LEGAL ADVICE BREXIT DESK
Our experts can of course also assist you if you are affected by the consequences of Brexit. We can assist you with questions such as:
Financial law & investment management
Brexit will have a significant impact on the position of financial institutions in the Netherlands. After the transition period, licensed financial institutions established in the Netherlands (such as investment firms, managers, banks and insurers) will no longer be able to use a European passport. The rules on the outsourcing of activities by Dutch financial institutions to service providers established in the United Kingdom will also be affected. It could be necessary to use the “Temporary Permissions Regime” offered by the UK Financial Conduct Authority or to provide services in the UK via another route. Do you have any questions or do you need guidance? Please do not hesitate to contact one of our financial law specialists, they are up-to-date with all developments.
Tax law
One year after the Brexit Transitional Period expired on 1 January 2021, the impact of Brexit is still noticeable for businesses doing business in and from the UK to the EU and vice versa. The impact is mostly noticeable for taxes that are harmonised on European level for instance for value added tax, social security and custom duties. The UK is considered a third country (i.e. non-EU) whereby business in principle have to deal with UK and EU customs regulations when importing or exporting goods. The aforesaid also resulted in that North-Ireland businesses widely redirected their trade routes to Ireland instead to the UK.
Furthermore, the European Directives (e.g. Parent-Subsidiary Directive and the Interest and Royalties Directive) are not applicable anymore that may result in the loss of certain benefits for businesses doing businesses in and from the UK to the EU. Our tax law specialists closely follow the post-Brexit developments and can advise you on European and Dutch tax and customs issues.
Employment law
Your company has a branch in the UK. What does Brexit mean for the people employed in or seconded to the UK? Should these employees be recalled? And what if British employees are employed by your company in the Netherlands or temporarily working for your company on secondment? Do you have to take action?
Employers should prepare for Brexit by identifying the types of employees/independent workers working within their company. Depending on the outcome of the negotiations on a trade agreement between the EU and the UK, Brexit could have significant labor law implications. This includes the free movement of employees, the freedom to provide services, social security rights, employment conditions (relating to seconded employees), pensions, etcetera. Our employment law specialists can assist you with these issues.
Commercial contracts and disputes
A central element of the Trade and Cooperation Agreement (TCA) is that it provides for zero tariffs and zero quotas on all goods traded between the UK and the EU, provided that they comply with the appropriate rules of origin. The TCA rules of origin requirements are intended to prevent that third country suppliers circumvent EU import tariffs and quotas by using the UK to import their commodity in the EU and visa versa. Only goods that originate in the UK or EU will be tariff free and businesses will need to claim preference on declarations, including holding proof that the goods meet the rules of origin.
The TCA, however, does not eliminate the need for customs declarations for EU trade across UK borders nor the requirement to meet EU product standards and labelling requirements. Although the majority of existing EU product standards will initially continue to apply in the UK, changes are necessary to labels and other documentation to reflect that the UK is not a EU member. On 1 January 2021, the UKCA mark was introduced as a replacement for the CE mark for goods sold within Great Britain. To allow businesses time to adjust to the new requirements, they will still be able to use the CE marking until 1 January 2023 in most cases. The CE mark will continue to be required for goods sold in Northern Ireland. It may also be expected that in due time the product standards for some products will start to deviate in the UK from those applied in the EU.
In addition, it is important to consider provisions on dispute resolution. At the end of the transition period on 1 January 2021, the EU Brussels (Recast) Regulation ensuring that parties' contractual choice of jurisdiction is enforced and that judgments from the courts of member states are recognisable and enforceable across the EU ceased to apply in the UK. The UK applied to join the Lugano Convention in April 2020. The Lugano Convention regulates jurisdiction and the enforcement of judgments as between the EU, Switzerland, Norway and Iceland in a similar way to intra-EU rules. However, the European Commission, representing the EU, has since blocked the UK's accession. This means that for the time being commercial parties will have to navigate the requirements of different national regimes. For contracts with the Netherlands, the parties may rely on The Hague Choice of Court Convention 2005, which stipulates that if a court has jurisdiction on the basis of an exclusive choice of court agreement, the judgment given in those proceedings is enforceable in all contracting states.The 1967 Convention between the Netherlands and the UK for the Reciprocal Recognition and Enforcement of Judgments in Civil Matters is no longer in force between the UK and the European part of the Kingdom of the Netherlands On 16 July 2021, the European Commission published a proposal recommending that the EU accede to the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments. This Convention is intended to establish an international framework for the recognition and enforcement of judgments. However, it is anticipated the ratification process will take a considerable amount of time. This means that you will have to consider which forum is competent to resolve disputes. Our legal specialists closely monitor all developments. They can advise and assist you in negotiations and disputes.
IP / IT and GDPR
Patents will not be affected by Brexit, as the UK remains a full party to the European Patent Convention. From 1 January 2021, EU trade marks (EUTM) are no longer protected in the UK. Further to the Withdrawal Agreement Act, on 1 January 2021 the UK Intellectual Property Office created a comparable UK trademark for every registered EUTM. These have the same legal status as if you had applied for and registered it under UK law, keep the original EUTM filing date, keep the original priority or UK seniority dates, and are fully independent UK trade marks that can be challenged, assigned, licensed or renewed separately from the original EUTM. A similar regime applies for EU registered designs.
In terms of privacy, on 28 June 2021the European Commission adopted two adequacy decisions for the UK - one under the General Data Protection Regulation (GDPR) and the other for the Law Enforcement Directive. Personal data can now flow freely from the EU to the UK where under the UK GDPR it benefits from an essentially equivalent level of protection to that guaranteed under EU law. Our IP / IT and AVG specialists can advise and help you with any questions you may have.
Mergers & Acquisitions
Brexit has a major impact on mergers and acquisition processes. What does Brexit mean in concrete terms for current, completed and future transactions? Can a proposed acquisition be canceled? Can the terms of a transaction be adjusted?
Given all the uncertainties surrounding Brexit, companies from the UK and companies from other European member states will want to guarantee their competitive position and the continuity of their activities as much as possible. A possible safeguard could be making strategic acquisitions or entering into joint ventures between parties from the UK and the EU. Will it gradually become more difficult for companies on both sides to find suitable acquisition candidates or partners? Will acquisition or cooperation processes that have been initiated be completed more quickly?
Our specialists of the Mergers & Acquisitions practice group can advise you on the impact of Brexit on your transactions and how you can best deal with this.
