Brexit: Government guidance for businesses during the transition period

Author: Hannah Thomas, Employment Law Solicitor

The government has issued detailed and useful guidance to businesses on the transition under its Check, Change and Go campaign. This is the main resource for Brexit information as we await further developments in the negotiations between the UK and its EU counterparts on the future relationship.

There are three likely scenarios:

• that an agreement is reached and implemented to take affect from the end of the transition period 31 December 2020
• a no-deal scenario
• a partial deal is reached where some things are agreed but others are not.

Meanwhile, during the transition period, EU law will continue to apply in the UK until 31st December 2020 and from 1 January 2021 much of the existing EU law will be retained in UK law.

Most small businesses will remain largely unaffected when the transition period ends, but there are certain groups of organisations that will have to act now to prepare for the transition, including those involved in the following activities:

• importing or exporting goods
• moving goods to and from Northern Ireland
• transport goods across EU borders
• if you employ anyone from Europe (including Switzerland, Norway, Iceland and Liechtenstein)
• if you rely on intellectual property rights
• transferring data to or from the European Economic Area (EEA)
• if you have a website with a .eu domain
• commercial contracts

What are the key messages for each of the groups mentioned above?

Importing or exporting goods
From 1 January 2021 you will need an Economic Operators Registration and Identification number (EORI) starting with GB if want to continue to move goods between the UK and EEA countries. This unique ID code can be obtained rather quickly, usually within a week and failure to obtain an EORI might mean increased costs and delays. An EORI may not be necessary if you only provide services.

You also have to consider custom declarations and if you need a custom agent.

Moving goods to and from Northern Ireland (NI)
You may not need an EORI if you move goods between NI and Ireland but you will require an EORI number starting with XI from 1 January 2021 if you move goods between NI and non-EU countries, make a declaration in NI or get a customs decision in NI. Take note that you’ll need to apply for an EORI starting with GB before you can apply for one starting with XI. If you already have a GB EORI, HMRC might send you a EORI starting with XI in mid-December.

Transport goods across EU borders
There are several changes affecting hauliers from 1 January 2021. This includes operating licences, permits, trailer and vehicle registration.

If you employ anyone from Europe (including Switzerland, Norway, Iceland and Liechtenstein)
See our article on the EU Settlement Scheme.

If you rely on intellectual property rights
There are a number of new rules that will dictate the position with EU and international intellectual property rights. For example, as things stand, comparable UK trade mark and design rights will be created for every registered EU trade mark or registered Community design at the end of the transition period under the terms of the Withdrawal Agreement. The aim is to create as little as possible administrative work for the right holders.

On 1 January 2021, protected international trade mark registrations designating the EU will no longer be valid in the UK. On this day these rights will be immediately and automatically replaced by UK rights. If you own an existing right, you do not need to do anything at this stage.

After 1 January 2021, you can apply for a European patent through the UK Intellectual Property Office or direct to the European Patent Office (EPO) to protect your patent in more than 30 countries in Europe, using the (non-EU) European Patent Convention (EPC).

As the EPO is not an EU agency, leaving the EU does not affect the current European patent system. Existing European patents covering the UK are also unaffected.

Data protection at the end of the transition period
The Government has already confirmed that the Data Protection Act 2018 which incorporates the General Data Protection Regulation (GDPR) will be retained in UK law after the transition period has ended. If your business has no contacts, transfers or customers in the EEA, you really only need to continue to comply with the UK data protection rules, which includes the GDPR.

If your business receives personal data from contacts in the EEA you may need to have safeguards in place, for example Standard Contractual Clauses (SCC’s) between you and your EU counterparts. There will be no restrictions on transfers from the UK to the EEA.

UK businesses with a presence in the EEA, for example an office, branch or customers, will need to comply with both UK and EU data protection regulations at the end of the transition period. You may also need to designate a representative in the EEA.

If you have a website with a .eu domain
You’ll need to check the criteria as you’ll only be able to register or renew .eu domain names if you are:

• an EU/EEA citizen, independently of where you live
• not an EU/EEA citizen but resident in the EU/EEA
• an organisation, business or undertaking that is established in the EU/EEA.

Commercial contracts
Generally speaking, commercial contracts will be largely unaffected by the question of EU membership. However, there will be situations where it’ll be highly relevant, for example contracts with cross border elements.

In light of this, it’s important to review existing contracts especially focusing on jurisdiction clauses in in the event of disputes, changing tariffs and pricing or if the contract becomes frustrated.

For further advice about how business can prepare for Brexit, please contact Hannah Thomas or call us on 0371 705 4006.