Preparing your business for Brexit: Regulatory changes

Published: Thursday 17 December 2020

For businesses trading in the EU and providing services or selling goods, Brexit will bring regulatory changes to how each of these business elements are conducted. 

Provision of services in the EU

Businesses who are providing services in the EU will need to check the national regulations of the country they are operating in and how best to operate. For those businesses that have professionally qualified staff, these qualifications will need to be officially recognised by the EU customer, to be able to carry on providing these services from 1 January 2021. This applies to each country that services are being provided in, even if it is on a short-term contract or ad-hoc. If a business does not have you’re the professional qualifications of its staff recognised, then it should not continue to provide services until this has been recognised by the country concerned. 

In addition to this, for those businesses who provide consultancy services from the UK to the EU, they may face changes to the regulations which oversee remote service provisions. Some business may have to open an EU presence to continue providing these services or may seek to obtain authorisation requirements. This will be different for each sector and country that businesses are operating in and, therefore, we recommend researching this to ensure these services can continue to be provided. 

Selling your goods in the EU

From 1 January 2021, any business which sells goods in the EU should check which regulations apply to its products and whether that product requires third party approval, particularly to continue selling such products in the EU. 

UK based individuals and legal entities will no longer count as being established in the EU and vice versa. Businesses may need to appoint someone to act on their behalf in either the UK or EU. 

For those businesses that are impacted, labelling on products will need to be updated to reflect the regulatory changes. This might also include any changes to product approvals or new representatives the business has appointed in the EU. 

Intellectual property 

During the transition period the intellectual property system has continued as it has previously, but some businesses will now need to consider whether changes to the framework will impact trade. Businesses who currently export intellectually protected goods from the UK to the EU may need to contact the rights holder to get permission to continue after the transition period. Depending on the outcome of these discussions, such businesses may want to review their business model or supply chain and how it might impact trade. 

One other consideration for companies is that after the transition period finishes, unregistered community design will no longer cover the UK. Unless there is an agreement on disclosure, eligibility will be restricted to the territory which a design was first disclosed, be it in the EU or UK. The risk is that a business might not have IP protection in a market in which it has significant traction. 

Owning, managing, or directing companies 

UK businesses and individuals may face restrictions on their ability to own, manage or direct a company registered in an EEA country. Preparation is required regarding whether there are any additional requirements on the nationality or residency of senior management to understand if they can continue to hold these positions or if there are any limits imposed on the equity that can be held. 

Timber regulation changes  

Many sectors will have more specific regulations that apply to them from 1 January onwards.

Businesses that import or export timber between the UK and EU after the transition period will need to carry out due diligence checks to evidence that timber has been legally harvested. Those that are exporting timber to the EU may need to supply documentation about the legality and source of the timber so that EU customers can meet EU Timber Regulation due diligence rules. As due diligence will vary from business to business, it is recommended that businesses consider the implications of this and how this might impact how they import or export timber and what processes are needed to be implemented. 

The regulatory environment is changing and depending on where a business is providing services or selling products it is likely changes will need to be implemented to ensure they can continue providing these goods or services.

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Scott Lawrence
Scott Lawrence
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Dan Town
Dan Town
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