8 ways Brexit will affect businesses

The implications of Brexit are far-reaching. Our sector specialists can help you understand how Brexit will affect your organisation.

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Wider marketplace and commercial issues Many businesses are already experiencing changes in the labour market and currency effects. Cost and availability of certain supplies/ goods may change substantially.
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Compliance with future tariff and trade requirements Importers and exporters may need to have measures in place to comply with additional administration and to pay additional tariffs.
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Period of regulatory and legal uncertainty New UK regulations are likely to replace EU law and bring into effect future trade arrangements. Legal uncertainty is likely while these changes bed in up to 2021 and beyond.
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Staff and employment requirements may change EU citizens working in the UK and UK citizens working abroad may face additional requirements for work, residence and travel.
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Supply chain issues Supply chains may be affected by tariff and country of origin requirements. Where goods contain constituents from multiple sources, identification of country of origin rules may change.
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Changes in sources of funding EU funding is likely to cease. Funding (and administrative requirements in relation to it) for certain sectors may change.
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Border issues Businesses dealing with or dependent upon cross-border transit may face additional hurdles.
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Issues around brand names and designs Rights holders will need to apply for separate UK trade mark/ designs as well as EU rights once the UK has exited the EU. The coverage of existing rights will change.

 

Brexit timeline: key dates

  • 23 June 2016
    EU Referendum

    The people of Britain voted for a Brexit from the EU.

  • 29 March 2017
    Article 50 notice

    The formal withdrawal process is initiated by a notification from the UK Government to the European Council.

  • June 2017
    Brexit negotiations start

    The EU commences negotiations with the UK on the terms of the withdrawal agreement.

  • Unknown date
    Future EU trade agreement negotiations start

    The EU is only prepared to discuss a future trade agreement if ‘sufficient progress’ has been made on the withdrawal agreement.

  • Autumn 2018
    Target negotiations date

    In order to allow time for any agreements to be ratified by the other EU member states, the UK will seek to reach agreement on the withdrawal agreement and future trade arrangements.

  • March 2019
    Exit date

    EU treaties cease to apply to the UK from the earlier of (i) the date of entry into force of the withdrawal agreement and (ii) two years from the date of the Article 50 notice (unless two year period extended in accordance with Article 50).

    Any required changes to treaties or international agreements to be ratified by the remaining member states.

  • 2 years from exit
    Period of modification of UK law

    Under current proposals, UK government ministers will have powers to make new law (without approval of parliament) to give effect to the withdrawal agreement and to fill any gaps left by the disapplication of EU law.

Brexit FAQs

When will Brexit happen?

The UK is expected to exit the EU in March 2019. Realistically, any future UK/EU trade agreement must be reached by Autumn/Winter 2018 if it is to come into effect before the UK leaves.

What is being negotiated?

The UK government and the EU are negotiating a withdrawal agreement and (potentially) a future trade agreement. The withdrawal agreement is being negotiated first and the EU has stated it will only engage in negotiations for a future trade agreement once significant progress on the withdrawal agreement has been made.

Key issues in the withdrawal agreement include:

  • the future Ireland/Northern Ireland settlement including border arrangements
  • the future arrangements for EU citizens in the UK and UK citizens in the EU
  • the size of the final financial payment to be made by the UK to the EU.

Brexit without a deal: how will Brexit affect trade?

The terms of exit being negotiated between the UK government and the EU should include whether any transition period will have effect for certain goods/ services or supplies.

Subsequently a trade deal may be negotiated either before exit or in the period after exit.

If no UK/EU trade agreement is reached at exit date, the UK may be able to trade with the EU nations on World Trade Organisation terms. The impact would vary substantially across different sectors. Agricultural and automotive sectors may face particular challenges.

Tariffs for goods imported and exported would increase costs and may cause administrative obstacles to trade.

There may be obstacles to supplying services to EU businesses/individuals including prohibitions in some circumstances.

The movement and employment of individuals may become more difficult.

Some current (non-EU) world trade agreements may fall away. Trading with non-EU countries may change to involve additional tariffs and other obstacles.

The UK may be able to negotiate bespoke trade agreements with certain nations.  It is not formally allowed to begin such negotiations until after exit date.

How will Brexit affect the UK economy?

Brexit is already affecting the UK economy. Withdrawing from the EU will affect businesses and sectors of the economy in different ways.

The UK may cease to be involved in certain EU institutions and schemes (including funding schemes). Funding in certain sectors may need to be obtained from Westminster or devolved administrations (rather than EU).

What are the legal implications of Brexit?

EU law will be disapplied from exit date. Substantial new UK regulation may be introduced to replace it (over a period to 2021 or beyond). Court judgments may be required to clarify the effect of such changes.

The UK government, UK parliament and the devolved administrations face the challenge of disentangling the UK regulatory framework from EU law, while balancing the need to maintain a robust legal and regulatory system.

The disapplication of EU law is being implemented by a Government ‘Withdrawal Bill.’ This has passed its initial stages in the Commons, however includes some contentious provisions relating to the extent of powers being granted to ministers to introduce new law without first obtaining parliamentary approval. It is likely that the terms of the Bill will be heavily debated and may change prior to introduction in the first half of 2018.

The process for restructuring UK law includes the following:

  • Repeal of the ECA. The ECA gives direct effect to all EU law in the UK and provides for the supremacy of EU law where it conflicts with UK law. Repealing this Act separates UK and EU law from a domestic perspective.
  • Transform applicable EU law into UK law. It is likely that this will need to substitute any EU institutions playing a role in the administration of such EU law with competent UK institutions.
  • End the jurisdiction of the European Court of Justice in the UK. Once the court is no longer available as a point of reference for EU law the UK courts will have to decide whether to give any note to decisions it has made in the past or future decisions when considering matters which derive (or derived) from EU law.

How can Burges Salmon help?

The legal and commercial implications of Brexit are potentially very far-reaching. We are issuing sector specific guidance which we will continue to review and develop as more detail becomes available on the approach being taken to withdrawal negotiations by the EU and UK and the impact on the UK economy.

We’ve already prepared briefings in areas as diverse as employment law, intellectual property, food and farming and transport which should help inform the decisions you’re making for your business.

If you would like further information on how Brexit may affect you or your organisation then please get in touch.

Key contact

Chris Seaton

Chris Seaton Senior Partner

  • Senior Partner
  • Employment
  • Partnerships

Food and drink trade after Brexit

Brexit and UK employment law

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