post brexit update

Making Sense of BrexitWhat will it mean to leave the EU?

29 September 2016

Partner, EU, Competition and Regulatory

Ros Kellaway

SHINE Webinar

Eversheds LLP | 03/05/2023 | Eversheds LLP | 03/05/2023 |

Ros Kellaway Partner, Head of Competition, EU and Regulatory

Ros is head of the Eversheds EU Competition and Regulatory Group and has been a partner in our commercial practice since 1989. She has significant knowledge in the financial services, food, insurance, energy and automotive, as she acts for major companies in these industries. She specialises in cartels, competition investigations, distribution and advice on EU law.

Her clients include Volkswagen Group, Dairy Crest, RWE, Karcher, Pentland Brands and The Finance & Leasing Association.

Ros has been recognised for many years as a leading individual in Chambers Guide to the Legal Profession and is currently described in Chambers Europe as an “absolute expert solicitor with a great tenacious style”. She is also consistently recognised in Chambers Global, The World’s Leading Lawyers and Legal 500. She is a member of CBI Competition Law Committee and also the Joint Bar Council and Law Society Working Party on Competition Law.

Ros has researched and spoken extensively on the subject of Brexit to numerous organisations over the last six months including The British Chamber of Commerce in Hong Kong, the Dublin Chamber of Commerce, the Corporate Legal Innovation Conference 2015, and a number of regional Chambers of Commerce.

1. Article 50 – when will Brexit happen?2. EFTA and the EEA3. Five Brexit models4. Difficulties with the WTO model5. Trading with the Rest of the World6. Does the UK have to comply with EU law?7. How could Brexit impact your business?8. How can Eversheds help?

Agenda


• Article 50 sets out the formal mechanism to leave the EU• UK must take a decision to leave the EU “in accordance

with its own constitutional requirements”• Outcome of Referendum advisory to the UK Government -

result does not trigger Article 50 • UK Government must formally trigger Article 50 process

by giving notice to the European Council• Will an Act of Parliament be needed or can the UK

Government use its Royal Prerogative powers?

Article 50 Treaty on the European UnionMechanism for Leaving the EU (1)


•When will Article 50 notice be given?• Not in 2016 – expected early-mid 2017

•When will the UK leave the EU?• Date the withdrawal agreement comes into force; or• Two years after the notification unless unanimously

extended by the European Council and the UK

TimingMechanism for Leaving the EU (2)


• UK/EU negotiate and conclude an agreement setting out the withdrawal arrangements taking account the framework for future relationship together• Two agreements?• Withdrawal agreement – needs to be agreed by European

Parliament and Council• Trade agreement – will need:

• European Parliament approval• Unanimous consent and ratification of all EU Member States

Article 50 Treaty on the European UnionMechanism for Leaving the EU (3)


• Free trade arrangement founded in 1960 by Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the UK• Current members: Iceland, Lichtenstein, Norway and

Switzerland• EFTA has free trade agreements (“FTAs”) with 37 countries

and is negotiating others• EFTA States free to negotiate their own FTAs e.g. Switzerland

with China and Japan• Being a member of EFTA does not give access to the Internal

Market

European Free Trade Area (“EFTA”)


• Founded in 1992 and effective in 1994• Intended to create closer cooperation between EU and

EFTA, pending EFTA States accession to the EU • EU Member States and three EFTA States (Iceland,

Lichtenstein and Norway)• Access to the Internal Market governed by EEA Agreement

– all four freedoms but outside Common Agricultural Policy and Common Fisheries Policy NB includes free movement of people

European Economic Area (“EEA”)

Eversheds LLP | 03/05/2023 |

Free movement of goods

Yes excluding certain

agricultural & fishery products

Varies by product based

on bilateral agreements

Yes YesYes subject

to WTO rules

Free movement of people

YesYes - for

employed persons

No Possible No

Free movement of services / establishment

Yes Yes – industry specific

No Possible No

EU representation

No but veto through EEA

No No No No

EU budget Yes (reduced) Yes (reduced) No No No

Bound by EU/Third Country FTAs

No - can negotiate alone or through EFTA

No - can negotiate alone or

through EFTA

Must apply EU’s common external tariff

to third countries

No No

Five Brexit Models


• Each WTO member has a schedule of commitments setting out trading terms (e.g. tariffs)• Currently no UK specific schedules as UK currently trades

as part of the EU’s schedules• Before trading under the WTO, UK would have to detach

itself from the EU and regularise its position within the WTO before signing its own trade agreements• UK could copy the EU commitments and become a full

WTO member but all 164 WTO members must agree

Difficulties with the WTO model


• On Brexit, UK will lose benefit of EU’s FTAs but will be able to negotiate its own free trade agreements• Already interest from a number of countries – Australia,

Canada, China, Ghana, India, Mexico, New Zealand, South Korea, US• UK can negotiate terms of FTAs but cannot conclude them

before Brexit – exclusive EU competence

Trading with the Rest of the World


• Yes – nothing changes until the UK actually leaves the EU • Existing laws – continue to exist and apply to UK

businesses until the UK leaves the EU• New EU laws – UK required to apply/implement them into

UK law until the UK leaves the EU• Any decision to the contrary would put the UK in breach of

its obligations under international law

Does the UK have to comply with EU law?

How could Brexit impact your business?


• Status of UK citizens working in the EU and vice-versa?• If no free movement of workers, more difficult for

businesses to employ EU citizens to work in UK (and vice-versa)• Work permits?• Many UK employment laws derive from EU law –

considered workplace norms but could change e.g. part-time and fixed term workers’ rights, business transfers

Workforce


• Where Brexit is not dealt with in a contract, what impact will it have?• Could Brexit amount to force majeure or trigger a right to

terminate?• If new tariffs or higher tariffs are imposed, could this give

one party the right to unilaterally change the prices?• Eversheds’ Brexit Risk Analysis and Brexit Proofing Service can identify the potential risks to trading arrangements arising from Brexit and put measures in place to protect against those risks

Contracts


• Depending on the Brexit model, UK may no longer be bound by EU law• UK likely to continue with EU standards in the short-term but

this could change over time• Regulatory divergence could drive up costs on exports from

the UK to the EU (and vice-versa) • UK businesses could lobby the UK Government to continue

complying with EU product standards • Businesses could influence product regulation by lobbying

the EU through EU subsidiaries

Product Regulation


• GDPR automatically bites across the EU on 25 May 2018 – UK likely to still be in the EU• Post-Brexit GDPR as an EU Regulation falls away unless the

UK takes action• Practically need to maintain DP parity with the EU • UK expected to legislate to maintain GDPR• Even if GDPR dropped, UK companies targeting sales

towards EU citizens/monitoring their behaviour will be caught by it

Data Protection – what will happen to the GDPR?


• Brexit will not impact all sectors equally – each business needs to consider what it will mean for them

• Eversheds has a team of experts that can advise you on the potential impact Brexit will have on your business

• We can help you identify the specific risks, challenges and opportunities for your business to manage your exposure and help you prepare a “Brexit ready” plan

• We can help you lobby for Brexit arrangements for your sector• Further information is available on Eversheds’ Brexit webpage -

www.eversheds.com/brexit

How can Eversheds help?

http://www.eversheds.com/brexit

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Ros Kellaway