SANDS’ Brexit task force can guide you through Brexit
The result of the British General Election makes it likely that Brexit may be done within the currently scheduled exit date of 31 January 2020 and based on the last negotiated withdrawal agreement. The latter foresees a transition period until the end of 2020 in which not much will change. What then follows, from the start of 2021, is highly uncertain. SANDS has set up a Brexit Task Force that will closely monitor all relevant developments and guide your business through Brexit.
Authors: Aksel J. Hageler and Lennart Garnes
By a landslide election victory, the Conservative Party and Boris Johnson have secured a solid majority in the House of Commons. It now seems certain that Brexit will be done in the relatively near future, probably even within the current scheduled exit date of 31 January 2o2o. If so, Brexit will take place based on the currently negotiated UK-EU withdrawal agreement. The latter foresees a transition phase lasting until the end of 2020, in which the UK will be able to continue trading with the EU on existing terms. What comes after that, however, is highly uncertain. During the transition phase, the UK and the EU will seek to negotiate their future trading relationship.
Brexit does not only mean that the UK is leaving the EU. It also means that the UK will leave the European Economic Area (“EEA”) and its governing treaty, the European Economic Agreement (“EEA Agreement”). If the UK leaves the EU based on the currently negotiated withdrawal agreement, Norway and the UK will continue to treat each other as EEA Member States until the end of the above-mentioned transition problem.
However, regardless of the short-term clarity and foreseeability provided by the transition period, the content of the Norway-UK trade relationship from 2021 is still highly uncertain. It is yet to be seen whether it somehow will be substantively linked to any negotiated agreement between the UK and the EU, or whether a trading regime distinct from the UK-EU one will be negotiated. Also, it remains to be seen whether it will be negotiated on a bilateral basis between Norway and the UK, or if the EFTA States will act together. Currently, there are numerous examples of free trade agreements between the EFTA States and third countries.
It appears uncontroversial to predict that the width and depth of any future free trade arrangements will vary from sector-to-sector, depending on the degree of political controversy attached to each field. For example, free trade in industrial goods is likely to be maintained. Also, we assume that there will be a strong common interest in maintaining the free movement of all forms of financial services. In some other fields it may be politically more difficult to continue the same degree of free movement. Thus, the exact content of any future trading scheme is difficult to predict in detail.
Regardless of the exact substantive content of the future regime, it seems certain that individuals’ current enforcement opportunities will be weakened. Today, economic actors can invoke the freedoms of the EEA Agreement before national courts, the EFTA Court and before an independent watchdog handling complaints on identical terms as the European Commission, i.e. the EFTA Surveillance Authority. Such enforcement opportunities are not likely to be maintained under a future UK-Norway trading scheme.
Our considerations above strongly indicate that for businesses involved in the trade of goods, services and cross-border investments between the UK and Norway, the post transition period era is afflicted with great uncertainty and potentially many legal and commercial challenges. To mitigate clients’ Brexit-related risks and challenges, SANDS has set up a Brexit Task Force coordinated by partner Aksel Joachim Hageler and Senior Lawyer Lennart Garnes of SANDS’ EU/EEA and Competition Law Team. The task force includes specialists from all relevant legal fields, e.g. insurance, other financial services and capital movements, as well as tax law, intellectual property and personal data, labour law, shipping, oil and gas, fisheries, seafood and more. SANDS’ Brexit Task Force will continuously monitor all relevant developments and provide tailor-made guidance and advice on all Brexit-related issues faced by your business.
Clearly, this is a much better alternative for businesses in the UK and Norway than a no-deal Brexit would have been. A no-deal Brexit would have made the UK into an EU/EEA third country overnight, meaning that the UK-Norway trade relationship would only be governed by national legislation and, in some fields, WTO regulations, sector-specific bilateral agreements as well as international agreements to which both the UK and Norway are parties, plus some sector-specific “no-deal Brexit schemes” negotiated between the UK and Norway, e.g. concerning customs and free movement of persons.