- Leo Peeters - Alain De Jonge
- brexit , United Kingdom , European Union , free movement of goods, services and people , withdrawal agreement
This is probably something you have asked yourself
as an entrepreneur with economic activities to or from the United Kingdom (UK). On 29 March 2018
the UK will leave the European Union (EU).
At this moment it is still far from clear how this will happen.
The Brexit negotiations have led to a withdrawal agreement but it is not certain that the British Parliament will approve it. And as long as such an agreement has not been signed, a no-deal Brexit is still possible.
In case of a no-deal Brexit, both the duties and formalities of customs will come into force and the free movement of goods, services and people will be halted.
One thing is for sure however! Whatever happens, Brexit will inevitably have great short and long-term consequences for both European civilians living and working in the UK, and for companies with economic activities to and/or from the UK.
1. How Brexit will influence labour law relations
European legislation allows the free movement of workers, giving every citizen of a Member State the right to enter into an employment contract in another Member State of the EU.
The draft of the withdrawal agreement contains the right to work for European employees and their family members living in the UK, for British employees working in the EU, as well as for frontier workers.
However, this withdrawal agreement has not yet been accepted. This means that Brexit might still happen without an agreement, which would mean that the rights to free movement of workers will lapse.
We advise you to prepare for a scenario in which the withdrawal agreement gets accepted as well as one in which it does not get accepted.
2. How Brexit will influence trade contracts with the UK
As mentioned earlier, Brexit will also influence trade contracts your company may have with British actors or non-British actors acting under UK law.
In principle, a contract is binding and all existing contractual rules and conditions should continue to apply after the Brexit.
However, it is advisable to review and, if necessary, revise any contractual obligations.
There are several contract clauses that can help you with this endeavour.
For current contracts, the following details need to be checked:
- The extent to which it is assumed in the contract that:
- the UK is a Member State of the EU;
- the free traffic of goods, services and workers can be correctly executed;
- Are the contracts based on legislation that Belgium/the EU and the UK have in common?
- Are potential future customs charges taken into account in determining the price?
In certain cases it is important to take the possibility of force majeure situations into account, to renegotiate contracts so as to take Brexit into account, or to simply terminate them.
It is an option to adjust the appropriate legislation from the moment the Brexit takes effect for current contracts that are based on UK law, with non-British contractors.
Regarding future contracts, all scenarios of the Brexit should be taken into account.
3. Other things you should be looking out for
- The regional export agencies provide subsidies and assist companies in their export
activities to the UK:
- for companies based in Flanders: Flanders Investment & Trade; https://www.flandersinvestmentandtrade.com/export/
- for companies based in Brussels: Brussel Invest & Export; http://invest-export.brussels/nl_BE/home
- for companies based in Wallonia: Agence Wallonne à l'Exportation & aux Investissements Etrangers. http://www.awex.be/fr
- Exchange rate risks: the British Pound has become a lot more unstable as a result of Brexit
- Costs of customs formalities
- The impact of import duties on your business
- The possibility to pass the additional costs resulting from the Brexit on to your customers
- The standards your products and their packaging must meet in the EU may differ from the British standards. Products that have obtained a certificate or attestation in the EU, may have to undergo further testing in order to also be certified in the UK. This may lead to quite a considerable additional cost.
You can contact our office for assistance and guidance in your dealings with the United Kingdom.