Planning For Brexit
As the news is reporting with increasing frequency the chances of there being a no-deal Brexit are looming increasingly large. Whilst politicians on all sides struggle to reach agreement on the UK’s withdrawal from the EU businesses should be preparing for Brexit as best they can.
A starting point for every business is to carry out a Brexit risk profiling exercise. This is so that the Company can identify what risk Brexit poses for the business and, where possible, steps are taken to mitigate these risks.
Key areas to review are:
1. Continuity of supply
Does the business require any particular market authorisations? Financial services and pharmaceuticals are key risk areas. Licences may be required and current certifications may no longer be recognised.
2. Supply chain issues
Consider the commercial impact of delays and costs that might be incurred if import and export formalities with the EU are imposed similar to those which currently exist for business outside of the EU.
3. Compliance with EU law
EU law will not disappear. Businesses in the UK that trade in Europe will still need to comply with certain directly applicable EU Laws such as GDPR.
Review your current contracts. Look at the definition of Territory – is this defined as the EU? Would contracts be better if migrated to a different group company? Are there any provisions in existing contracts that may be rendered ineffective, uncertain or undesirable because of Brexit? Consider a renegotiation or exit strategy.
5. Registration of intellectual property rights
EU registrations of trademarks and registered community designs will continue to provide protection in relation to the EU member states. Existing European Patents will be unaffected as the EU Patent system is not connected to the EU but exists as a result of an international treaty.
If you hold EU trademarks consider separate UK registrations if these are not already in place.
6. Governing law and jurisdiction clauses
The choice of governing law in contracts is largely expected to be unaffected by Brexit.
During the transition period (March 2019 – December 2020) the current rules on jurisdiction and enforcement of judgments will continue to apply where proceedings are commenced before the end of the transition period. This has been confirmed by a joint statement published in June 2018 by the UK and EU negotiators. The position from 2021 onwards is not yet clear but the UK does intend to accede to the Hague Convention on the Choice of Court Agreements.
Businesses should be reviewing their Brexit risk profile now and considering any changes to processes or contracts that need to be put in place before 29 March 2019. If you would like to discuss issues arising out of Brexit that may affect your business please Talk to Tollers and contact our Commercial Team on 01908 396230.