UK formally leaves EU - practical matters you ought to be thinking about now

07 February 2020

The UK formally left the EU on 31 January 2020. This is not the end, or the beginning of the end, it is the end of the beginning. The much more important future relationship needs to be determined. There is 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 consider the timing too short. Boris Johnson insists there will be no extension beyond 31 December 2020. There are plenty of commentators providing views such as:

a) A framework agreement will be agreed within this time period covering the big points if not all the detail.

b) There will be an extension.

Few say there will be a no deal scenario, but nobody knows for sure. 

The big issue to be resolved is the extent to which the UK needs to align with EU regulations. The EU is maintaining that to have significant free access to the EU market, the UK must align; the EU is concerned about 'unfair' competition if the UK becomes a 'regulatory light jurisdiction'. Boris Johnson is most reluctant, for now, to concede this.

For UK businesses and international businesses operating in the UK or trading from the UK into the EU are there any practical matters you ought to be thinking about now? A few thoughts are set out below. 

  • Goods: The government is advising that all exporters and importers of goods across EU/UK borders register for an Economic Operators Registration and Identification number (EORI) to help facilitate the movement of goods from the UK to the EU and vice versa. This applies whether or not a deal is struck. If your business imports or exports services, and doesn’t move physical goods across borders, it will not need an EORI.
  • Personnel: Many businesses will have staff members who are EEA or Swiss nationals (the EEA includes EU countries and also 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 applies if a deal is done but why wait and take the risk? 
  • IP: At present IP rights holders in respect of goods placed in the UK market cannot prevent or control how those goods are distributed within the EU i.e. their IP rights are "exhausted" such that they cannot prevent parallel exports to the EU. This could change and accordingly distributors should be wary of contracting now to supply IP rich goods for delivery after 31st December 2020 without checking the position first.
  • Data: Businesses should consider the extent to which their operations are reliant on transfers of personal data and what risks they may be exposed to if there is no complete agreed data solution by 31st December 2020 to allow transfer of personal data between the EEA and the UK to continue, and what steps can be taken to mitigate these risks.

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