Practical developments for UK exporters and SMEs
21 September 2026
International trade developments are often reported as separate matters involving customs, shipping, taxation or government policy. In practice, one change can affect several parts of an international transaction.
This week’s most consequential developments are the approaching UK Carbon Border Adjustment Mechanism, continuing disruption around the Strait of Hormuz, planned changes at the Sevington and Holyhead inland border facilities, and the proposed prohibition on trade in goods from Israeli settlements.
The purpose of this briefing is not simply to report the news, but to consider what it means in practice for UK SMEs and those advising them.
1. UK Carbon Border Adjustment Mechanism: preparation must begin now
Status: Confirmed legislation—effective from 1 January 2027.
The UK Carbon Border Adjustment Mechanism, normally referred to as CBAM, will apply to specified imported goods in the aluminium, cement, fertiliser, hydrogen, iron and steel sectors.
The important word is specified. CBAM does not automatically apply to every product associated with these industries. Liability is determined by the relevant commodity code. Importers must therefore check the code applying to each product rather than rely on a general commercial description.
The person liable will normally be the importer in whose name, or on whose behalf, the customs declaration is made. Appointing a customs agent or freight forwarder to complete the declaration will not transfer the CBAM liability to that agent.
Registration will generally be required where the value of covered imports reaches, or is expected to reach, the £50,000 threshold under either the forward-looking or backward-looking test. Registration facilities are expected to open by 1 January 2028. Businesses becoming liable during 2027 will need to retain the necessary records so that they can register and complete their first return.
The first accounting period will run from 1 January to 31 December 2027, with the first return and payment due by 31 May 2028.
The charge will be based on the emissions embodied in the imported product. Importers may use verified actual emissions data or government default values. A qualifying carbon price already paid overseas may reduce the UK liability, but supporting evidence will be required.
Practical implications
Importers of potentially affected goods should:
- confirm the correct commodity codes;
- identify which company will be the legal importer;
- establish the country of origin and the manufacturing installation;
- ask suppliers what emissions information they can provide;
- determine whether a qualifying carbon price has already been paid;
- introduce appropriate information requirements into purchasing contracts;
- review prices for goods arriving from 1 January 2027; and
- establish a system for monitoring the £50,000 registration threshold.
The commercial danger is that an importer may agree a fixed price for deliveries in 2027 without knowing the eventual CBAM cost or whether the overseas manufacturer can provide acceptable emissions data.
What this changes in export guidance
CBAM should not be explained merely as an environmental reporting scheme. It is a tax connected directly to the customs transaction, commodity classification, country of origin, supplier information and landed cost.
Although this is principally an import measure, UK exporters may also be affected when overseas customers request comparable emissions information for their own carbon-border requirements.
UK CBAM policy summary
HMRC registration guidance
2. Strait of Hormuz disruption: more than a shipping problem
Status: Current disruption—routes, costs and government responses remain subject to change.
The Strait of Hormuz is a critical route for energy, food, fertilisers and other international trade. The WTO has established a dedicated portal to monitor the effects of the continuing disruption and the trade measures introduced in response.
Shipping and logistics companies have developed alternative combinations of sea, road and rail transport to maintain access to Gulf markets. These alternatives may keep goods moving, but they can add cost, increase transit time and alter the documents issued for the journey.
For an SME exporter, the consequences extend well beyond the freight charge.
A changed route may affect the port of discharge, transhipment arrangements, insurance cover and the date on which the goods can be delivered. It may also make it impossible to comply with a letter of credit that names a particular port, prohibits transhipment or contains an unrealistic latest-shipment date.
Practical implications
Before accepting or shipping an order involving the Gulf region, exporters should:
- reconfirm the proposed route and transhipment points;
- obtain confirmation of war-risk and cargo-insurance cover;
- check the validity period of freight quotations and surcharges;
- avoid making open-ended freight commitments;
- consider whether the agreed Incoterm places additional costs on the seller;
- review letter-of-credit shipment and expiry dates;
- check whether transhipment and alternative ports are permitted;
- obtain the buyer’s agreement before changing the destination port; and
- make certain that the contract deals adequately with exceptional delay and route changes.
“Force majeure” is sometimes treated as though it automatically releases a party from its obligations. It does not. Its effect depends on the wording of the contract and whether the particular event and its consequences are covered.
What this changes in export guidance
This disruption demonstrates why freight, insurance, Incoterms, contracts and payment must not be taught as isolated subjects. A logistical change can become a documentary discrepancy, a contractual dispute or a payment problem.
WTO Strait of Hormuz trade portal
3. Sevington and Holyhead customs arrangements will change
Status: Planned for early 2027—exact implementation dates have not been confirmed.
HMRC expects customs checks currently undertaken through the Sevington Inland Border Facility to transfer to alternative facilities operated by the Port of Dover and Getlink from early 2027.
Sevington will then cease providing facilities for starting and ending transit movements. Traders will need to use facilities at the relevant border location, employ an authorised consignor or consignee, or obtain an appropriate transit simplification.
The sanitary and phytosanitary Border Control Post at Sevington is not affected by this announcement.
At Holyhead, the intention is for customs checks to transfer from the inland border facility to infrastructure within the port, also from early 2027. The detailed arrangements and implementation timetable are still being developed.
There is no immediate procedural change. Traders should continue using the existing facilities until HMRC confirms the new arrangements.
Practical implications
Businesses regularly using Common Transit should:
- ask their freight forwarders where movements will be opened and discharged in 2027;
- obtain revised charges and cut-off times when these become available;
- consider the possible effects on collection and delivery schedules;
- identify whether additional journeys to customs facilities will be required; and
- examine whether authorised consignor or consignee status would be commercially worthwhile.
What this changes in export guidance
Completing a transit declaration is only one part of the operation. The movement must also be started and ended at an authorised physical location or under an approved simplification. Advice that deals only with the declaration overlooks an essential operational requirement.
HMRC update on Sevington and Holyhead
4. Proposed UK ban on settlement goods
Status: Announced intention—not yet in force.
On 8 September, the UK joined several other governments in confirming an intention to introduce national restrictions on trade in goods from settlements regarded as illegal under international law. The UK stated that it would bring forward measures to ban trade in settlement goods.
The announcement is important, but it is not itself the legislation bringing a prohibition into force. Businesses must distinguish between an intended measure and an operative legal restriction.
Under the present arrangements, goods produced in relevant Israeli settlements are already excluded from preferential tariff treatment under the UK–Israel Trade and Partnership Agreement. Origin documentation issued in Israel must identify the postcode and location where the production conferring originating status took place.
Denial of a tariff preference is not the same as an import ban.
Practical implications
Businesses trading in potentially affected products should:
- monitor the legislation and its commencement date;
- strengthen supplier declarations concerning the precise place of manufacture;
- check production postcodes rather than rely solely on a “Made in Israel” description;
- retain supporting origin records;
- consider contractual provisions covering goods that become prohibited before importation; and
- continue screening all parties separately against the UK Sanctions List.
Three different questions must be considered:
- Is the product itself prohibited?
- Is it permitted but ineligible for preferential duty?
- Is the transaction prohibited because one of the parties is sanctioned?
These are separate legal tests and should not be combined.
What this changes in export guidance
Advisers and trainers must state clearly whether a government announcement is a proposal, an enacted measure or an operative prohibition. Businesses can prepare for an announced change, but they should not be told that a ban is already in force when the necessary legislation has not yet taken effect.
Government statement on proposed trade restrictions
Current notice to importers
The practical lesson from this week
The four developments appear unrelated, but they demonstrate the same underlying point.
International trade is a continuous commercial process. Commodity codes affect taxation and regulation. Shipping disruption affects contracts and payment. A change in customs infrastructure affects physical routing and delivery schedules. An announcement about origin restrictions affects purchasing, documentation, tariffs and sanctions screening.
Businesses do not need isolated fragments of information. They need someone capable of recognising how a change in one part of the transaction affects all the others.
That is the difference between passing on information and providing practical international trade guidance.
Gerald Bratley MCIEx
Author of The Practical Export Guide
www.gbratley.co.uk