Brexit deal rejected: so what now?

• Posted on Jan 16, 2019

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Employees:

EU citizens residing and working in the UK: will need apply to the government’s new EU Settlement Scheme to secure their status after 29 March. No transition period may mean free movement is likely to end on the 29 March 2019 and currently the new immigration rules are not set to be introduced until 1 January 2021.

UK nationals residing and working in the EU: will be subject to the laws of the Member State in which they reside.

Trade:

The UK will no longer benefit from the EU’s free trade agreements with other countries. Trade terms will be replaced by the WTO’s trade rules. Export and import tariffs will be directly affected.

Export and import declarations would be mandatory, and goods would be subject to customs control and tariffs. Members who export and import goods with the EU would need to: (i) register for a UK Economic Operator Registration and Identification (EORI) number; and (ii) be able to make declarations to HMRC.

Intellectual property rights (trade marks & design rights):

Community Trade Marks cease to apply in the UK

• The government intends to grant a new UK equivalent right (no legislation on this yet though).
  Applications for an EU trade mark that are ongoing on 29 March will need to be refiled with the UK IPO within 9 months (no legislation on this yet though).
  Existing EU trade mark registrations or registered community designs will continue to have effect in the remaining EU member states.
• UK applicants will still be able to apply for an EU trade mark registration or a registered community design after Brexit. Use in the UK will no longer count towards use for a CTM.

Unregistered designs (an EU derived right) cease to apply in the UK BUT note that the government intends to: (i) automatically protect any rights existing on 29 March; and (ii) introduce a new ‘supplementary unregistered design right’ for designs that are disclosed post-Brexit.

Exhaustion (ability to trade branded goods already sold in either the UK or EU). EU purchasers wishing to buy goods that have been legitimately placed on the UK market will need the right holder’s consent to export those goods to the EEA. Goods that are imported to the UK which have legitimately been placed on the EEA market are unaffected (if the government introduces the legislation which it has promised).

Product labelling:

Goods sold in the UK:
– Goods that meet EU requirements can continue to be placed on the UK market without any need for reassessment or re-marking – this will be for a time-limited period only.

– Goods to be sold on the UK market that have not completed the conformity assessment prior to Brexit will need to be assessed according to the UK conformity requirements and marked with the UK kite mark.

Goods sold in the EU: Goods will need to be assessed by an authorised EU assessment body and will need a CE kite mark. From 29 March, assessments carried out by UK bodies will no longer be valid and goods will need to be re-assessed by an EU equivalent body and re-marked accordingly.

Data:

GDPR will continue to apply BUT before data is transferred between the EEA and UK a mechanism to protect the data will be needed (e.g. the EU model contract clauses) along with a deeper assessment of the data flow. The ICO is developing an online tool to assist with this, but it has not yet been launched.

Competition regulation:

Competition law in the UK would remain unchanged so no any action is advised to ensure you continue to comply with competition law post-Brexit: if your commercial arrangements comply pre-Brexit then they should continue to comply post-Brexit. This should be the case for, at least, the short to medium term.
The EU block exemptions (such as those that apply to vertical agreements such as distribution and licenses) will continue to apply in the UK, by virtue of provisions of the EU Withdrawal Act, again subject to tidying-up changes. Parties to both existing and new (i.e. post-Brexit) agreements will therefore continue to be able to benefit from these.
UK competition law may start to diverge from EU law over time. Any changes are most likely with regard to issues such as territorial restrictions, which at an EU level have been heavily driven by single market considerations.

Legislation:

All EU law is automatically transcribed into UK law on the day we leave (via the European Union (Withdrawal) Act 2018).
The European Court of Justice has ruled that it would be legal for the UK to unilaterally revoke Article 50 to cancel Brexit (without the need for agreement from the other 27 EU countries).

What next?

The government has 3 days to come up with a plan of action.
If there is a no deal exit the amendment to the recent Finance Bill will kick in and the government will lose its authority to change certain tax rates.

FSPA Members can contact Richard Millington, Partner at Shoosmiths, for a free 30 minutes of advice on Brexit. Richard’s contact details are: +44 (0) 7714 725 058 or [email protected]

The FSPA is following Brexit closely on behalf of its members and are working closely with UK Government Departments on technical papers that could affect our Industry. Contact Jane Montgomery – email: [email protected] if you have any questions now or going forward.