Commission warns business to prepare for no deal Brexit

Commission warns business prepare no deal Brexit

The European Union issued a 16-page document outlining the preparations that need to be made for Brexit. It includes advice on how countries, companies and individuals should prepare for the prospect of the UK leaving with “no deal” in place.

No matter how well negotiations go and even if there is a deal, it says, there will be significant disruption and everyone should best be prepared for it from midnight (Central European Time) on 30 March 2019.

Most importantly, there has been “no progress” in agreeing a “backstop” solution to avoid the imposition of a hard border between Northern Ireland and the Republic of Ireland. Among other sensitive unresolved issues are the protection of personal data sent to the UK while it was a member state and the role of the European Court of Justice (ECJ) in overseeing the withdrawal agreement.

If there is a deal there will also be a transition period running until 31 December 2020 during which EU rules and regulations will continue to apply in the UK. Former Foreign Secretary Boris Johnson mistakenly and misleadingly tried to suggest last week that the period up to December 2020 could be used to go into extra time in the search for a withdrawal agreement.

The transition period is conditional in reaching an agreement first. Without any deal the transitional/implementation period does not happen and the relationship between the UK and the EU will change abruptly at the end of March next year. There would be no arrangement in place for EU citizens in the UK or UK citizens in the EU.

Controls at borders “could cause significant delays, in road transport, and difficulties for ports” with “long lines of vehicles waiting for customs procedures to be fulfilled”.

The UK would become a third country for trade and regulatory issues “a significant drawback compared to the current level of market integration”.

Last week-end the EU appeared to harden its position – following PM Theresa May’s visit to Northern Ireland which appears to have been solely to placate the DUP during which she said the EU had to “evolve” – and said Article 50 could be extended only in the event of an election or second referendum.

The hard-line, English nationalist Brexiteers in Mrs May’s Tory party led by equity fund manager and MP Jacob Rees Mogg have been pushing for the UK to crash out with no deal or agreement. The Commission document stresses that some things will have to be done whatever the outcome of negotiations such as companies ensuring they have the right authorisations and certificates to access the EU market after Brexit.

Countries like Ireland and the Netherland, it points out, have already started to prepare their businesses for various possible outcomes with on-line assistance and financial grants and notes that “many companies are relocating to the EU27” or expanding their operations there as they retreat from the UK in advance of Brexit.

Last week Mrs May said the British government would be publishing 70 technical notices in August and September to prepare people here for the consequences of a no deal Brexit.

It prompted widespread derision by her critics as they conjured up doomsday scenarios of people being told to hoard canned food and abandon plans for air travel next summer.

Meanwhile the European Commission has already published 68 notices on preparations in specific sectors of the economy, including health and food safety, financial services, customs, transport, and company law setting out legal and technical issues for which governments and companies need to prepare.

It also points out that it is already preparing to relocate or reassign tasks that are currently performed in the UK – such as the Galileo Security Monitoring Centre (part of the EU’s project for satellites in space) and the UK-based EU Reference Laboratories – because it will not be possible “to entrust a third country” with such EU tasks after the withdrawal date.

The European Medicines Agency and the European Banking Authority are already moving from London to Amsterdam and Paris.

The UK’s Brexit department (formally known as the Department for Exiting the European Union) responded by saying: “It is the duty of any responsible government to prepare for every eventuality, including the unlikely scenario that we reach March 2019 without agreeing a deal.

We have already done a lot of work behind the scenes to prepare for this – it is only natural that our European partners would seek to make similar preparations. We are keen to work closely with the EU on preparedness issues.”


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