We’ve left… almost. What happens now?

The UK formally left the EU on 31 January 2020. This is not the end, or the beginning of the end, it’s the end of the beginning. The much more important future relationship needs to be determined. There’s a hiatus until 31 December 2020 when nothing changes with regard to free trade and movement of people between the UK and the EU.

During this transition period the UK and the EU will try to hammer out the future relationship. The EU considers the timing too short. Boris Johnson, meanwhile, insists there’ll be no extension beyond 31 December 2020. As for the political commentators, their views range from:

  • A framework agreement will be signed off within this period and it’ll cover all the big points, possibly even more; to

     

  • There’ll be an extension.

Few people are saying there will be a no deal scenario, but nobody knows for sure.

The burning issue is the extent to which the UK aligns with EU regulations. The EU maintains that, to have significant free access to the EU market, the UK must align. Its big concern is that there’ll be ‘unfair’ competition if the UK becomes a 'regulatory light jurisdiction'. Boris Johnson is reluctant, for now at least, to concede this.

So what should UK businesses and international organisations trading into the EU from the UK be planning for?  The key priorities are:

  • Goods - the government is advising exporters and importers of goods across EU/UK borders to register for an Economic Operators Registration and Identification number (EORI). This will help facilitate the movement of goods from the UK to the EU and vice-versa. This applies whether or not a deal is struck. It only applies to goods, though, so if you import or export services without moving any physical goods across borders, you won’t need an EORI;

     

  • People - many businesses employ people who are EEA or Swiss nationals (the EEA includes EU countries plus Iceland, Liechtenstein and Norway). Regardless of the future trading relationship, EEA or Swiss citizens will need to make a free application under the EU Settlement Scheme and prove their identity to continue living and working in the UK. If no deal is struck this needs to be done before 31 December 2020. A longer period will apply if a deal is done - but why wait and take the risk? Encourage any EEA or Swiss nationals employed by your organisation to get their application in;
  • Intellectual property - at present, IP rights holders in respect of goods placed in the UK market have no control over how those goods are distributed within the EU. Their IP rights are ‘exhausted’ so they cannot prevent parallel exports to the EU. This could change, so think carefully before making any commitment to supply IP rich goods for delivery after 31st December 2020 without checking the position first; and

     

  • Data – to what extent are your operations reliant on transfers of personal data? What risks could you be exposed to if there’s no binding agreement by 31st December 2020 permitting the transfer of personal data between the EEA and the UK to continue? What steps can you take to mitigate these risks?

Closing

Brexit got done in so far at the UK officially left the EU on 31 January 2020. However, uncertainty still exists for UK businesses in crucial areas such as trade, the rights of people from the EEA and Switzerland to live and work in the UK, intellectual property and data protection. How you align your business for the post-Brexit UK will depend hugely on the outcome of UK/EU negotiations on these issues. Our advice? Keep a close eye on developments and keep your plans flexible.

To read the next article titled 'Our role in brexit' click here.