported as a raw material, processed into a different product and then re-exported. Second, companies can make a claim for duty suspension: if a company is dependent on a substance not produced in sufficient quality or quantity within the EU, it is possible to claim under this scheme, which will bring duties down to zero.The UK will have to set up its own system for these exemptions in the event of a no-deal Brexit. There are some disadvantages to being in a customs union, Van Sloten explains. If the UK enters one with the EU, it must eliminate tariffs against any third countries where the EU has a free trade agreement in place. However, it does not automatically benefit from zero tariffs on its exports to those third countries. It must first negotiate its own free trade agreement with those third countries, and that may not be simple: for one thing, the UK does not have enough trade experts to negotiate these free trade deals.