UK Parliament continues to scrutinise Brexit negotiations.

Dominic Raab MP, Secretary of State for Exiting the European Union, has been called to appear as a witness before Parliament’s ‘European Union Committee’ - responsible for scrutinising the progress of Brexit negotiations.  This will take place on 29 August 2018.

There are 4 topics listed on the agenda:

  • The state of play in the negotiations;

  • The Ireland / Northern Ireland backstop;

  • The proposed new Facilitated Customs Arrangement;

  • Preparations for a no-deal outcome.

We cannot help but put this into the context of the Brexit timeline… to quote the EU in its warning broadcast across government, business and the 500,000 citizens of Europe – “the clock is ticking”.

At the time of this review on the ‘state of play’ in the negotiations, there will be just 212 days left to complete the preparations.  Now that the civil service has had time to scope the task, an estimated 50 new regulations would need to be published every day from now until March 2019.  However, that assumes that they have a clear framework and an agreed set of post-Brexit conditions to work to. 

And Parliament, stressing that the UK is a democracy and laws and regulations cannot be brought into effect without Parliamentary approval, has secured the right to examine and modify regulations before they take on statutory status.  The UK has a long-held principle that laws cannot be laid down by unelected civil servants, no matter how loyal to Crown and Country they may be.  Even the Supreme Court cannot make laws – any injustices that they uncover are referred back to Parliament for the offending law to be modified.

Once the process is complete, government departments, businesses and citizens will have certainty of the requirements in order to prepare for Brexit.  There are two major – potentially catastrophic - issues for UK stakeholders.  Firstly, the timetable – operating procedures, contracts with suppliers and customers, financing arrangements, new applications for licenses and passports, type-approvals, and so forth - the list is not quite endless, but we have identified hundreds of changes for government, business and citizens – take time to plan and implement.  Time that will simply not be available if there is a no-deal scenario - and will be challenging even if the only possible transition period is agreed between the UK and EU (ending 31 December 2020).

We have reported in detail on the impact – and it impacts UK and all across the remaining 27 EU nations – on many aspects.  Last week we looked at just one - medicines - and the European Medicines Agency, which as a result of Brexit, is relocating from London to Amsterdam [see Insight].  This week there is confusion about NHS and whether it should be stockpiling medicines – and operational bodies, the NHS Trusts, pointing to lack of a clear steer and guidance.

Over the last year we have reported on many parallel situations impacting businesses and citizens – from Air Transport to Taxation.  And this matters in keeping daily working life and lifestyle sustainable.

Meanwhile there remain open political issues.  It seems strange that with only 7 months to go, the Northern Ireland border situation is not settled.  A year ago there was talk of an open border - enabled and empowered by a new IT movements reporting system allowing for unfettered movements of people and goods between Northern and Southern Ireland.  Then we reported HMRC’s statement of delay in implementing this new IT system – with little likelihood that it would be ready in time for Brexit.  Let alone time for the businesses to understand and implement their own systems and operational changes called for whenever a totally new set of procedures is introduced.

This is the same IT system that was to underpin the Checkers proposal for a Facilitated Customs Arrangement.  It is of no consolation whatsoever to the British taxpayers who are funding the new HMRC system that the proposal has been ruled out by the EU in any event.

By contrast, the EU is under no such pressure – Brexit is relatively simple.  There are no laws and regulations to change.  They have all been though due process - drafted, discussed and passed into the Treaties, Laws and Regulations of the EU.  Today they apply to 28 nations.  At the moment of Brexit the UK – by invoking Article 50 – simply gets crossed off the list of 28 and becomes a ‘third country’.  Third Countries comprise the whole of the Rest of the World.  There are some exceptions in the form of bi-lateral agreements between specified third-countries and the EU that apply to limited topics.

Without any explicit bi-lateral agreements in place, at the moment of Brexit, all rights are lost as the UK is struck from list of EU states.  The EU legal and regulatory framework remains as it was, totally intact, simply applying to the remaining 27 nations and 440,000 citizens.

Lest there be any doubt, the European Commission has published a set of 68 guidelines spelling out the status of ‘third countries’.  This to allow time for government bodies, businesses and citizens in the remaining 27 countries to make any practical changes needed. 

Just one instance from the hundreds listed:  all commercial shipping has to be inspected and certified every 2 years and may choose any authorised inspection agency in the EU to do this, including UK agencies.  So a Dutch shipowner who may have chosen to have this done in Britain until now will need to switch to a new agency in one of the remaining 27 countries post-Brexit.  For UK shipping, the issue is much more serious – without a bi-lateral agreement in place, recognising and accepting UK inspection and certification standards, there may be issues about entering EU ports if the positions between the parties harden, negotiations break down, and the strict definitions of a ‘third country’ is applied.

We have catalogued the list and can advise on a case-by-case basis as the negotiations unfold.  The no-deal scenario is, at least, now very clear.  For information, these are listed below by regulatory area.

It looks like it could be a long session for Dominic Rabb in House of Commons Committee Room 2 on 29 August.


References

EU GUIDELINES ON IMPACT OF NO-DEAL BREXIT

Communications Networks, Content and Technology:  E-commerce; Network security; Electronic communications; Audio-visual media services; E-signature; Geoblocking; .EU domain names; Copyright.

Employment, Social Affairs and Inclusion: Transnational workers council.

Energy: Euratom; Energy market; Energy origin.

Environment: EU Ecolabel; Waste law; Trade in protected species; Illegal logging and associated trade; Eco-Management and Audit Scheme (EMAS); Ship recycling.

Financial Services and Capital Markets Union:  Statutory audit; Credit rating agencies; Asset management; Post-trade financial services; Financial instruments; Banking services; Insurance; Occupational retirement institutions.

Internal Market, Industry, Entrepreneurship and SMEs:  Type approvals (automotive vehicles); Type approval (vehicles and engines); Trademarks and designs; Industrial products; Public procurement; Supplementary protection certificates; Professional qualifications.

HR:  Industrial security.

Justice and Consumers:  Data protection; Company law; Civil justice.

Maritime Affairs and Fisheries:  Fisheries and aquaculture.

Mobility and Transport:  Consumer protection and passenger rights; Seafarer qualifications; Air transport; Aviation safety; Road transport; Maritime transport; Inland waterways; Aviation and maritime security; Rail transport.

Health and Food Safety:  Medicinal products for human use, veterinary medicinal products; Plant protection products; Biocidal products; EU food law; Animal feed; Genetically-modified organisms; Natural mineral waters; Plant reproductive material; Animal breeding/zootechnics; Movements of live animals; Plant health; Plant variety rights; Slaughterhouse operators; Animal transport; Substances of human origin.

Secretariat-General:  European Citizens' initiatives.

Trade / Taxation and Customs Union:  Customs and indirect taxation; Import and export licences; Intellectual property enforcement by customs; Preferential rules of origin.

ADDITIONAL MATERIALS REGARDING DECENTRALISED AGENCIES

EU decentralised agencies have published information in relation to the UK's withdrawal from the EU - for example the Community Plant Variety Office, the European Chemicals Agency, the European Medicines Agency and the European Union Intellectual Property Office. Furthermore, the three European Supervisory Authorities (the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority) and the Single Supervisory Mechanism have issued opinions and guidance.

 
John ShuttleworthComment