What a 'no deal' Brexit means for you or your business

Deal or no-deal? The latter is still an unlikely scenario as I explained in this France 24 debate last week.

However, this is the default legal position if the UK government and the other 27 member states fail to agree on a withdrawal agreement by March 29th next year.

If this is the case then there will  no transition period. Consumers, businesses and travellers will have to adjust immediately to the impact of leaving all existing agreements with the  European Union.

The UK would become a ‘third country, meaning that tariffs would be imposed on the movement of goods to and from the EU. 

The British government has been releasing a series of “no deal” papers, known as technical notices, outlining what would happen in such a scenario. 

The Department for Exiting the European Union released another twenty-eight such papers on Thursday.

Here is a summary of what some of the most important notices will mean for businesses and individuals: 

 

Mobile roaming

 

Roaming fees unlikely to return if no deal

 

The EU’s flagship - and arguably most popular - consumer policy could come to an end if there is a no deal Brexit.

“Surcharge-free roaming when you travel to the EU could no longer be guaranteed,” the paper says.

It adds that a financial cap on mobile roaming data would be incorporated into British law of £45 a month.

However the four biggest mobile operators in the UK say they have no plans to bring roaming back after Brexit and many have plans in place for travelers to countries outside the EU which limits costs to as little as £1.50 per day. So it is unlikely that the very high roaming costs of the past will return. 

 

Driving

 

Will UK driving licences be valid?

 

The technical notice in this area says that the mutual recognition of UK driving licence would end with a no deal Brexit.

EU countries currently allow British expatriates to exchange their UK licence for one in the country where they reside.

That would no longer be the case if there is no withdrawal agreement.

The paper also notes that EU countries would insist British drivers pay for an international driving permit before they could legally drive on their roads.

For some European road trips, two permits would be required. Spain, for example, has not ratified the 1968 Vienna Convention on Road Traffic and so British drivers would in theory require a different permit for Spain than the one needed for France. 

However in many EU countries US driving licences are accepted even if in theory they shouldn’t be, so the practical application of this and its impact remains to be seen. 

The UK will not impose any restriction on EU licence holders driving on UK roads. 

 

Passports

 

Have you renewed your passport?

 

Your passport should have at least six months left to run and be no more than nine years old on day of travel to anywhere in the Schengen Zone. This is because a normal entry to the EU will allow for a three month visit with no return for three subsequent months. 

If your passport doesn’t meet these criteria, you could be denied entry to those countries.

This assumes that the EU will not impose a visa regime on UK citizens travelling to the EU post Brexit, but as the UK is proposing visa free travel for EU citizens it is likely that the EU will offer the same scheme. 

 

Goods

If there is no deal, British goods manufacturers would need to have their products retested by EU safety regulators.

The bloc’s ‘New Approach’ regulations would no longer apply to ensure they meet minimum standards. Those products that do are given a CE mark.

There are separate rules for automotive, aerospace, pharmaceutical, medical devices and chemicals.

The UK says it will allow goods carrying the existing CE mark into the country without further testing for a “limited time.”

A new mark of approval would be developed, but regulations could diverge significantly over time, increasing costs for firms on both sides of the channel.

Products that fall under mutual recognition rules would have to meet the individual requirements of every EU country where they are sold in the event of a no deal Brexit.

That will also add more costs on business, which could be passed on to consumers.

 

Data

 

The EU brought in a tougher data protection law earlier this year that hand individuals’ greater control in how data held on them is used.

The UK incorporated most of that law, known as the General Data Protection Regulation, in May. Therefore, its standards are almost fully aligned with those of the EU 27.

That legislation says companies can only transfer personal data outside the EU if there is a legal basis for doing so. 

In a ‘no deal’ scenario, firms across the UK, now a third country, will no longer have unhindered access to data from organisations based in an EU member state.

The government’s technical notice says that is asking the European Commission to agree what is known in EU-speak as an “adequacy decision”.

This is what the Commission grants to non-EU countries when it is satisfied that they provide a level of personal data protection “essentially equivalent” to EU levels.

If no such decision has been made before Brexit day, the government’s technical notice suggests invoking what are called “standard contractual clauses”, the main legal basis that allows for the flow of data beyond the EU.

Enforcing those clauses can be complex, burdensome and costly, which could be problematic for small and medium-sized businesses.

 

The shipping industry

 

The shipping sector could be hit by a no deal

 

Ships from non-EU countries have to provide security information before they can dock in EU posts.

The latest technical notice on the industry indicates British ships will have to provide such information if there is no deal.

That includes crew and passenger lists, the last 10 ports of call and any special safety measures the vessel has taken.

The government also points out that the European Commission would need to approve any seafarer certificates, which set minimum qualification standards for personnel, issued by the UK post-Brexit.

But industry bodies, as such as the British Ports Association, are really focused on whether they would have the time to invest in the digital and physical infrastructure that might be needed if the UK’s trading rules with the EU change so abruptly.

Ninety-five percent of the UK’s trade moves through the country’s ports, according to Maritime UK, an umbrella body for the country’s maritime sector.

 

Environmental standards

 

EU environmental legislation will be incorporated into domestic law, but with power being transferred to UK regulators.

For example, the government says it will take over the supervision of CO2 emissions for vehicles in the event of no withdrawal agreement being signed.

Although the note states would the UK would look to “minimize the additional requirements placed on industry”.

There will be specific targets in Britain, “which will aim to keep pace with EU targets, on the basis of their UK vehicle registrations only.”

So vehicles sold there will no longer count towards EU-wide targets that enter into force in 2020.

Auto industry experts worry that this could discourage EU carmakers from selling electric cars to the UK market that have been a way of hitting those CO2 emission goals.

Breaching EU CO2 rules could cost companies billions of euros in fines.

 

Vehicle type approval

 

Vehicle and parts manufacturers need to show they have complied with safety and environmental standards before they can sell their products across the EU.

This is what is known as ‘type approval’. 

EU members benefit from a system of mutual recognition here.

So British cars carrying safety certificates from the Vehicle Certification Agency can be sold in any of the other 27 member states.

Likewise, a French vehicle with approval from the regulator in France can be sold in the UK.

Certificates issued by regulators before our departure would still be valid in the UK according to the ‘no deal papers’.

The government says it plans to automatically convertexisting EU-issued type approval certificates.

But the EU has made it clear that it will not do the same.

Manufacturers that wanted to sell new models or components into the British market would need to obtain a separate approval certificate from the VCA once the UK has left the EU.

There are many other areas which are not yet touched by the briefing and still need to be clarified, particularly surrounding aviation for example.

However a no deal scenario is still unlikely, and if a deal is struck, all of these notices will not be put into action.