Summary of Brexit no deal notices

With the Brexit clock rapidly counting down, the Government has been preparing for a range of scenarios, including a ‘no deal’ Brexit, the worst-case scenario where an agreement with the EU on the terms of withdrawal is not reached.

Technical notices have been published to give business more information to enable them to better plan for a no deal and are intended as a guide as to what Government will do in a no deal scenario. These notices can be found here. They are not the preferred option and the Government is clear that they want a proper agreement. They also do not necessarily reflect what Government would do in the event of a no deal plus transition (i.e. no deal in December 2020), as different options may be available given a time delay.

While it is important for the Government to give further information on its intended policy in the event of a no deal Brexit, these notices show more clearly than ever why it is so important that the UK secures a comprehensive deal with the EU. They show that No Deal would mean significant new bureaucracy for businesses, and higher costs and reduced choice for consumers. While a no deal remains unlikely, tech businesses in the UK should review relevant technical notices to ensure that they are aware of actions they may need to take should that scenario come to pass. techUK has summarised the key takeaways from some of the key notices below.

If you would like to discuss these with techUK then please email Giles Derrington: giles.derrington@techuk.org

 

Data Flows

  • The Data flows paper fails, in techUK’s view to give the full picture, focusing instead on the process for delivering Standard Contractual Clauses (SCCs).
  • The notice states that the preferred position remains adequacy and that this will be pursued
  • The notices say that the UK will unilaterally accept data flows from the UK to EU.  While not set out in detail, we assume this effectively means unilaterally granting an adequacy decision to the EU.
  • The paper states that to allow transfers from EU to UK, EU partners will need a legal basis- most likely SCCs.  It advises that business work with EU partners to identify the appropriate legal mechanism.
  • As EU to UK transfers will require an EU legal basis, not a UK one, the paper says that EU SCCs can be used, without the need for the UK to develop its own SCCs.
  • However, this does not help businesses who need to transfer on to third countries.  We have raised this with DCMS who says they will take it away and look at further.
  • The notice also does not give any information on Binding Corporate Rules (BCRs) and how existing BCRs approved by the ICO will be transferred in the event of No Deal.  We have also raised this with DCMS.
  • Finally, the notice does not set out any plans to support smaller businesses with the costs of putting in place SCCs or other transfer mechanisms.  We have said that DCMS need to pick this up, though they say this may come in further notices if and when a no deal looks more likely.

Telecoms

  • The notice on telecoms is clear that Government’s intention is for there to be no substantive changes to UK regulation of telecoms.
  • It highlights that parts of the Communications Act 2003 will need to be corrected using powers in the Withdrawal Act, including things like removing references to the promotion of the Single Market.
  • The notice says that if the EU Electronic Communication Code is adopted before exit day but not transposed until after we leave, the UK is “minded to implement where appropriate its substantive provisions.”
  • The paper also confirms that rules on spectrum allocation will be corrected so that Ofcom can continue to use an unchanged process.
  • Finally, the paper makes clear that UK telecom providers can continue to provide cross border services under the WTO’s GATs rules.

Space Sector

  • The UK will no longer participate in Galileo, the EGNO or Copernicus and so UK companies will not be able to bid for contracts for the programmes. 
  • However, we will continue to be able to utilise freely available and open source data from the programmes, such as position, navigation and timing information.
  • The Public Regulated Services will no longer be available in the UK when it is completed in Mid-2020.
  • The notices is not clear on existing contracts, saying that the UK “is seeking clarification” on these contracts.
  • On Galileo, the Government confirms that it is to invest £92 million from Brexit readiness fund to design a UK Global Navigation Satellite System.  This will “inform the decision to create a UK alternative to Galileo”.
  • On Copernicus, users could lose the right to higher bandwidth access from the Copernicus Sentinels.  UK will also lose data sourced from any contributory missions.

Mutual Recognition under the “New Approach”/CE Marking

  • The notice confirms that the UK will unilaterally accept goods that meet EU requirements and have the appropriate mark in the event of a No Deal.
  • This includes goods already on the UK market from the EU.
  • However, UK notified bodies will no longer be recognised by the EU, therefore any manufacturers selling goods in the EU that have been approved in the UK will need to have them reapproved by an EU notified body.
  • Manufacturers can choose to ask the UK notified body to transfer the relevant files to a new EU body, though even in this case, a new mark.
  • The UK will also convert UK notified bodies into new UK ‘approved bodies’ able to issue a UK specific mark. This will be optional as the UK will continue to recognise EU markets.
  • However, the paper suggests that this option will be time limited. This means that it is possible in the future that the UK will cease to recognise the EU mark and require UK approval via an approved body.
  • The papers states that the Government will lay out further plans on this issue later in 2018.

Mutual Recognition

  • The notice confirms that the UK will no longer be in scope of EU rules on mutual recognition of products.
  • This means that anyone selling goods to the EU will have to meet the national requirements of the first country to which they export.

Customs

  • The UK will operate a customs border with the EU in the event of a no deal.
  • Businesses will therefore have to register for a UK Economic Operator Registration and ID (EORI) number in order to export to the EU.  Registration for EORI numbers for EU export will open in advance of March 2019.
  • Business should also ensure that their INCOTERMS recognises their exporter status with the EU.
  • On the UK side, Government will aim to continue to conform with the EU’s Excise Movement and Control System, but it is not clear whether it will have full access to the system.
  • The paper does not make any references to AEO status or whether existing mechanisms with third countries will continue to apply.  It is likely that this is contained in the as yet unpublished paper on existing EU trade agreements.
  • The paper also suggests businesses explore measures to mitigate disruption, including warehousing, Inward Processing and Temporary Admissions.

VAT

  • The paper states that the UK will aim to keep the VAT regime as close as possible to the EU system.
  • The Government will introduce a Postponed Accounting mechanism for all EU and Non-EU good entering the UK.  This means that businesses will be able to account for VAT on their VAT return rather than paying VAT at point of entry and claiming back.
  • For VAT on small parcels (up to £135), the Government will seek to implement a system to enable overseas businesses to pay the VAT, rather than charging the recipient of the package.
  • This will mean an additional “tech based solution” in which oversees businesses shipping a parcel to the UK will have to register with HMRC for VAT via an online portal. This is likely to be an issue for third party suppliers via ecommerce portals (as is current case for non-EU suppliers currently).
  • For shipments to the EU, the UK will no longer be part of the EU VAT Refund scheme automatically.  Therefore businesses seeking to reclaim VAT for an EU export will have to register through the scheme through the non-EU route (i.e. going to individual Member States tax authorities).

Tariffs

  • The UK will have a full tariff regime with the EU in event of a no deal
  • The UK will aim to meet the same tariff scheme as the EU at WTO
  • It is not clear what this will mean in terms of UK compliance with Rules of Origin Requirements.
  • The UK will seek to continue preferential tariffs on developing countries, such as the General Scheme of Preferences

Broadcast and Video on Demand

  • The paper confirms that the AVMS Directive will no longer apply and the UK will be a third country for EU purposes.
  • It confirms that under Recital 54 of the directive, EU Member States will be able to impose whatever measures they deem appropriate.
  • However, for the 20 EU Member States that have signed and ratified the European Convention on Transfrontier Television (ECTT), they will be required to permit reception of broadcasts from the UK- though national interpretation of the ECTT is likely to make this a complex picture.
  • The UK will be required to license receptions from ECTT signatories as a signatory to ECTT itself.
  • The paper notices that the ECTT’s standing committee to resolve disputes hasn’t met since 2010 and requires arbitration.
  • Companies will need to assess each individual licence and secure a local licence for any country receiving broadcast that isn’t signed up to the ECTT.
  • Technically after exit HQs can remain in the UK if there are decisions and a significant part of the workforce based in an EU country, so as to give EU landing rights.  However, this is likely to be highly complex.
  • Finally, the paper notes that a UK company may be able to apply for UK landing rights under Art 2(4) of the AVMS if it provides an uplink service in a specific country- this is most likely to apply to France or Luxembourg.

Trade Remedies

  • The Trade Bill creates the Trade Remedies Authority.  This will be in place by March 2019.
  • All existing trade remedies imposed as part of the EU will be reviewed by the TRA and adjusted to the UK market (we anticipate that some will not be needed as they don’t apply to the UK at the moment)
  • When the TRA is operational, companies seeking trade remedies should approach the TRA in tandem with the Commission until we leave the EU.
  • After leaving the EU the TRA will unilaterally handle any decisions on UK trade remedies.

Export Control

  • Rules on control of exports of military items will not change as this is a reserved issue.
  • On Dual Use items however, while the aim will be for the system overall not to change, there will be additional requirements.
  • Existing Export Licences for dual use items from the UK will no longer be valid (as approve at EU level). Therefore, those with existing licenses will need to reapply.
  • There will be new requirements for dual use export licenses for products moving from UK to the EU.
  • The Export Control Joint Unit will be creating a new Open General License for export to EU countries shortly.

Banking and Financial Services

  • The UK will treat the EEA under the rules of a third country regime.  This will mean that EU licenses will no long apply in the UK.
  • However, the UK will apply Temporary Permissions, giving EEA license holders from outside the UK three years in which to register for a UK license.
  • UK-based payment services providers will lose access to the Single European Payments Area and TARGET2.  However, the Government is seeking to align as much as possible to enable third country access to SEPA.
  • The paper recognises that these changes will likely mean higher charges on credit card transactions and slower processing of transactions that move from one currency to another.
  • The Government will bring in a range of new pieces of legislation to allow for transition, including regulations around Credit Rating Agencies, Data Reporting Services and Depositary Authorised Funds.
  • EEA Funds will likely need to take further action to comply with new EU rules although what is not clear from the papers.
  • The paper also references the importance of free flow of data and links to the as yet unpublished paper on this issue.

Horizon 2020

  • As already announced by the Chancellor, the Government will guarantee the funding for any Horizon 2020 bid that has been successful until 2020.
  • The paper says the UK is “seeking to discuss” with the EU cases where the consortium lead is from the UK and how this will work with the responsibility such as disseminating information and papers.
  • UK Research and Innovation will soon be opening an online portal through which all existing UK participants in Horizon 2020 will have to register in order to allow Government to guarantee their funding to 2020.
  • Non-UK parts of a consortium which includes UK elements do not have to register with the portal.
  • The UK intends to continue participation in all third country calls, but this will mean no longer having access to European Research Council grants, SME Instruments and certain medical research related funds such as the Marie Curie Actions programme.

EU funded programmes

  • The papers reassert the Government’s commitments to maintain funding of all EU funded programmes until 2020.
  • The paper says that on awards where UK wins a bid that runs beyond that date “we will work with the commission to ensure continued participation”.  It is not entirely clear what this means.

State Aid

  • The UK will retain effectively the same state aid rules as currently exist.
  • The Competition and Markets Authority will take over responsibility for agreeing state aid exemptions and barriers.
  • All existing state aid exemptions and barriers will automatically remain in place.
  • Any new applications under state aid will, from March 2019, by made to the CMA.

Workplace rights

  • The vast majority of rules in this area will stay the same.
  • However, there may be some issues around insolvency protection for companies operating in EU Member States.  Automatic protection will cease and any protection will depend on companies national rules.
  • Companies should therefore ensure they are aware of what protections exist for insolvency within any member states in which they have a business presence.

Medical Devices and Clinical Trials

  • The Medicines and Healthcare Products Regulatory Agency (MHRA) will take over from the European Medical Research Network as the regulator of all medicines and devices.  They will consult on early autumn on the legislative changes necessary to facilitate this move.
  • The UK will unilaterally recognise medical devices approved in the EU and CE marked. 
  • However, MHRA will no longer be able to oversee Notified Bodies and so no UK assessment or approvals will be valid in the EU. Devices for EU markets will have to be tested with an EU Notified Body within a Member State.
  • The UK will continue to apply existing medicines and clinical trials regulations and will seek to comply with the Medical Devices Regulation and the In Vitro Diagnostic Regulation in 2020 and 2022 respectively as they come in to force.
  • They UK will also seek to align with the EU Clinical Trials Regulation when it is passed into law, which is expected to be before Exit Day.
  • For licensing of medical trials companies will likely need both an EEA and UK legal presence.

Civil Nuclear Regulation

  • The Office for Nuclear Regulation will run oversite of all regulation after March 2019.
  • Exiting supply contracts approved by the Euratom Supply Agency will need reapproved if there is both a UK and EU operator involved and the supply period extends past March 2019.

Nuclear Research

  • The UK will no longer be able to bid for Thermonuclear Experimental Research Contracts.
  • However, the UK Government is on track to sign up to the Bilateral Nuclear Cooperation Agreement ahead of March 2019.
  • The Government reiterates its commitment to fund Joint European Tours until 2020, subject to the Commission agreeing the tours’ extension to 2020 which is expected shortly.

Erasmus

  • The paper simply says that Government will “need to reach an agreement with the EU” to allow continued participation.

Tobacco and E-Cigs

  • The paper says that the UK will continue to apply all legislation affecting tobacco products.
  • However, picture warnings on tobacco products will all need to be changed as the EU owns the copyright on the current pictures.  This will likely mean requiring substantially different package printing for UK/EU markets.

Roaming

  • The notices say that Government will legislate to require UK operators to apply financial limits on data usage abroad.  This will cap usage at £45 per month and require the same notifications around data usage as currently exist.
  • It confirms that no deal does not in any way prevent UK operators agreeing or honouring arrangements with EU operators.  However, this is entirely at the discretion of the contracting parties.
  • This means Government cannot guarantee roaming free of charge for UK consumers- and make clear in the notice it will depend on companies.
  • The notice also highlights inadvertent roaming in Northern Ireland, but does not set out a process to deal with such cases (where a person in Northern Ireland picks up a Republic of Ireland signal).
  • Finally, the paper confirms that there is no intention to change existing rules around mobile contracts or existing Ofcom guidance to consumers.

Nominated Persons

  • UK nominated persons will no longer be recognised in the EU. This means any company using a UK authorised representative should seek to hire a nominated person in the EU for all EU businesses.
  • The UK will unilaterally accept existing EU authorised representatives to deal with the UK.  However, new authorised representatives after Exit Day will be required to be located in the UK.

Mergers and Anti-Trust

  • The notice states that the Competition and Market Authority (CMA) will take responsibility for investigating mergers and anti-trust enforcement, with the Withdrawal Act used to give the CMA the relevant powers.
  • The domestic rules will remain the same, meaning no changes to the issues that will be investigated or the thresholds at which mergers become subject to investigation.
  • However, the EU will no longer be able to investigate UK aspects of mergers or anti-trust cases and the UK will no longer be part of the Civil Judicial Cooperation regime.
  • This also means the UK will no longer be part of the one-stop-shop on anti-trust cases, meaning companies could be required to comply with both UK and EU rules.
  • In addition, in merger cases, companies that meet the threshold may be investigated by both the CMA and the European Commission.
  • The paper strongly advises anyone engaged in existing merger applications at EU level, or in anti-trust cases, to take independent legal advice.
  • The notice does state that the companies will continue to be able to pursue EU breaches of anti-trust that arise post exit through the UK courts via a Foreign Tort claim. They may also pursue damages based on EU decisions through UK courts.

Public Sector Contracts

  • The UK will no longer be able to post its public sector contracts out for tender on the Official Journal of the European Union (OJEU) or Tender Electronic Daily (TED).
  • The UK will therefore create its own e-notifications system to replace OJEU/TED in the event of no deal. This system will be ready by exit day and will be free to access.
  • All existing opportunities listed on OJEU/ TED from the UK will be listed on this new system.
  • Suppliers will need to register with the new UK system when it opens on Exit Day.
  • Suppliers will also continue to be able to view OJEU/TED for EU opportunities.
  • The paper also confirms the Government’s intention to accede to the Government Procurement Agreement at WTO, meaning the basic principles of procurement will remain in place.

Travelling to the EU

  • The paper confirms that in the event of a no deal, the UK will be a third country for EU member states.
  • This means that to travel to the EU, a person will need to go through a third country procedure for Schengen processes.
  • These procedures limit a person’s stay to 90 days and require that a person has a passport that is valid for not longer than 10 years and not shorter than three months after the final point in which they could stay in the EU.
  • This three-month threshold coupled with the 90 day maximum stay means that in reality a person cannot travel to the EU unless there passport has more than 6 months.
  • Blue passports will be available for late 2019, but existing passports will not automatically have to be replaced.

Driving in the EU

  • The technical notice confirms that UK driving licenses will no longer be recognised in the EU in the event of a no deal. This means that in order to drive in the EU a person will have to apply for an international driving license.
  • An international driving license costs £5.50 and can be obtained from most Post Offices. However, some have raised concerns of the capacity of the Post Office to deliver against demand.

Trade marks and designs:

  • Existing EU trade marks and registered community designs will still be protected and enforcement in the UK by providing a UK equivalent trade mark or design.
  • Ongoing EU trade mark or registered design applications at the point of exit will have nine months to apply in the UK for same protection, retaining the date of EU application for priority purpose. Pending applications for trade marks or designs will not be notified automatically and will need to decide whether or not to apply for a new UK mark/design.
  • Government will work with WIPO (World Intellectual Property Organisation) to provide continued protection after March for Trade Marks and designs filed under the Madrid and Hague systems which designate the EU.
  • Existing EU trade marks or registered designs will have a new UK equivalent right which will come into force on exit from the EU with minimal administrative burden. The trade mark or design will then be maintained as if issued under UK law so:
    • Subject to renewal in the UK
    • Can form basis for proceedings before UK courts or IPO tribunal
    • Can be registered and licenced independently from the EU
  • Existing EU trade marks and designs will continue to be valid in EU27
  • Rightsholders will be notified of new UK right and offered an opt-out
  • Provisions will be made for any ongoing legal disputes at the point of exit.

Patents:

  • Relevant EU legislation will be brought into UK law via the Withdrawal Act 2018
  • Existing systems will remain in place, operating independently from the EU, with all current conditions and requirements
  • EU legislation on supplementary protection certificates will be kept in UK law with a new UK version
  • Any existing rights or licences in force in the UK will remain in force after March 2019
  • No action required from rights holder or licence holder.
  • UK membership of UPC has two scenarios, depending on the outcome of the German constitutional challenge and whether the court is in force at the point of exit (it is not clear whether or not it will be):
    • If the Court is in force: The UK will not participate in the UPC. Domestic legislation already passed to bring court into force will never take effect in the UK. There will be no changes for UK businesses in this scenario.
    • If the Court is in force: The UK will become a member of the court and will explore remaining a part however if it needs to withdraw businesses can still use their new UPs in the EU27 but will not be valid in the UK. New UK-UPs will be created to replace these and provide continuity.

Copyright:

  • Most copyright law is international through various treaties which apply to the UK independently of its membership of the EU.
  • However there is a set of EU law based on cross border copyright and related rights such as:
    • Sui Generis database rights
    • Portability of online content services
    • Satellite Broadcasting and country of origin
    • Orphan works
    • Collective management of copyright
    • Cross-border transfer of copies of accessible copyright
  • On exit, in a no deal scenario, all EU cross-border reciprocal mechanisms will cease to apply to the UK.
  • EU directives and regulations will be retained by reciprocal nature will end. Amendments o legislation will be required to achieve this.

Exhaustion of intellectual Property Rights:

  • In a no deal scenario the UK will continue to recognise EEA regional exhaustion regime from exit day i.e. the UK will recognise a product placed in the EEA as exhausted
  • There will be no change to the rules affecting the imports of goods into the UK
  • However there may be a change on the rules of goods moving from the UK to the EEA and businesses may need to check with EU rights holders to see if a provision is required
  • UK Government is undertaking a research programme to see how exhaustion should work in the future under these circumstances
  • Goods placed in the UK after exit will not be considered exhausted in the EEA which means businesses exporting these goods from the UK to EEA may need rights holders consent. Businesses may need to seek legal advice on how this could affect their business model.

Generating low-carbon electricity:

  • Guarantees of origin from combined heat and power issued in Great Britain and Northern Ireland will no longer be recognised in the EU.
  • Existing contracts with EU countries’ electricity suppliers may be compromised if the contract requires the transfer of a guarantee or origin by the EU.
  • Renewable Energy guarantees of energy in UK will not be recognised in the EU. If this is required in a contract it may be compromised.
  • Certification of installers of certain microgeneration technologies – UK will continue to recognise EEA certification but UK’s will not be automatically recognised in the EEA.
  • Renewable electricity support schemes:
    • Feed-in-tariff schemes and contracts for difference: Government will remove legislation references to UK as an EU country. Scheme administrators will engage with electricity suppliers to inform them of their obligations under the levies
    • Renewable Obligations: Current sustainability requirements under ROs will continue to apply for bioliquids, solid and gaseous biomass.

Regulation chemicals (REACH):

  • Companies producing or exporting chemicals from outside the EEA must comply with REACH by ensuring the EEA-based importer they supply fulfils the requirements of REACH, or by producing an ‘only representative’ (OR). An OR is based in the EEA and acts as an agent to carry out tasks and responsibilities of importers to comply with REACH.
  • In No Deal situation, Withdrawal Act would ensure legislation replaces EU legislation and establish a UK regulatory framework
  • UK would build domestic capacity to deliver functions currently delivered by ECHA.
  • Legislation would preserve REACH with technical changes.
  • By doing this the UK would continue to monitor and evaluate chemicals in the UK to reduce risk posed to human health and the environment with minimised disruption to the supply of chemicals.
  • Health and Safety Executive (HSE) would act as the lead UK regulatory authority.
  • The UK’s new regulatory framework would:
    • Enable registration of new chemicals in a new and separate UK IT system (although this will be similar to the EU system)
    • Provide specialist capacity to evaluate the impact on health and environment
    • Ensure regulators and enforcement capacity in the HSE, Environment Agency and other regulators.
    • Enable them to recommend controls in response to the hazard or risk of substances
    • Provide an appropriate policy function in Defra and devolved administrations.
  • The UK would not be legally committed to maintaining medium or long-term regulatory alignment with the EEA.
  • Companies registered with REACH would no longer be able to sell into the EEA market without transferring their registrations to an EEA based organisation.
  • Companies will need to take action to preserve their EEA market access.
  • UK downstream users importing chemicals from the EEA would face new registration requirements. Under UK replacement of REACH, importers would have a duty to register chemicals. UK downstream users would not longer be able to rely on authorisation decisions delivered to companies in remaining EEA countries.
  • Aim to continue access to UK market:
    • There would be a transitional period before the full obligations would fall on the importers who would otherwise be most affected.
    • Defra would: carry across existing REACH registrations by UK-based companies directly into UK replacement of REACH via grandfathering; set up a transitional light touch notification process for UK companies importing chemicals from the EEA before the UK leaves the EU that don’t hold a REACH agreement; carry into the UK system all existing authorisations to continue using higher risk chemicals held by UK companies
    • Businesses with REACH registrations would have to register with new UK IT system to validate grandfathered registrations within 60 days of leaving the EU.
    • Businesses would have two years to provide the UK authority with full data package that was supplied for EU registration and held on the ECHA IT system.
    • Businesses that have imported chemicals from EEA before UK exit would need to notify the UK authority and provide data on the chemicals within 180 days of leaving (if there is no REACH registration).
    • Importing businesses would be responsible for identifying appropriate risk management measured and recommending them to their customers.
  • After no deal businesses wanting to place chemicals on both UK and EEA market would need to make two separate registrations.
  • In order to maintain EEA market access:
    • Businesses need to refer to ECHA guidelines and other no deal notifications
    • UK registrants would need to transfer their registrations to an EEA-based entity.

Accounting and Auditing

  • The technical notice sets out a number of changes that will impact auditing and accounting functions. However, the Government is commented “as far as possible” to continuing the same rules as exist currently.

Accounting

  • UK unincorporated subsidiaries and parent companies of EU businesses will continue to be subject to the UK accounting regime.
  • For UK subsidiaries or parents of EU incorporated companies, certain exemptions available under the Companies Act 2006 will no longer apply.  For example, the exemption from having to provide individual accounts if it is a dormant entity that is part of a group with an EU parent companies will only apply after a no-deal Brexit where the parent company is established in the UK.
  • Any branches within the EU of UK companies will be treated as a third country and therefore required to comply with the law of the individual member states when it comes to accounting and reporting.  This means that in some member states, compliance with the Companies Act 2006 regime may no longer suffice.
  • UK companies listed on an EU market may be required to give additional assurances that their accounts comply with International Financial Reporting Standards.
  • As a result of these changes, the type of information collected by accountants may need to change, requiring system changes to capture the appropriate data.

Auditing

  • Those with an EU auditing qualification operating in the UK will be given a transition period until December 2020. During this time they will be able to apply for an aptitude test to ensure their qualification remains valid after this transition period.
  • Post-December 2020, an EU auditing qualification will not be recognised in the UK and they may no longer be offered just an aptitude test in order to be able to continue to practise.
  • This does not apply to Irish auditors as the Irish audit system is based on the UK qualification.
  • EU audit firms will, post-December 2020, no longer be recognised among the required majority of suitable qualified owners.  This means that EU auditors will not be able to own a UK audit firm.  The same will apply for UK firms owning EU auditing firms.
  • Audits of EU businesses seeking to raise capital by issuing sharers of debt security on regulated markets will need their auditor to be registered with the Financial Reporting Council.  The FRC will need to be able to make inspections in the Member State where the business is registered.

Business structure

  • Branches of EU companies in the UK will become subject to the overseas companies regime.  While there are likely to be limited additional burdens attached, they will be required to the same information and filing requirements as current third country branches.
  • The same will apply for UK companies in the EU.  This means that UK citizens may be limited in owning and managing companies in the EU depending on the sector and the individual rules of the Member State. These additional burdens may include things like meeting additional requirements in order to purchase real estate. Certain types of business (such as running a pharmacy) may be prohibited altogether in some member states.
  • UK companies and Limited Liability Partnerships (LLPs) that have central administration and a principle place of business in the EU may no longer have their limited liability recognised in those Member States operating under the ‘real seat’ principle of incorporation.
  • On cross border mergers, post-Exit Day, in the event of a no deal, Member States will no longer be required to give effect to mergers under EU Directive 2005/56/EC.  It is strongly advised that any mergers are completed before Exit Day.
  • UK investors in EU businesses may also face restrictions on the amount of equity that can hold in some sectors.  This is dependent on the rules within each individual Member State.
  • Certain businesses structures will no longer be able to be register in the UK.  Specifically: European Economic Interest Groupings, European Public Limited Liability Partnerships and European Grouping of Territorial Cooperation.

Geo-blocking

  • In the event of no deal the UK Geo-blocking Regulation, due to come into force on 3 December 2018 will cease to have effect.
  • This means that businesses in the UK will be able to discriminate between EU, UK and third country customers.  For example by offering different terms of use.
  • However, the EU Geo-blocking Regulation will continue to exist.  Therefore a business operating in the EU will not be able to discriminate between customers of different member states.
  • This essentially means that companies meeting the EU Regulations as of December, will not have to take any action, but could, in the event of no deal, chose to offer different terms between the UK and the EU.

Existing EU Free Trade Agreements

  • This notice has very little specific information.  It states that the UK “will seek to bring into force bilateral UK/ Third Country agreements from Exit day or as soon as possible thereafter.”
  • The notice does not confirm or deny which existing FTAs the UK will seek to ensure are brought into force on Exit Day in the event of a no deal, or whether any will be able to do so.
  • The notice is also clear that, even if FTAs can be re-signed as bilateral agreements, these may be subject to changes that affect companies.  For example, Rule of Origin requirements (RoO) may change meaning that components from the EU cannot be assumed to make up part of any RoO requirement to enable utilisation of a specific FTA.
  • The notice also makes clear that the Government continues to work to lay its schedule at WTO and specifically the “negotiations are ongoing for us to become an Independent member of the WTO’s Government Procurement Agreement.”

Recognition of Professional Qualifications

  • The Mutual Recognition of Qualified Professionals (MRPQ) Directive will no longer apply in the event of no deal and there will be no system for mutual reciprocal recognition of qualifications between the UK and the EU.

Overall

  • The technical notices says that UK “will ensure that professionals arriving in the UK from the EEA will have a means of seeking recognition of their qualifications”. 
  • However, this does not amount to unilateral recognition of qualifications from the UK for EEA citizens.  Automatic recognition will no longer apply.
  • Where an application for recognition of a qualification has started before Exit Day “as far as is possible” the UK will allow this to be concluded.
  • The applications of a UK citizen applying for recognition in the EU will depend on the rules of the individual Member State

Legal services

  • Specifically for lawyers, the Legal Services Directive will end and EEA lawyers will be treated the same as other third countries lawyers in the UK.
  •  They will no longer be able to seek admittance to the UK legal system based on their professional experience.

Provision of services

  • EEA businesses will no longer have professional access rights and protections. 
  • Instead each relevant regulatory authority in the UK will treat EEA businesses the same as those from other third countries.
  • However, as the UK is a highly liberalised market, there are unlikely to be significant additional burdens.
  • On the other hand, for UK businesses offering services in the UK they will no longer be covered by the EU Services Directive, meaning it will be up to individual member states whether they want to impose requires, such as nationality requirements on those operating in services where professional qualifications are required.

Short term permission for provision of services

  • In the event of a no deal, travelling to provide services in the EU will be subject to the rules of individual member states.
  • Companies should check the visa and work permit requirements of any country in which they operate a contract that requirements people to travel to services.

Export and import of chemicals

  • The UK will establish its own independent Prior Informed Consent (PIC) regime in order to meet the Rotterdam Convention.
  • The notice states that this will “initially” be based on the EU’s regime.
  • UK exporters will continue to be required to notify the Health and Safety Executive (HSE) and the UK PIC.
  • UK companies will no longer have access to the ePIC and will instead need to use the UK PIC’s Designated National Authority (DNA) to notify of export from the UK.
  • It is the government’s intention that existing export notifications for 2019 that are already in place are able to continue to be recognised.
  • However, where explicit consent has been given by an importing country under the EU PIC, a company may need to get consent again post March 2019.

Classification, labelling and marketing of chemicals

  • The UK will establish an independent regime, aimed at adopting the Global Harmonised System and based on the EU system.
  • The role of the European Chemicals Agency will be replaced by the HSE in the UK.
  • Companies important to the UK from the EU will become importers under the CLP regulation and need to comply with the duties of an importer.
  • Responsibility for UK to EU imports will rest on the EU based importer, meaning they will need to see details of the chemicals being imported from the UK supplier in order to properly register the import.

Consumer protection

  • The no deal notice states that the UK and EU’s consumer protection regime will be different but remain highly aligned.
  • This means the rules surrounding what consumers can expect will remain broadly the same when they buy from an EU Member State.
  • However, where someone seeks redress, they will need to do so through the courts of the relevant member state.
  • The UK is taking steps to ensure that existing Alternative Dispute Resolution mechanisms remain available for those in the UK.
  • However, the online disputes resolution platform will no longer be accessible.
  • When it comes to travel and holidays, the UK is seeking to amend the Package Travel Regulations 2018 so that any EU trader selling package holidays in the UK will have to comply with existing insolvency protection requirements in the UK.

Sanctions

  • The technical notice states that the UK will continue to implement a sanction regime based on the UN sanctions regime.
  • The Government intends to carry over all existing EU sanctions.
  • They Government is also in the process of setting out its own sanction regime for the provision of any future sanctions.

 

The Full list of notices

  • Broadcasting and video on demand if there’s no Brexit deal
  • Data protection if there’s no Brexit deal
  • Mobile roaming if there’s no Brexit deal
  • What telecoms businesses should do if there’s no Brexit deal
  • Getting an exemption from the maritime security notifications if there’s no Brexit deal
  • Reporting CO2 emissions for new cars and vans if there’s no Brexit deal
  • Vehicle type-approval if there’s no Brexit deal
  • Driving in the EU if there’s no Brexit deal
  • Recognition of seafarer certificate of competency if there’s no Brexit deal
  • Accessing public sector contracts if there’s no Brexit deal
  • Funding for UK LIFE projects if there’s not Brexit deal
  • Using and trading in fluorinated gases and ozone depleting substances if there’s no Brexit deal
  • Industrial emissions ‘Best Available Technique’ (BAT) regime if there’s no Brexit deal
  • Upholding environmental standards if there’s no Brexit deal
  • Travelling to the EU with a UK passport
  • Travelling with a European Firearms Pass if there’s no Brexit deal
  • Trading in drug precursors if there’s no Brexit deal
  • Travelling in the Common Travel Area if there’s no Brexit deal
  • Connecting Europe Facility energy funding if there’s no Brexit deal
  • Handling civil legal cases that involve EU countries if there’s no Brexit deal
  • European Regional Development Funding if there’s no Brexit deal
  • European Social Fund (ESF) grants if there’s no Brexit deal
  • Merger review and anti-competitive activity if there’s no Brexit deal
  • Satellites and space programmes if there’s no Brexit deal
  • Trading under the mutual recognition principle if there’s no Brexit deal
  • Appointing nominated persons to your business if there’s no Brexit deal
  • Running an oil or gas business if there’s no Brexit deal
  • Trading goods regulated under the ‘New Approach’ if there’s no Brexit deal
  • Trade marks and designs
  • Patents
  • Copyright
  • Exhaustion of intellectual property rights
  • European Territorial Cooperation funding
  • Generating low-carbon electricity
  • Flights to and from the UK
  • Aviation safety
  • Aviation security
  • Operating bus or coach services abroad
  • Commercial road haulage in the EU
  • Vehicle insurance
  • Registration of veterinary medicines
  • Regulation of veterinary medicines
  • Accessing animal medicine IT systems
  • Exporting animals and animal products
  • Important animals and animal products
  • Regulation chemicals (REACH)
  • Manufacturing and marketing fertilisers
  • Producing and labelling food
  • Importing and exporting plants
  • Taking your pet abroad
  • Buying and selling timber
  • Producing food products protected by a ‘geographical indication’
  • Accounting and Audit functions
  • Structure of your business
  • Geo-blocking
  • Recognition of Qualified Professionals
  • Consumer Rights
  • Trading of gas
  • Trading of electricity
  • Rail Transport
  • Rail Safety
  • Existing Free Trade Agreements
  • Export of objects of cultural interest
  • Pesticides control
  • Control of mercury
  • Control of organic pollutants
  • Taking horses abroad
  • Moving and trading endangers species
  • Breeding animals
  • Continuity of waste shipments
  • Commercial fishing
  • Commercial fishing
  • Plant variety rights and marketing of seeds
  • Regulation of biocidal products
  • Export and import of hazardous chemicals
  • Classifying, labelling and marketing of chemicals
  • Funding overseas territories
  • Sanctions policy
  • Health of meat, fish and dairy products
  • Import of high risk foods
  • Exporting GM food and animal feed

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