The EU-UK Trade and Cooperation Agreement (TCA) will provide a number of legal challenges and hurdles to Welsh businesses.
We therefore expect, over the course of the next few months, to be advising our clients on a range of legal issues arising out of the TCA.
Import and export of goods – whilst there will be a continued absence of tariffs or quotas on goods imported and exported between the UK and the EU, this will only apply to goods that meet the TCA’s rules of origin. For example, to enable it to be imported on a tariff-free basis, 55% of the materials comprising a motor vehicle must emanate from the UK or the EU. Therefore, businesses that rely on international supply chains will need to consider the rules of origin.
In addition, because the UK has left the EU’s Customs Union, there will now be customs paperwork and checks for goods crossing the UK-EU border, although the UK does have a transitional period until 1 July 2021, with extended deadlines for paperwork to be filed on imports into the UK.
Food imports and exports – although the TCA permits the import and export of food, such goods will be subject to checks and controls at the border.
Product standards regulation – the TCA provides that the UK and the EU will cooperate in relation to the regulation of standards that apply to goods and products. However, going forward, many UK businesses will need to comply with two different regulatory regimes. An exception is medicines, where an annex to the TCA establishes mutual recognition of inspections and good manufacturing practice, thus avoiding the need for two separate regimes.
Services – the TCA contains only limited provisions in relation to services, with some general principles relating to market access. However, there is a long list of wide-ranging reservations. Businesses that provide services will need to check if their service is subject to one of the exceptions; if it is, they will need to consider whether they are subject to particular national restrictions in specific member states.
Professional qualifications – UK nationals, irrespective of where they acquired their qualifications, and EU citizens with qualifications acquired in the UK, will need to have their qualifications recognised in the relevant member state, on the basis of each country's existing individual rules applicable to the qualifications.
Transfer of personal data – the TCA provides for a further 4-month transitional period from 1 January 2021 which permits the continued transfer of personal data from the EU to the UK. In relation to data transfers from the UK to the EU, the UK government has already confirmed their authorisation until 2024.
Other areas of cooperation will include:
- where possible, facilitating customs arrangements
- the recognition and enforcement of registered intellectual property rights
- access to public procurement
- in relation to digital trade or telecoms markets, agreement not to put new restrictions in place
The above is an overview of some key principles arising from the TCA but other specific issues will undoubtedly arise that businesses will need to consider for themselves.
Darwin Gray’s commercial team will be happy to assist with any legal issues going forward.