With less than 6 months to go until the UK’s departure from the European Union, businesses could be forgiven for hoping that there might be some clarity as to what our arrangements with the EU might look like on 30 March 2019.
However, even at this relatively late stage, the so-called ‘Chequers Plan’ (involving a relatively close relationship with the EU), a ‘Canada-style’ trade deal (involving a much less close relationship) and ‘no deal’ all seem to be still in the running.
A deal of any sort, with the expected transition period until December 2020, should give businesses time to plan how to best position themselves for the new arrangements. However, a ‘no deal’ scenario presents an altogether different challenge, with the ecosystem of rights, rules and regulations all coming to an end overnight.
In preparation for that possibility, Government has identified some of the key areas where a ‘no deal’ Brexit could affect businesses, and has given guidance on how to prepare for that scenario. That guidance covers a range of subjects, from information on trading with the EU and access to the EU’s existing network of free trade agreements, to rather more niche information on, for example, the recognition of seafarer certificates of competency.
In some areas, the guidance contains suggestions of steps that businesses can take to gear up for no-deal. For example, for exporters to the EU, the guidance suggests considering investment in software, or engagement with customs brokers and freight forwarders, to facilitate future export to the EU. In other areas, the guidance is more of a warning of potential impact, rather than a suggestion of positive steps to take.
When reading the guidance (and there is a lot of it to read!) it quickly becomes apparent just how intertwined we have become with the processes and institutions of the EU. The degree of impact of a no-deal Brexit on any particular business will very much depend on the nature of that business, the level of its trade with EU customers and suppliers, and its exposure to EU regulatory frameworks.
So, what should businesses take away from recent Government guidance? First, the potential for immediate and far-reaching consequences of a no-deal scenario is clear. Second, despite the Government’s efforts in the guidance, there are still a lot of unknowns around how some of the consequences of a no-deal scenario might be mitigated by Government and the EU.
But most importantly, this is a scenario which – until such time as a deal is agreed – businesses should be treating just as they would any other risk. They should be assessing their exposure to that risk (in this respect the Government guidance is helpful) and they should be assessing whether it is possible to mitigate those risks, and if it is, when and how they should do so.
Ed Rimmell is a partner at award-winning law firm VWV. Ed can be contacted on 0117 314 5232 or at firstname.lastname@example.org.