EU releases notice for stakeholders to prepare for company law changes post-Brexit

The EU has released a Notice to Stakeholders that warns EU company law will no longer apply in the UK after Brexit. The main points it raises are:

  • UK incorporated companies will become third country companies and branches in EU-27 Member States of UK incorporated companies will become branches of third country companies
  • Member States may not be obliged to recognise the legal personality (and the protections that flow from it) of companies which are incorporated in the UK but have their central administration or principal place of business in the EU
  • EU law on disclosure, incorporation, capital maintenance and alteration, and cross-border mergers will no longer apply. However as these are currently enshrined in UK company law, there would be no change on exit unless and until those UK provisions are amended.
  • The UK business register will not be connected to the business registers interconnection system and the way information is obtained will be different.

If you think these company law changes may have consequences for your business, get in touch and we can guide you through these issues.

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New Taxation (Cross-border Trade) Bill introduced in UK Parliament

The UK Government introduced the Taxation (Cross-border Trade) Bill, previously known as the Customs Bill, to Parliament yesterday, in order to provide for the creation of a standalone UK customs regime. Negotiations between the UK and the EU are still focused on withdrawal and have not yet moved onto trade.  However, this new Bill, once passed, will allow the UK Government to charge customs on specified goods and set preferential or additional duties in certain circumstances, e.g. to provide protection against unfair trade or to support developing countries by offering preferential treatment.  The Bill complements the Trade Bill which was introduced to Parliament on 7 November and which will put in place the necessary framework for an independent trade policy for the UK outside the EU.

Read the full news story here.

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UK Government announces new key Bill relating to Withdrawal Agreement

The UK Government has announced that a new Bill will be released which will, once passed, enshrine the Withdrawal Agreement between the UK and the EU into UK law. This new Bill will ensure that the major policy decisions made in the Withdrawal Agreement are scrutinised by parliament before being made UK law. Before this announcement it was unclear as to whether the Withdrawal Agreement would be made into UK law via secondary legislation using the European Union (Withdrawal) Bill 2017-19. The Bill is expected to include major policy issues such as financial settlements, citizens’ rights and the implementation period.

Click here to read the full press release made by the UK Government regarding this new Bill.

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New Trade Bill published

The UK Government has published a new Trade Bill which aims to ensure that the UK has the necessary tools in place to operate its own trade policy once it leaves the EU.  The Bill includes provisions for the UK to implement existing EU trade agreements in order to provide continuity for businesses and consumers, by preserving the non-tariff elements of existing EU trade agreements to which the UK is currently party as an EU Member State.  It also provides for the UK to become an independent member of the Agreement on Government Procurement (GPA) which will continue to give UK businesses access to tenders for government contracts in 47 countries.  A new independent trade remedies body,  the Trade Remedies Authority (TRA), is being created to protect UK businesses from unfair trade practices such as dumping by other countries. The Bill will be complemented by a new Customs Bill, due to be published shortly, which will allow the Government to create a standalone customs regime and amend the VAT and excise regimes.

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Banks, Brexit and what’s next?

The global financial crisis in 2008 and the slump that followed were predicted to change the face of international banking, mark a retreat from globalism and result in much tighter regulation of institutions.

The last is undoubtedly true, particularly in the European Union, as this region still struggles to deal with an overhang of bad debt and ailing banks. Overall, however, the reality is that international financial activity, fuelled by technological advances, trade movements and the flows of capital produced by “quantitative easing” policies of central banks, has continued apace as the US economy has recovered and Asian banks have taken more international positions.

Will this change in the foreseeable future? What are the key drivers and, in particular, how will the UK’s decision to leave the EU – Brexit – affect the sector both in the UK, the rest of Europe and elsewhere?

As the EU’s avalanche of banking regulation continues a pace and the US talks about dismantling parts of Dodd-Frank, we question whether the overall impact will strengthen the EU’s financial centres or result in more banking activity elsewhere.  Continue reading

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The Brexit negotiations – the view from Brussels on developments in October

The Brexit debate often looks different viewed from Brussels rather than from London. It is however important for businesses to also keep in mind the Brussels perspective and therefore we publish a monthly view from our Brussels office on recent developments and the state of the negotiations.

In this second issue of ‘The view from Brussels’, we focus on the outcome of the recent European Council meeting and also take a closer look at the issues relating to the financial settlement, which is currently the main obstacle to progress in the first phase of the negotiations.

Click here to read ‘The view from Brussels – the Brexit negotiations – developments in October’.

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The UK’s relationship with Euratom: What next?

The decision to leave Euratom could, if adequate replacement measures are not put in place in time, have significant negative impacts on a range of sectors, including civil nuclear industry, research and medicine.

Together with Global Counsel we have written a paper which provides an overview of the legal and political background on the UK’s decision to leave Euratom and the UK’s future relationship with it. The paper also identifies some of the potential options for mitigating the impact on the UK and the rest of the EU. Lastly, the paper identifies the six next steps the UK should undertake if it is to minimise disruption from ‘Brexatom’.

View this paper here.

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UK government gives assurances to EU citizens in the UK

The rights of EU citizens currently in the UK were the subject of considerable focus last week, in light of concerns as to whether the Home Office will be able to handle applications from the estimated three million EU citizens currently here and the position if no Brexit deal is agreed.

Citizens’ rights are one of the three areas on which the EU requires sufficient progress to be made before negotiations can encompass Britain’s future relationship with the EU.  The UK is proposing to introduce a new ‘settled status’ in UK law for EU citizens who have been resident in the UK before a specified date (not yet defined but to be no earlier than 29 March 2017 and no later than the date of the UK’s withdrawal).  This status will only be available to those with five years’ residence, but other individuals resident in the UK before the specified date will be able to apply for a temporary residence permit to cover the period until they have accumulated five years.  EU citizens will be able to continue to reside in the UK for a transitional period of two years after the UK’s withdrawal from the EU, and during that period will have to apply for status to remain thereafter.  Further details can be found here.

At the Home Affairs Committee meeting on 17 October, Amber Rudd gave assurances that the Home Office would be prepared and able to handle the registration process.  The plan is for the process of registering for settled status to be largely completed entirely online, with online checks made with the HMRC and DWP with the applicant’s consent.  The process is to be much simpler than the current process for seeking permanent residence, and will be simpler still for those who already have permanent residence.  Ms Rudd stated that the new system should be up and running by the end of 2018 and individuals will be encouraged to apply from that point, so with the transitional period will have more than two years to do so.  The “default position” will be that applications to register for settled status are accepted, unless there are issues of fraud or criminality.

The Committee questioned Ms Rudd repeatedly as to what the position would be if no deal on Brexit is reached.  She stated that she ‘fully expected’ that EU citizens currently in the UK will be able to stay here, that she could not envisage circumstances when they would be asked to leave, even if no deal is reached.  However, she considered it would be a mistake to give a unilateral guarantee of this at this point, given that negotiations with the EU over issues such as family entitlements are still ongoing.  She stated that a White Paper for an Immigration Bill would be available by the end of 2017 and that she hoped there will be more evidence for EU citizens there and, once the new registration process for settled status is in place by the end of 2018, they “will see that confirmed”.   The new Immigration Bill is expected to have its first reading in January 2018.

The Home Affairs Committee is seeking written evidence on the capacity of the Home Office to meet the Brexit challenge by 6 November; views can be submitted here.

On 19 October the Prime Minster published an open letter to EU citizens in the UK here.  The letter states that “I couldn’t be clearer: EU citizens living lawfully in the UK today will be able to stay”.  However, she then goes on to note that there are still “a small number of important points” to finalise in the negotiations.  She states that the two sides are “within touching distance of agreement” and that she is confident that discussions can be concluded in the coming weeks.  The letter does not expressly address the position if there is no deal.  EU citizens hoping for a clear, unilateral guarantee of their rights to remain, whatever the circumstances, may not be reassured.

As to the process for registering for settled status, the letter reiterates that this will be a “streamlined digital process” which costs no more than the cost of a UK passport, with simple criteria.  The Prime Minister confirmed that applicants for settled status will not be required to account for every absence from the UK and will no longer be required to show that they had Comprehensive Sickness Insurance covering their time in the UK (as required for certain individuals under current EU rules). Those who already have permanent residence will have a simple process for swapping this to settled status.

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Implications for South African businesses: Brexit and the Economic Partnership Agreement between the EU and the Southern African Development Community EPA States

Just over a year ago, the European Union (“EU”) signed an Economic Partnership Agreement (“EU-SADC EPA”) with the Southern African Development Community EPA States: Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland (“SADC EPA States”).

Pending ratification by all twenty eight EU Members States, the EU-SADC EPA provisionally entered into force between the EU and the SADC EPA States (excluding Mozambique)i on 10 October 2016. The provisional application of the EU-SADC EPA means that only those provisions that concern areas for which the EU has exclusive competence (such as international trade) apply currently.

1. Key benefits for South African exporters under the EU-SADC EPA

2. Brexit will likely result in the United Kingdom no longer being a party to the EU-SADC EPA

3. Possible solution to maintain preferential market access to the UK

4. South African businesses should take action

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Brexit negotiations key resources – new page on our Brexit blog

A new page has been added to this blog: UK/EU Papers

The page contains the key resources from the UK and the EU relating to the Brexit negotiations, including speeches, white papers, position papers and policy papers, as well as all of our blog posts relating to these materials.

Check out this new page here.

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