Brexit highlights—24 July 2020

Brexit highlights—24 July 2020

These Brexit highlights bring you a summary of the latest Brexit news and legislation updates from across a range of LexisNexis® practice areas, collated on 24 July 2020.

General Brexit headlines

This section contains key overarching Brexit news headlines.

Brexit Bulletin—negotiators target a deal on the future UK-EU relationship by October, but urge preparation for all possible outcomes

In a familiar round of remarks, the UK and EU reported continued deadlock on core issues following the fifth round of talks on the future UK-EU relationship. Once again, both sides reported constructive discussions and positive progress in some areas, but they also highlighted considerable differences on their respective red-lines. Despite this, the talks continue into August 2020, with negotiators on both sides still aiming to reach an agreement. With the Prime Minister’s hopes of a deal in July ruled out, UK chief negotiator David Frost believes an ‘agreement can still be reached in September’. EU chief negotiator Michel Barnier reaffirmed the EU’s ‘willingness’ to reach a deal, but warned that it was ‘unlikely’ at present, due to the UK’s position on competition and fisheries. In light of the continued difficulties and lack of time remaining, both sides acknowledged the possibility of a no-deal outcome, urging preparation for ‘all possible scenarios’ at the end of the transition period on 31 December 2020.

See: LNB News 23/07/2020 118.

Brexit trade deal ‘unlikely’, Barnier says, as UK not moving on State aid, fisheries

The chance of a Brexit deal looks increasingly remote unless the UK clarifies its plans for a post-Brexit State aid regime and budges on its fisheries demands, the EU’s chief negotiator Michel Barnier warned as a fifth round of talks ended in deadlock. UK chief negotiator David Frost agreed there was the possibility of no deal by the end of the transition period, while suggesting there has been some progress on an overarching governance framework for an agreement.

See News Analysis: Brexit trade deal ‘unlikely’, Barnier says, as UK not moving on State aid, fisheries.

Comment—UK supply chains remain at risk under new Brexit border plan

UK importers and exporters will face significant red tape from 1 January 2021 under the border operating system published by the government—and possibly more serious trouble if not everything goes to plan.

See News Analysis: Comment—UK supply chains remain at risk under new Brexit border plan.

The ‘Internal Market’ and the Union

Once the Brexit transition period ends, the UK and devolved governments will no longer be obliged to conform to European Single Market regulations. In their place, the UK government is proposing to legislate for a ‘UK Internal Market’. In his foreword to a recent White Paper, Business Secretary Alok Sharma states that for ‘centuries, the UK’s Internal Market has been the bedrock of our shared prosperity, with people, products, ideas and investment moving seamlessly between our nations’. In this analysis, David Torrance at the House of Commons Library examines that view of the ‘Internal Market’, setting out its historical origins and considering its importance as the UK prepares to leave the EU Single Market.

See News Analysis: The ‘Internal Market’ and the Union.

IfG report finds UK businesses poorly prepared for Brexit

The Institute for Government (IfG) has published a report titled ‘Preparing Brexit: the scale of the task left for UK business and government’, which looks at the preparedness of UK businesses and government for Brexit. In particular, the report finds that due to the coronavirus (COVID-19) pandemic, many businesses are poorly positioned for the end of the transition period. The IfG also set out its recommendations for the government to ensure businesses are better prepared.

See: LNB News 20/07/2020 84.

Brexit legislation updates

This section contains Brexit news headlines relating to Brexit-related primary legislation and legislative preparation for Brexit generally.

Commons Library updates briefing on ​Agriculture Bill

The House of Commons Library has published an updated briefing on the Agriculture Bill 2019–21 as it continues its passage through Parliament. It is currently under consideration in the House of Lords. The Bill received its Second Reading in the House of Lords on 10 June and commenced Committee Stage on 7 July 2020. Consideration continues ahead of the summer recess.

See: LNB News 22/07/2020 26.

Investigating how the UK Withdrawal from the European Union (Continuity) (Scotland) Bill affects environmental law

Philip Hunter, partner at Brodies LLP, discusses the UK Withdrawal from the European Union (Continuity) (Scotland) Bill and details how its provisions differ from those set out in the Environment Bill for England.

See News Analysis: Investigating how the UK Withdrawal from the European Union (Continuity) (Scotland) Bill affects environmental law.

Brexit SIs and sifting updates

This section contains updates on the latest final and draft Brexit SIs laid in Parliament, plus updates on proposed negative Brexit SIs laid for sifting.

Made Brexit SIs laid in Parliament

Plant Breeders’ Rights (Amendment) (EU Exit) Regulations 2020

SI 2020/769: This enactment is made in exercise of legislative powers under the European Union (Withdrawal) Act 2018 (EU(W)A 2018) and the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A 2020) in preparation for IP completion day. This enactment amends two pieces of UK secondary legislation in relation to plant breeders’ rights to give effect to separation provisions regarding Community plant variety rights in Part 3 (Title IV on Intellectual Property) of the Withdrawal Agreement. It comes into force partly on 11 August 2020, and fully on IP completion day.

See: LNB News 21/07/2020 57.

Single Digital Gateway Regulation (Revocation) (EU Exit) Regulations 2020

SI 2020/793: This enactment is made in exercise of legislative powers under the EU(W)A 2018 in preparation for IP completion day. This enactment amends two pieces of retained EU legislation in relation to the Single Digital Gateway in order to address failures of retained EU law to operate effectively and other deficiencies arising from the withdrawal of the UK from the EU. It comes into force on IP completion day.

See: LNB News 23/07/2020 57.

Sudan (Sanctions) (EU Exit) Regulations 2020

SI 2020/753: This enactment is made in exercise of legislative powers under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA 2018) in preparation for IP completion day. This enactment amends one piece of UK secondary legislation and revokes two pieces of UK subordinate legislation and one piece of retained EU legislation in relation to the sanctions regime. It comes into force in accordance with regulations made by the Secretary of State under SAMLA 2018, s 56.

See: LNB News 21/07/2020 20.

Draft Brexit SIs laid for sifting and sifting committee recommendations

Brexit SI Bulletin—latest drafts and sifting committee reports, 24 July 2020

Public Law analysis: The Commons European Statutory Instruments Committee (ESIC) and the Lords Secondary Legislation Scrutiny Committee (SLSC) are responsible for the sifting process under the EU(W)A 2018. These committees scrutinise proposed negative Brexit SIs and make recommendations on the appropriate parliamentary procedure before the instruments are laid in Parliament. This bulletin outlines the latest updates and recommendations, collated on 24 July 2020.

See News Analysis: Brexit SI Bulletin—latest drafts and sifting committee reports, 24 July 2020.

Beyond Brexit

Beyond Brexit—government seeks views on 2025 UK Border Strategy

The government has launched a consultation seeking stakeholder views and expertise to develop its 2025 UK Border Strategy. As part of its post-Brexit border strategy, the government has already published a Border Operating Model setting out plans which will start to be phased in from 1 January 2020, once the transitional arrangements under the Withdrawal Agreement come to an end. Building on those plans, the government has broader ambitions to deliver ‘a world class border’ that is ‘fit for the future’ by 2025 to ensure that the UK becomes an ‘even more attractive place to travel to and do business with’. The strategy will also focus on ensuring the UK is better protected against crime, terrorism, environmental and biosecurity threats. Responses to the consultation should be submitted by 11.55 pm on 28 August 2020.

See: LNB News 22/07/2020 21.

Beyond Brexit—UK publishes plans for future relationship negotiations with EEA EFTA states

The Foreign & Commonwealth Office (FCO) has published a policy paper on the UK’s approach towards future relationship negotiations with European Free Trade Area (EFTA) countries that are in the European Economic Area (EEA)—Iceland, Liechtenstein and Norway. During the withdrawal period, the UK negotiated the EEA EFTA Separation Agreement with the EEA EFTA states. The EEA EFTA Separation Agreement introduced provisions on citizens’ rights and priority separation issues arising from Brexit. The agreement broadly mirrors provisions of the UK-EU Withdrawal Agreement and was implemented in domestic law via the EU(WA)A 2020. However, the UK is hoping to negotiate new arrangements, particularly on trade, by the end of the Brexit transition period. The talks are to be co-ordinated by the FCO, with various departments responsible for relevant aspects of the deal.

See: LNB News 21/07/2020 17.

Beyond Brexit—inquiries into UK-Australia and UK-New Zealand trade negotiations launched

The House of Lords International Agreements Sub-Committee has launched two enquiries into the ongoing UK-Australia and UK-New Zealand trade negotiations. Regarding the UK-Australia trade deal, the inquiry is seeking evidence on issues including how the trade deal will help the UK in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, what provisions should be agreed with Australia regarding tariffs for agricultural goods imports into the UK, and financial services sector opportunities. The UK-New Zealand trade deal inquiry focuses on the reliability of the Department of International Trade’s assessment of the proposed trade deal’s impact, recent disagreements that have emerged from the negotiations, and concessions that New Zealand may be seeking with regard to indicators of geographical origins on food and drink.

See: LNB News 17/07/2020 91.

Beyond Brexit—briefing paper on UK’s trade agreements published

The House of Commons Library has published a reading list of resources on the UK’s negotiations for trade agreements with the US, Australia, New Zealand and Japan, and the approach to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The briefing paper, ‘Trade agreements: a reading list’, collates a selection of statements from the UK Government and the other parties to the negotiations. It also contains material from Select Committees, press articles and other commentary. These negotiations are due to run in parallel to the UK-EU negotiations, as the government tries to establish independent trading relationships to take effect after the end of the transition period.

See: LNB News 21/07/2020 87.

Beyond Brexit—Liam Fox presents case for appointment as WTO DG

Candidates nominated for the post of World Trade Organization (WTO) Director General (DG), including the UK’s nominee, Dr Liam Fox, met with WTO members at a meeting of the General Council in Geneva on 15–17 July 2020 to open their campaign for appointment. Each candidate gave a presentation setting out their vision for the WTO, followed by a Q&A and press conference.

See: LNB News 20/07/2020 74.

Editor’s picks—the practice area/sector view

This section contains key Brexit news hand-picked by Lexis®PSL lawyers from their own practice areas.

Banking and Finance

ESMA urges firms to prepare contingency plans for the end of the transition period

The European Securities and Markets Authority (ESMA) is urging financial market participants to finalise preparations and implement suitable contingency plans in advance of the end of the UK’s transition period on 31 December 2020. ESMA also confirms that previously agreed memoranda of understanding on co-operation and information exchange concluded with the UK’s Financial Conduct Authority (FCA) remain valid and will come into effect at the end of the transition period.

See: LNB News 17/07/2020 96.

ISDA updates Brexit FAQs (version 8)

The International Swaps and Derivatives Association (ISDA) has published version 8 of its Brexit FAQs, which have been updated to assess possible outcomes of the current negotiations in respect of any future EU/UK trading relationship, including a no-deal outcome at the end of the implementation period (IP completion day). The regulatory FAQs have been updated to reflect the position as at 30 June 2020.

See: LNB News 22/07/2020 7.

For further updates from Banking and Finance, see: Banking and Finance weekly highlights—overview.

Construction

CLC writes to BEIS regarding construction industry’s no-deal concerns

The Construction Leadership Council (CLC) co-chair, Andy Mitchell, has written to Secretary of State for Business, Energy and Industrial Strategy (BEIS), Rt Hon Alok Sharma MP, regarding ‘preparations for a possible no deal with the European Union’. The letter outlines that, although striking a deal between the UK and EU by the end of the transition period is ‘the most desirable outcome’ for the construction industry, most ‘responsible businesses’ are seeking to put in place contingency plans in the event of a no-deal scenario on 1 January 2021. The CLC therefore asks the government to take steps to ‘provide as much certainty and guidance for the construction industry as possible’ in three particular areas of concern which include standards and regulations, movement and cost of construction materials and products, and workforce.

See: LNB News 22/07/2020 36.

For further updates from Construction, see: Construction weekly highlights—overview.

Financial Services

Committee seeks clarity from government on future UK-EU relationship in financial services

The House of Lords EU Services Sub-Committee wrote to the City minister and economic secretary to the Treasury, John Glen MP, to seek clarity on topics including UK-EU equivalence decisions, future UK-EU regulatory co-operation and the government’s plans for financial services, particularly the role for Parliament in the future regulatory framework. The letter, dated 20 July 2020, follows a meeting of the sub-committee on 2 July 2020 in which Glen gave evidence on the UK-EU negotiations in financial services and UK financial services after Brexit.

See: LNB News 21/07/2020 39.

FCA confirms MoUs with ESMA and EU regulators

The Financial Conduct Authority (FCA) confirmed that its memoranda of understanding (MoUs) with ESMA and EU securities regulators covering co-operation and exchange of information will come into effect at the end of the transition period, which is set to expire on 31 December 2020.

See: LNB News 17/07/2020 68.

FCA eCommerce Directive webpage describes changes at the end of the Brexit transition period

The FCA published a webpage setting out changes facing UK and EEA firms that currently rely on an exclusion host state regulation for e-commerce activities provided from one EEA state to a person in another EEA state under the Electronic Commerce Directive (ECD). The ECD exclusion is on the basis that the host state regulator can rely on the regulation of the firm’s home state because both are within the same EEA regulatory framework. It can be used to cover activities within a financial services passport, but can also cover activities not covered by passporting. It does not cover effecting or carrying out insurance contracts.

See: LNB News 20/07/2020 79.

HM Treasury consults on UK approach to implementing CRD V

HM Treasury launched a consultation on updating the UK’s prudential regime before the end of the Brexit implementation period. The consultation seeks views on the UK’s approach to transposing the Capital Requirements Directive V (Directive (EU) 2019/878) (CRD V), which amends Directive 2013/36/EU (CRD IV) to update the EU’s regulatory framework for capital and liquidity requirements. CRD V entered into force on 27 June 2019 and must be transposed into national law by 28 December 2020. The consultation closes on 19 August 2020.

See: LNB News 16/07/2020 47.

HM Treasury sets out rationale for amending transition period for third country benchmarks in the UK

HM Treasury published a policy statement setting out its rationale for extending the transitional period for third country benchmarks under the UK Benchmarks Regulation from 31 December 2022 to 31 December 2025. This will allow UK supervised entities to continue using benchmarks provided by administrators located outside the UK in new financial contracts and instruments without these benchmarks being registered with the FCA until end-2025. This prevents the risk of UK firms losing access after end-2022 to important benchmarks provided by non-UK administrators who are unable or unwilling to apply for continued market access through the existing third country regime under the UK Benchmarks Regulation.

See: LNB News 22/07/2020 101.

For further updates from Financial Services, see: Financial Services weekly highlights—overview.

Life Sciences

​​UK withdraws its ratification of the UPC Agreement

 ​The ​​Preparatory Committee of the Unified Patent Court (UPC) has announced that its Council Secretariat has received a deposit of the withdrawal notification of ratification of the Agreement on the UPC by the UK. In a parliamentary written statement in the House of Commons, the Parliamentary Under Secretary of State and Minister for Science, Research and Innovation, Amanda Solloway, mentioned that participating ‘in a court that applies EU law and is bound by the CJEU would be inconsistent with the Government’s aims of becoming an independent self-governing nation’. The UPC Preparatory Committee will discuss the consequences of this withdrawal and issue an announcement later.

See: LNB News 22/07/2020 33.

For further updates from Life Sciences, see: Life Sciences weekly highlights—overview.

Public Law

Welsh Government urges increased engagement on EU negotiations

The Welsh Government has published a document detailing its ‘reflections’ on the government’s response to the House of Lords EU Committee inquiry into ‘UK-EU negotiations on state aid and the Level Playing Field.’ The response explains that the Welsh Government has not been offered an opportunity to engage in detail on potential objectives for a domestic subsidy control regime and EU negotiations, therefore a change is required in the engagement between the government and the devolved administrations. Additionally, the Welsh Government has expressed its concern that the government is developing a future EU subsidies regime without input from the devolved administrations. Regarding the government’s commitment to a mechanism replacing the European Structural Investment Funds, the Welsh Government is concerned that no commitment has been made to retain and support the current ‘Assisted Area system to enable authorities to target their activities at areas of most need’.

See: LNB News 21/07/2020 33.

Brexit Bulletin—Committee presses government for answers and engagement on key transition workstreams

The European Union Committee (EUC) has published correspondence between Parliament and government departments on a variety of Brexit queries. Correspondence includes responses from government on queries raised in previous evidence sessions. Subjects covered include scrutiny of EU legislation during the transition period and the work of the Withdrawal Agreement Joint Committee; financial services equivalence; internal security; implementation of the Northern Ireland Protocol and transparency in negotiations on the future UK-EU relationship. In the correspondence, the EUC seeks further clarity on government plans for updating Parliament and ensuring effective national and devolved parliamentary scrutiny of the key Brexit transition workstreams, particularly the implementation of the Northern Ireland Protocol and associated legislation.

Brexit Bulletin—Committees seek clarity on UK-EU interparliamentary dialogue after transition

The Chairs of the EUC and the Committee on the Future Relationship with the European Union have published joint correspondence to the Chancellor of the Duchy of Lancaster, Michael Gove, and UK Chief Negotiator, David Frost, sharing a copy of a letter sent to the Speaker of the House of Commons and the Lords Speaker on 21 July 2020 regarding inter-parliamentary dialogue between the European and UK Parliaments on UK and EU relations after the transition period.

See: LNB News 22/07/2020 87.

Brexit Bulletin—ESC issues 17th report on EU documents

The European Scrutiny Committee (ESC) has published its 17th report of session 2019–21, focusing on recently drafted EU legislation and policy documents deposited in Parliament by the government. The ESC gauges the legal and political importance of each legislative proposal and, where appropriate, inquires further on its implications and/or recommends it for debate. Reasons identified as legally and/or politically important include implications of the implementation of the Withdrawal Agreement and the Northern Ireland Protocol, relevance to the operation of the future UK-EU relationship, application of the EU’s response to the coronavirus (COVID-19) pandemic, and post-Brexit policy questions concerning victims of crime.

See: LNB News 22/07/2020 86.

Brexit Bulletin—ESC publishes further correspondence with government departments on a variety of Brexit queries

In the latest correspondence published by the ESC, government departments have been asked to provide an update on aspects of the UK position post-Brexit. Issues covered include transfer of Passenger Name Record (PNR) data, participation in the Schengen Information System, implementation of EU Directives on victims’ rights and the European Protection Order, and association to Horizon Europe Programme.

See: LNB News 20/07/2020 88.

For further updates from Public Law, see: Public Law weekly highlights—overview.

LexTalk®Brexit: a Lexis®PSL community

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Useful information

The following recent journal articles are available subject to subscription:

● Leader: Remember Brexit? In this article, Paul Rogerson discusses the mutual recognition of commercial and civil court rulings after the Brexit transition period, a ‘pressing’ issue in the future UK-EU relationship talks. See: Law Society Gazette (2020) LS Gaz, 20 Jul, 2

● Settling down: In this article, León Fernando Del Canto and Leonie Hirst put the tax implications of the EU settlement scheme under the spotlight. See: Taxation, 23 July 2020, 16

Please feel free to contact the Lexis®PSL team with your comments, queries or suggestions: Contact us.

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About the author:
Holly joined LexisNexis in July 2014 and works primarily on the PSL Public Law module. Holly read law at university and qualified as a solicitor in private practice. Before starting her legal career, she gained experience working in local government and spent a year studying politics. Prior to joining LexisNexis, Holly worked in the Global Technology and Sourcing team at BP, supporting a variety of global procurement and compliance projects. Upon joining LexisPSL, she worked in the Commercial and LexisAsk teams before assisting with the development and launch of the PSL Public Law module. Holly looks after a number of core public law subject areas, including Brexit.