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How will Brexit Affect Businesses? Regulation & Legal

Please note: the information provided here is a high level summary of information available from sources in the public domain and does not constitute legal advice.


Introduction

At this stage, we do not know what the final EU-UK deal will be, but we do know what has been proposed in the draft Withdrawal Deal & Political Declaration and what a “hard Brexit” or “no deal” scenario would look like. By understanding how either Brexit scenario would affect your business, you will be in the best possible position to respond to whatever the final deal contains.

MPs have now rejected the Prime Minister’s Brexit Withdrawal Deal multiple times in votes in the House of Commons. However, further attempts may yet be made to renegotiate elements of it and/or return it to the Commons for a further vote (along with a number of other scenarios). We will continue to update this Q&A as more information becomes available.

What follows are key questions that we receive from businesses about Brexit related topics and information on what we know to date from negotiations (where applicable) and what would happen in the event of a “no deal” Brexit.

For the latest update on Brexit negotiations and the Brexit timeline click here.

For more information on the draft Withdrawal Deal and Political Declaration click here for “Brexit FAQs” from the British Chambers of Commerce.


Organisational Structures

What do we know so far?

If the UK and the EU reach a Withdrawal Agreement then your organisation will still be able to run your UK offices on the same basis as now until the end of the implementation period (most likely: 31st December 2020). It is not currently clear as to whether there will be any additional requirements to fulfil after the end of the implementation period, as this is still subject to negotiation.

The political declaration states the arrangements should include provisions on market access and national treatment under host state rules for the Parties' service providers and investors, as well as address performance requirements imposed on investors. This would ensure that the Parties' services providers and investors are treated in a non-discriminatory manner, including with regard to establishment. 

In the event of a “No Deal” Brexit

In the event of a no deal, your organisation will continue to be able to operate branches in the UK. However, while your business will still be subject to the Overseas Companies Regulations (2009), you would now have to fulfil different requirements. Your company would now have to fulfil the same information and filing requirements as companies who are based outside of the EU. Click here for further details. It is also important to note that the UK does not impose any nationality restrictions on owners or managers of companies.

Click here to find out more information from the UK Government on structuring your business if there is no Brexit deal.

What do we know so far?

If the UK and the EU reach a Withdrawal Agreement then your organisation will still be able to run your EU offices on the same basis as now until the end of the implementation period (expected: 31st December 2020). It is not currently clear as to whether there will be any additional requirements or restrictions after the end of the implementation period, as this is still subject to negotiation.

The political declaration states the arrangements should include provisions on market access and national treatment under host state rules for the parties' service providers and investors, as well as address performance requirements imposed on investors. This would ensure that the parties' services providers and investors are treated in a non-discriminatory manner, including with regard to establishment. 

In the event of a “No Deal” Brexit

In the event of a no deal Brexit, it is highly likely that your organisation will have to contend with changes to the laws in which they operate. This will vary depending upon sector and which member state you currently operate in. It will also depend upon whether you run a branch or a subsidiary, as branches are likely to face more restrictions on their ability to operate.  If you are a UK citizen, you should also be aware that you may face restrictions on your ability to own a company registered in the EU. Again this will vary depending on the sector and the EU member state in which your company is operating.

Click here to find out more information from the UK Government on structuring your business if there is no Brexit deal.


Accreditations & Trademarks

What do we know so far?

If the UK Government reaches a Withdrawal Agreement with the EU, then your goods will continue to be regulated by the relevant EU agency until the end of the implementation period (expected: 31st December 2020). At this point, it is not clear as to what will happen after the implementation period ends as this will vary from sector to sector and is subject to the final deal. The political declaration states that the UK and the EU will put in place provisions to ensure, as far as possible, that their regulatory approaches are transparent, efficient, compatible and avoid unnecessary trade barriers.

The Government has stated that it would like to continue participating in some EU agencies post -Brexit, particularly those in highly regulated sectors. So far, the Government has mentioned specifically the European Chemicals Agency, the European Aviation Safety Agency and the European Medicines Agency. The UK Government negotiating position is that they would like to operate a common rulebook for goods with the EU. This would mean that UK businesses would continue to follow EU regulations on goods after Brexit. However, this is just the UK’s negotiating position and it remains to be seen whether the EU would accept this.     

In the event of a “No Deal” Brexit

In the event of a no deal scenario, the Government would need to set up its own respective UK agencies to replace EU agencies. These UK bodies will regulate goods after the UK has left the EU.

Click here to read the no deal technical notices released by the Government which contain more sector specific information.

What do we know so far?

If the UK and the EU reach an agreement then your goods will continue to have to meet EU standards until the end of the transition/implementation period (expected: 31st December 2020). It is not yet clear as to what standards your organisation will have to meet after the implementation period ends. The UK Government has said that it would like to create a common rulebook for goods with the EU to ensure frictionless trade. This means that UK businesses would have to continue to meet EU standards on goods after Brexit. However, this is still subject to negotiation between the UK and the EU.

In the event of a “No Deal” Brexit

In the event of a no deal scenario, UK businesses would continue to have to meet EU standards in the short term. This is because EU laws will be transferred into UK law on exit day. In the long term, your business will need to meet the standards set by the relevant UK agency.

What do we know so far?

The UK is currently a member of the European Patent Office which is an organisation independent of the EU. This means that any existing protection for European patents, which have been granted in the UK, will remain in force after the UK leaves the EU, even in a no deal scenario.

Click here for more information

What do we know so far?

The UK is currently a member of the European Patent Office which is an organisation independent of the EU. This means that there will be no significant changes to the future application process and pending applications will continue to be assessed on the same basis as now.

The Government has confirmed that they would like to stay in the Unified Patent Court Agreement after the UK leaves the EU. This court will hear cases related to existing European patents, as well as the new unitary patent which is set to be introduced. The unitary patent will be a single patent enforced through a single court, covering numerous European states.

In the event of a “No Deal” Brexit

In the event of a no deal scenario, there will be no significant changes to the future application process for patents and pending applications will continue to be assessed on the same basis as now.

Click here for more information

What do we know so far?

UK organisations with an EU trademark currently have their intellectual property rights protected across all EU member states. Businesses can also maintain trade marks and registered designs through the international system (Madrid & Hague). This involves paying a single set of fees to ensure your trademarks are protected in 113 territories around the world, including the UK and the EU.  

The Government has committed to protecting existing EU trade marks post-Brexit. Organisations with EU registered trade marks (based in the UK) will be issued with a new UK registered trade mark. If your organisation has an existing EU registered trade mark then this will continue to be valid in the remaining EU member states.   

It is not currently clear as to whether trade marks issued through the international system (Madrid & Hague systems) will continue to receive protection post-Brexit. The Government is currently in talks with the World Intellectual Property Organisation on this matter. 

In the outline Political Declaration on the EU & UK’s future relationship released in November 2018, the EU & UK set out their intention to protect and enforce intellectual property rights “beyond multilateral treaties”. 

In the event of a “No Deal” Brexit

In the event of a no deal Brexit, the UK Government has stated that they will continue to protect existing registered EU trademarks. This will be achieved by the Government issuing a new UK equivalent trademark (registered in the UK) which will apply when the UK exits the EU. This means that your applications will be treated for all intents and purposes as if they had been applied for and registered under UK law. As a result, your trade mark will have to be renewed in the UK in future. If your organisation has an EU registered trademark then this will continue to be recognised in EU member states after the UK leaves.   

For organisations that have ongoing applications at the time of the UK’s exit from the EU; they will have a total of nine months from the exit date to reapply in the UK. Their application will retain the date of the EU application for priority purposes and will be submitted using the standard application process for registered trade marks in the UK. Organisations will need to pay a fee for the cost of refiling the application. Please note that if you have a pending application for an EU trade mark then you will not be notified of the need to reapply for protection in the UK.

It is not currently clear as to whether trade marks issued through the international system (Madrid & Hague systems) will continue to receive protection in a no deal scenario. The Government is currently in talks with the World Intellectual Property Organisation on this matter.  

Click here for more information

What do we know so far?

UK organisations will continue to be able to register for EU wide trademarks in the same way they do now once the implementation period ends. 

In the event of a “No Deal” Brexit

In a no deal scenario, the same process will continue to apply for UK businesses who wish to register for an EU trademark.

Click here for further information from the UK Government.

Click here to apply for an EU trade mark.

What do we know so far?

The UK and EU member states currently participate in a number of international treaties on copyright and related rules. These treaties obligate the signatories to provide copyright protections for works made in other countries and form the basis of their domestic legislation. These rules are not conditional on the UK’s membership of the EU and will continue to apply after the exit date.

However, the EU has a number of additional copyright laws in place that go further than the provisions included in the international treaties. These laws contain further cross border protections including database rights, online content services, orphan works, collective management and satellite broadcasting etc. If a Withdrawal Deal is agreed, these protections and benefits will continue to apply until the end of the transition/implementation period (expected: 31st December 2020). It is not yet clear as to whether these protections will continue to apply after the UK exits the EU. This is still subject to negotiation.

The political declaration setting out the framework for the future relationship between the EU and the UK states that both sides are aiming for the protection and enforcement of intellectual property rights beyond multilateral treaties to stimulate innovation, creativity and economic activity.

In the event of a “No Deal” Brexit

In the event of a no deal scenario, the main international treaties on copyright rules (that the UK and EU member states are signatory to) will continue to apply even if the UK leaves without a deal.

However, the additional EU laws which go even further on reciprocal protections will not continue to apply for the UK in the event of a no deal. These directives and regulations cover a number of cross border and protections including database rights, online content services, orphan works, collective management and satellite broadcasting etc.

In the event of a no deal, the technical notices released by the Government advise UK businesses to seek legal advice in regards to the following implications:

  • There will be no obligation for EEA states to provide database rights to UK nationals, residents, and businesses. UK owners of UK database rights may find that their rights are unenforceable in the EEA.
  • The Portability Regulation will cease to apply to UK nationals when they travel to the EU. This means online content service providers will not be required or able to offer cross-border access to UK consumers under the EU Regulation. UK consumers may see restrictions to their online content services when they temporarily visit the EU.
  • UK-based satellite broadcasters that currently rely on the country-of-origin copyright clearance rule when broadcasting into the EEA may need to clear copyright in each member state to which they broadcast.
  • Orphan works copyright exception. UK-based Cultural Heritage Institutions that make works available online in the EEA under the exception may be infringing copyright.
  • Collective management of copyright. UK Collective Management Organisations will not be able to mandate EEA Collective Management Organisations to provide multi-territorial licensing of the online rights in their musical works.
  • Cross-border transfer of accessible format copies of copyright works. The UK intends to ratify the Marrakesh Treaty after exit but ratification will not have taken place before 29 March 2019. Between exit and the point of ratification, businesses, organisations or individuals transferring accessible format copies between the EU and UK may not be able to rely on the EU Regulation

Click here for more information from the UK Government.


Data & Contracts

What do we know so far?

If the UK reaches a Withdrawal Agreement with the European Union, then you will not need to change the terms of your contract with your EU partners until the end of the transition/ implementation period (expected: 31st December 2020) at the earliest. However, it is not yet clear as to whether the free flow of data from the UK to the EU will continue after the end of the implementation period.  This will depend on whether the EU makes an adequacy decision which would allow the transfer of data to continue without restrictions. Therefore, due to the uncertainty, it is important that your business consults with your EU partners on a contingency plan for if the free flow of data between the UK and the EU ends. This will most likely involve amending the terms of your contract.     

Many companies are currently reviewing the terms of their existing contracts with EU/other partners to understand what would happen in the event of the implementation of any tariffs, delays at borders and further fluctuations in the value of the pound. Many are also considering applying “Brexit clauses” to new and re-negotiated contracts which will  trigger a change in rights/obligations  in response to key Brexit related scenarios or events.

In the event of a “No Deal” Brexit

In the event of a no deal Brexit, it is highly likely your organisation will need to consider changing the terms of your contract with EU partners, at least in the short term, to ensure the transfer of data can continue without restrictions. If the EU does not agree to an adequacy decision then you will need to make permanent changes to your contract. The Government recommends standard contractual clauses as an alternative. These are model data protection clauses that enable the free flow of personal data when embedded in a contract. There are also certain circumstances in which your EU partners may be able to rely on an exemption to continue transferring personal data.

Click here for more information from the UK Government.

What do we know so far?

As a member of the EU, UK data protection laws are governed through the General Data Protection Regulation (GDPR). Under GDPR, organisations are free to transfer personal data within the EU. However, an organisation can only transfer personal data outside of the EU if there is a legal basis for doing so. If the UK and the EU reach a Withdrawal Agreement, then the current rules will continue to apply until the end of the transition/implementation period (expected: 31st December 2020).

The political declaration states that both sides intend to make a decision on whether they will continue to recognise each other’s data protection standards by the end of 2020. If the EU grants an adequacy decision in regards to the UK, then this will maintain the free flow of personal data between the EU and the UK after the implementation period.  

In the event of a “No Deal” Brexit

In the event of a no deal Brexit, it is highly likely that UK organisations will continue to be able to send personal data from the UK to the EU and vice versa. The Government has said that due to the degree of alignment between the UK and the EU’s data protections laws, they would continue to allow the free flow of personal data from the UK to the EU. However, it is important to note that the Government has said they will continue to keep this under review.  

The European Union currently has an adequacy mechanism in place to allow the free flow of data between the EU and third countries. This means that the European Commission decides as to whether the third country data protection laws are equivalent to the EU’s. If they deem the UK laws to be equivalent, they will make an adequacy decision allowing the transfer of personal data to the UK to continue without restrictions. As the Government will be incorporating GDPR into UK law once we leave the EU, it seems highly unlikely that the EU would refuse to make an adequacy decision considering that the UK and EU’s level of personal data protection laws will be aligned. However, the European Commission has stated that they can only make an adequacy decision after the UK leaves the EU and becomes a third country. This means that even if the European Commission agrees to an adequacy decision, there is likely to be an initial crossover period preventing the free-flow of data while it is being negotiated. If the European Commission does not make an adequacy decision, then the Government recommends that organisations should assist their EU partners in identifying a legal basis to allow the transfer of personal data to continue.

Click here for more information from the UK Government.


How can the Chamber support my business?

Brexit Clinics

FREE events giving local businesses an opportunity to speak with guest experts about how key aspects of Brexit might impact their organisation and what they can do to prepare.

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Training courses

Ensure that your staff are fully prepared for all Brexit scenarios, whether it be in export documentation or knowing how to conduct your business deals in new markets.

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Export Documentation

Are you prepared for the post brexit world with your export documentation? Learn about important documents used in international transactions, why you need them and how to complete them.

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Brexit Toolkit

FREE resources for businesses on Brexit including answers to commonly asked questions and local facts and stats

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Translations and language services

Our team can help you through various channels such as bespoke language training for new markets with specific language for your sector. We also offer interpreting and translation options to cater for your company’s or individual needs.

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Chamber Membership

Want to save up to 20%? All of our members benefit from discounted services within the documentation team and translation services as well as the expertise from the International team.

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Transatlantic Chamber

Are you looking at trading with new markets? North America is the biggest receiver of UK exports. Match your business with the relevant US state or Canadian province.

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Commonwealth Chamber

Have you explored trading with the Commonwealth? Access insight into trading with 53 countries across the globe. Take part in monthly market familiarisation sessions & gain regular insight on Commonwealth opportunities.

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If you would like: more information on how the GBCC can support businesses through Brexit, to provide a case study on your Brexit preparations, to recommend a speaker for a GBCC Brexit event, to request a GBCC speaker on Brexit or to enquire about sponsoring Brexit related research please leave your contact details below: