The Twists and Turns of the Brexit Saga vary from day-to-day as Britain faces the stark choice between an orderly or disorderly Brexit
As of today, there is still no agreement between the UK and the European Union Member States on the question of Brexit, this has been made significantly worse by the disturbing news of an intractable argument between the Prime Minister and Angela Merkel relating to the Irish question which has been widely reported as the “death” of Brexit negotiations with Angela Merkel commenting that it was overwhelmingly unlikely that a Brexit deal can be struck.
The bombshell turn of events is all the more surprising as it is not consistent with the German stance displayed hitherto. The European market, particularly Spain, forms a major part of the British economy and the UK can ill afford to lose Spanish trade. The relentless countdown to Brexit is causing considerable concern, even amongst businesses that have made every attempt to prepare for Brexit. There are steps that can be taken to mitigate the predicted queues at the border and no time should be lost to access the processes and procedures that will make a difference to export/import trade.
The British government has made available to businesses a raft of information on how to mitigate the additional procedures and tariffs that Brexit will impose, including obtaining a European Operators Registration and Identification (EORI) number for both importer and exporter, using third parties to assist with the Customs declaration, which can be an individual or an organisation such as freight forwarders or a Customs agent, as well as navigating through the Transitional Simplified Procedures developed by the HMRC to simplify and streamline Customs checks procedures for a period of one year after Brexit.
Our Lawyers in the Barcelona office, given our global perspective with offices throughout Europe and including London, can provide first-rate assistance to businesses who expect to be affected by Brexit and in particular to those who already have cross-border commercial relations with Spain and the UK, or want to embark on such a venture. Giambrone’s commercial lawyers can provide advice for a range of cross-border issues that have and will arise in relation to Brexit.
The deadline to negotiate an agreement is October 31, a mere few days away, leaves very little thinking time and the alternatives are clear, on one hand, an agreement between the UK and the EU would start a transition period until December 31, 2020, in order to make smoother the exit from the Union. On the other hand, in case of no agreement, there will not be a transition period and the UK would no longer be a Member State starting from November 1, 2019.
From the Spanish point of view, things have not been very clear regarding the consequences of Brexit since the day after the referendum on June 23, 2016. Markets have been unstable, diplomatic tensions have risen between UK and the EU and it seems that also some those who voted for Brexit started to regret their choice, whilst others have become entrenched in achieving Brexit by any means regardless of the damaging consequences. Therefore, the core question for Spain of “How Brexit will affect our economy?” remains impossible to answer as the truth is that despite all the forecasts and predictions, nobody can be sure of what is really going to happen after Brexit simply because nothing quite like this has ever happened before.
Our Lawyers in the Barcelona office, given Giambrone’s global perspective with offices throughout Europe and including London, can provide first-rate assistance to businesses who expect to be affected by Brexit and in particular to those who already have cross-border commercial relations or want to embark on such a venture.
There is a significant difference between selling goods within the EU or to/from a non-EU State. Brexit will make the UK a non-EU State, which means that a whole raft of European law will no longer apply between the UK and the other Member States. Consequently, doing business between UK and Spain will inevitably be more complicated after Brexit in terms of authorizations, licenses, customs and taxes such as VAT. All aspects of cross-border commercial dealings will be affected from 1 November should Brexit go ahead without a stay of execution.
It should be clearly recognised that after After Brexit the process of recognition and enforcement of judgments rendered in the UK will be significantly slower because every Member State will treat those judgments as a decision rendered by a non-EU State, which makes the above-mentioned process slower and also more complicated. Therefore, it is quite clear that a forum selection clause is a vital component to any contract and a poorly drafted clause could have a huge impact in a fast-paced economy such as the one Europe lives in.
The UK is Spain’s fifth biggest trading partner, representing 7% of all Spanish sales abroad and neither country wishes to lose that level of business.
If you would like to know more about the consequences of Brexit, how it will affect trade between Spain and the UK and the steps you can take to make future trading agreements please click here.