Aycliffe Today Business AT Business Issue 37 | Page 25

The magazine for Aycliffe Business Park | 25
Brexit advice
from the
commercial
law experts
As the clock ticks down to
March 29 2019, the UK and
the EU are stepping up their
preparations for the possibility
of a no-deal Brexit.
Paul Bury, Managing Partner | 01642 610300 www.endeavour.law/brexit
S
o, too, should businesses. If they haven’t
done so already, businesses need to
urgently take steps to identify the possible
risks and opportunities that may arise from
the UK’s departure and put themselves in the
best possible position to mitigate the risks
and take advantage of the opportunities.
After the historic outcome of the Brexit
referendum, an agreement was reached last
year on the broad terms that a transitional
period for businesses was to be put in place,
this is due to end December 2020. During
this period, the UK will continue to comply
with most EU law without any amendments.
However, the need for the European
Council and both the EU and UK parliaments
to approve the final withdrawal agreement
means that the possibility of a no-deal Brexit
in which the UK leaves the EU at the end
of March 2019, with no transition period,
remains a real possibility, which seems to be
increasing day by day.
Brexit assurance audit
Due to this high level of uncertainty it is
vital from a corporate governance and risk
management perspective that businesses
should carry out a Brexit assurance audit in
order to establish what Brexit might mean
for them. This will enable businesses to
identify Brexit-related risks and opportunities
and, where possible, identify possible steps
to mitigate the risks and/or take advantage of
the opportunities.
Paul Bury, the managing partner
at Endeavour Partnership, is advising
businesses across the North East in their
consideration of the following issues.
Ability to continue to operate in key
markets
The biggest concern for businesses trading
in goods and/or services on a cross-border
basis is the possibility they will no longer be
able to operate in the same markets after
Brexit.
In order to maintain cross-border trading,
businesses need to consider a range of
options which may include establishing a
new legal presence and/or obtaining the
authority to continue business in the relevant
jurisdiction. This may involve:
• Carrying out an internal reorganisation
making use of any existing business
footprint;
• Establishing a new legal presence
needed to continue trading in the
relevant jurisdiction; or
• A strategic acquisition of a business
in a foreign jurisdiction that already
possesses the necessary legal
presence and authorisations.
It is important to bear in mind that it
is not just our trade with the EU that will
be affected but also our trade with the
rest of the world which is dependent on
international trading treaties brokered by the
EU which we will no longer be a party to.
Although it is open for the UK to negotiate
a continuation of such arrangements for the
benefit of the UK, as of October 29 2018,
the UK government had only managed to
negotiate a continuation of 14 of the 236
international treaties that the EU has signed
with countries around the world; there is
much work still to be done!
Corporate restructuring
Another option is to consider a corporate
restructure. Although this would give your
business the ability to continue operating
in your current markets, it would involve a
number of consequential issues such as:
• Moving a business from one
regulatory environment to another
will require a new regulatory
approval, which will take time;
• Existing customer contracts probably
will need to be migrated to the new
entity; and
• Third-party supply arrangements may
also need to be migrated.
Contractual consequences
Where a business is renegotiating its
contracts, or entering into a new contract
that will continue in force after Brexit, there
may be an opportunity to introduce ‘Brexit-
proof’ clauses to address future Brexit
uncertainty. These could include:
•
•
•
A price adjustment clause which
permits a supplier to adjust the price
of goods to pass on changes to the
costs of manufacturing the products;
Identify who will be responsible for
the payment of new tariffs between
the UK and the EU; and
A right to terminate (or renegotiate) a
contract after the UK leaves the EU.
Intellectual property
Certain aspects of intellectual property
will by largely unaffected by Brexit. For
example, the system of European patents
under the European Patent Convention is
not an EU creation and will not be affected
by Brexit.
However, in the event of a ‘no-deal’
Brexit, there could be profound implications
for other types of intellectual property,
such as registered trademarks and designs
that cover the whole EU which would no
longer have force in the UK, so will require
separate UK protection.