Brexit transition period: what does it mean for design businesses?
After seemingly interminable delays, on 31 January 2020 the UK left the EU and entered an 11-month transition period.
This transition period is due to last until 31 December 2020, unless it is extended by the agreement of both the UK and the EU. During this time, the UK will be treated, predominantly, as if it were an EU member state. The UK will remain subject to EU law whilst a trade deal with the EU is negotiated.
Many aspects of the Withdrawal Agreement that apply to design businesses will not take effect until after the transition period has concluded. To this extent, for the duration of the transition period, it is business as usual.
However, there are a number of areas it is worth highlighting now, in order that if they apply to your business, you are aware and prepared for these potential changes when the time comes.
The UK will continue to operate as part of the EU trade mark system and EU trade marks will continue to extend to the UK. This is until 31 December 2020, unless this period is extended.
After the transition period, it is expected that EU trade marks will no longer protect trade marks in the UK. EU trade marks and EU Registered Community Designs will be converted to comparable UK rights. These rights will be recorded on the trade marks register in the UK and will maintain their original EU trade mark filing date.
It will not be possible to register for a joint UK-EU trade mark after the transition period.
Any UK registered trade marks and UK registered designs will not be affected as a result of Brexit.
CE marking demonstrates that goods are compliant with EU regulations. CE markings must be used for goods which are placed on the EU market.
Initially, the UK proposed a new UK Conformity Assessed (UKCA) marking. The UK intended that this marking would replace the EU’s CE marking on the UK market. The UK has currently postponed the adoption of a UKCA marking scheme, but this has not yet been entirely abandoned. The EU’s CE marking on any applicable goods placed on the UK market will continue for the foreseeable period.
Up-to-date information concerning the potential implementation of the UKCA marking and the current use of the CE marking can be found on the Gov.uk website.
Cross Border Sale and Purchase of Goods
The sale and purchase of goods is widely governed by UK legislation, such as the Sale of Goods Act 1979. The impact on contracts governing the cross border sales and purchase of goods will therefore be minimal during the transition period.
It is anticipated that key changes are likely in the supply of services and sales of goods regulations. For instance, changes can be expected in relation to:
· import and export licences;
· rules governing value added tax; and
· the customs procedure.
Consequently, there is likely to be increased friction in supplies to and from EU countries. This will increase costs, inevitably. The role of shipping agents will become much more relevant.
Businesses will be responsible for ensuring that all cross border contracts for the sale and purchase of goods comply to EU regulations.
Once the new regulatory landscape is clear, the DBA and Humphries Kirk will provide further guidance to members regarding the review of terms and conditions.
Role of the solicitor: As usual if there is uncertainty or controversy then you should consult your solicitor.
Legal advice for DBA members:
Your business can benefit from a free half hour of legal advice on any number of subjects from the DBA’s legal partner Humphries Kirk. If you require help negotiating a commercial contract or have another legal query, please contact James Selby-Bennet at Humphries Kirk. See the DBA member access details here.
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