With Anne Tromans – Partner, and Verity Kirby - Legal Director
Thursday 26 November 2020
From 1 January 2021, the Brexit transition period will be over and the UK will no longer be part of the EU.
But what is the potential impact relocation to/from the UK (specifically England and Wales) may have on an individual’s UK tax position, principally inheritance tax in relation to domicile?
This webinar explores:
- Tax planning opportunities prior to relocation
- The associated impact on wills
- Practical considerations through the use of Powers of Attorney
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All the latest views and insights.
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Webinar transcript
(Please note this is auto-generated and un-edited)
0:19
Hello, my name is Anne Tromans, I'm a partner and head of Shakespeare Martineau's wealth group, and let me introduce you to my colleague Verity Kirby a Legal Director with the firm.
0:28
Welcome to today's webinar on the tax implications of arriving, or leaving the UK due to Brexit. Essentially, we will be talking about residency and domiciled in this regard. There will be a question and answer option in your screen, so please use this to ask any questions and we will get back to you at the end of the webinar.
0:45
13, I'll be seeking to talk to you about the impact Brexit may have on UK residents in domicile looking at the potential pitfalls of an activity and the option opportunities may present themselves. We will also be talking about the importance and benefits of Powers of Attorney at this time.
1:03
We hope that this question and answer session will address some of your concerns on this topic, and we encourage you to contact us for any specific help we can provide. So Brexit the new abnormal.
1:15
Let's talk about residency and Thomas all. Thank you for that very kind introduction. So your residential status, and indeed almost all of always been incredibly important in the UK when we talk about income tax. Capital gains tax, or indeed inheritance tax.
1:31
But most recent changes in legislation in 20 13, of arguably, arguably provided much clarity and determination of these, But fortunately, Brexit has only served to replace UK clarity with Brexit uncertainty, whereas Arceo calls it the new abnormal.
1:48
Let us first look at residency. So what do you think will be the impact of Brexit on those planning to leave the EU and take residency in the UK?
1:57
Well, though, she that depends on whether someone is classed as returning to the UK or arriving for the first time, or the first time for more than five complete touches. The statue residents tests, as it's known. You may not be surprised to learn that there is no formal process for applying to be UK resident, and it is effectively determined on a self assessment basis.
2:20
So, if somebody's coming to take up full-time employment in the UK, and they're likely to be working over 365 day period, and, surprisingly, some three hours or more per day qualifies as full-time employment, than they are likely to be automatically considered as a resident, whether or not an arriva or a return, and, they will therefore pay income tax on capital gains tax on their worldwide assets.
2:44
So, what if somebody actually isn't seeking to be employed in the UK? How would this affect their residency?
2:50
Well, many facts are taken into account if they're not intending to be employed in the UK, such as the number of days spent in the UK.
2:58
If you spend more than 193 days in any one tax year, you will be considered resident.
3:03
Also whether there is available accommodation for you to use whilst in the UK and whether or not you have certain other family ties. It's quite clear then that it's important that you seek advice before arriving or departing so that any advantageous tax concessions can be maximized.
3:20
And can you give us some examples of any tax savings?
3:25
Well, it is certainly advantageous for non residents to realize any assets pregnant with gains before arriving in the UK. As they will be tax free at that point.
3:35
Certainly, those returning to the UK, who are holding assets acquired since leaving, and those assets are showing significant gains, should also seek to realize these before returning, but only after they have been out of the UK for more than five full taxes. As such gains will also be exempt from the UK capital gains tax.
3:56
However, please be aware that any non quiet qualifying disposals will get called to the Capital Gains Tax in the UK, in the first tax year of arrival.
4:07
Individuals taking up residence in the UK should also consider the potential to setup trust before arrival, and choosing non resident trustees to administer such a trust, as there can be penal tax consequences on individuals' setting up a trust once UK resident.
4:24
If at such a trustee set up prior to arrival in the UK, as a non UK trust, it will only suffer tax on each UK income, and capital gains tax only on UK London buildings. All other income and gains will be exempt.
4:40
UK Resident Trusts, on the other hand, will be taxed on all costing Kim and all capital gains wherever they arise in the world.
4:49
We've looked at residency but what about the potential impact of Brexit on domicile, domiciled. So, what is domicile? This is a concept which drives the UK inhibitions tax.
5:00
Very simply put, it tends to be the place that you consider is your permanent home as they say where the heart lies you can be resident in one place but domiciled somewhere else.
5:11
So, how do you actually go about determining what your domicile is?
5:15
There are rules in England and Wales Governing domicile which include consideration as to such things as how many years you have lived in the UK. And if you have lived in the UK for 15 or more of the last 20 years, you will be deemed to be domiciled in the UK. Also, whether you were born in the UK, whether you've always lived there, whether you are married there or whether it's some other reason which binds you to the UK.
5:39
I know there's certainly considerably lots of factors when determining domiciled and we've often prepared reports to help people achieve that domicile. But once they've actually determine where that domicile is, what impact does that have on your tax affairs?
5:54
If you consider domiciled in England and Wales, and you may be even if you've lived and worked in the EU for many years and indeed are considered non resident for income tax on capital gains tax, then you will potentially be subject to inheritance tax on your worldwide assets up to a rate of 40%.
6:11
Further, it can take up to four years to shed a UK domicile and requires careful planning. And certainly, she has lived in several countries then, HMRC may argue that you have not acquired a new dom assault and indeed retain your UK domicile of origin. It really is important that you take advice if you're contemplating changing your domicile and certainly we can help.
6:34
I had a client who emigrated to Spain some years ago, and died, 2.5 years after arrival in Spain. Most of our assets when Spain, Jersey, and the Isle of Man with only a small bank account remaining in the UK unfortunately have entire estate attracted inhibitions tax. And this was due to her, not having lived outside the UK for long enough. OK, there's not much you could do about that but she had failed to put in place a Spanish whale. And so this presented further complications in relation to the beneficiaries who she would have intended to benefit and also in relation to tax.
7:09
Same for UK, inheritance tax on if you're deemed to not be domiciled in the UK, but you hold assets here in the UK.
7:18
If you're not domiciled in the UK, then you will potentially only be subject to inheritance tax on UK assets, not those that held elsewhere. But Brexit does create a new uncertainty for those arriving in the UK, owning assets elsewhere, particularly in the EU.
7:35
Whilst inheritance tax, maybe chargeable on worldwide assets because of domicile, there is the added worry of succession planning.
7:42
As there has been little guidance given on the impact leading the UK will have on the evolutionary offsets, I think you just touched upon it a moment ago. But it seems particularly critical, therefore, that everybody keeps they're willing to review if this is something they're considering.
7:58
Agreed Verity you may have a well prepared in EU country, in which you reside! But, you may own assets. You know that in other EU countries, not covered by that, will It really is essential that you look to update your will regularly and particularly leaving the EU to come to the UK.
8:16
Why is that so important?
8:19
Well, many EU countries have what is not have what is known as forced as sheep rules which can dictate where your property passes on death.
8:30
particularly if you have no will covering those assets. This can be detrimental for both inheritance tax purposes and your intended beneficiaries who may deeply, who may be deprived of their inhabitants because of those as she rolls And these actually rules apply in such countries as France and Spain and surprisingly Scotland to just to name a few.
8:50
And I think we've had even more recently, and in various clients we've dealt with on end.
8:55
So, why is it necessary to prepare new will, just because I'm losing, even if my assets remain exactly the same as they were before?
9:06
UK will be prepared to curvier worldwide offsets. This may be preferable to having a number of different wills which may inadvertently cause a conflict. However, the ability for a UK Well, if you're moving to the UK to be recognized and accepted in other EU countries, may be rescinded as a result of Brexit. We just don't know. Currently, there is the option to choose within the EU which country's rules can apply to a will.
9:33
These options may be withdrawn post Brexit, think it's quite clear and important that advice is so as soon as possible, so that the clouds position can be properly evaluated. Is there any Mary Anning having a separate will for each jurisdiction in which somebody holds an asset?
9:51
It may well be appropriate voting to have a separate will. In each country where you own property, we often recommend this. Why would that be the case? What's whatsapp contagious?
10:02
one of the advantages is that it may assist the administration of the state as the will, will be in a familiar format, the language of that jurisdiction, and the consequences of that should avoid unnecessary bureaucracy, potentially reducing death taxes.
10:19
There are double taxation agreements with some countries, including some within the EU.
10:24
It is therefore important that you seek advice from an expert who's familiar with cross border states to help mitigate death taxes, and to ensure the correct evolution of your estate will occur, particularly to the intended beneficiaries who you really want to benefit.
10:43
And then as part of the wider planning clients readily ask us whether a power of attorney, which could be a lasting power of attorney or an enduring power of attorney, for example, can be used in a foreign jurisdiction. In the same context, this question is often reversed querying whether a power of attorney executed in a foreign jurisdiction can actually be used in the UK.
11:05
I mean, this is, of course, so relevant now. Because so many of our clients own assets in foreign jurisdictions and quite frankly, on a weary, Thursday, November, he wouldn't want a lovely sunny, foreign getaway. But obviously, lots of these clients want to retain these assets for the future. Or if they are indeed relocating, they might need to access them at any time.
11:26
And this issue was really addressed, or look to be addressed in the Hague Convention with protection of adults 2000, and primarily this looked at how and power of attorney in another country could be enforced.
11:40
Now, the UK signed up to the convention but sadly they didn't ratify it and actually, only a handful of countries did including France, Germany, Austria and indeed, Scotland.
11:51
So, what is the impact of the Convention on Powers of Attorney Parity?
11:56
So, bringing terms, it means that if I executed a Power of Attorney here with England, it was certificated to say that it was valid. This could well be accepted in another country, for example, if I had assets that I needed to access in Germany, for example.
12:14
What about the impact of, of powers of attorney in those jurisdictions who have not signed up to the convention, then?
12:21
Well, actually, it's quite Kate mentioned that there's obviously a number of other countries that haven't signed up at all to the convention, but a lot have agreed that they are willing to recognize the power of attorney in a foreign jurisdiction, But, I think the important thing to note is that they may still have their own requirements initial God, so, it might mean that they have tough document translated or indeed notarized.
12:44
What about the UK?
12:46
So, in the UK, we have the Mental Capacity Act 2005, which means, or indeed, allows a foreign power of attorney to be recognized. In reality, as we know, there is, however, a great deal of a number of issues in this regard in an institution might still request a declaration from alcohol to protection, that this power of attorney is indeed recognized, so that they know that they are safe to allow this to be used.
13:11
Indeed, I had a case, recently, where, by an individual who had been granted access to deal with an individual's bank, accounts in Ireland, But here, the bank in the UK wouldn't accept that order. So, sadly, it's not as simple as the convention suggests.
13:27
So, what about the position in the UK then?
13:31
So, we've got a few options available to us, but, unfortunately, most, if not, all, of them, will actually require a court application. And, as we know, the court process is often slower than we might hope, and indeed, costly. Type of application that we might need will depend on the type of power that was originally granted in that foreign jurisdiction. So typically it might include the Court formerly recognizing the power of attorney, or indeed issuing a declaration to state that those powers, which the attorneys using, and indeed exercising into that foreign power to earlier lawful in the UK. And we've also got the Court's power to even go so far as to issue a normal, what we would call a Deputy ship order, allowing an individual to deal with those assets here in the UK.
14:15
So I think, whilst the UK have been slow to ratify this convention, Brexit itself might actually see the UK and courage to deal with this issue. Enabling assets to be dealt with more readily and actually easily, as people move between these European countries, and indeed, capacity becomes an even greater issue than before.
14:35
Would seem then Verity that whilst on the face of eight, powers of attorney should be recognized in a number of jurisdictions it is always advisable to take advice in that jurisdiction. For administrative and cost reasons, it may still be advantageous to execute a Power of Attorney in the jurisdiction, where we're trying holds assets. Similarly, as we have discussed earlier, in preparing wills in that particular country, for example, a power of attorney in Spain maybe need to deal with a disease state or sale of the property. We find more and more clients owning assets in these Mediterranean jurisdictions, and if any urge and legal transactions are required, having a power of attorney in place in advance can avoid critical delays. So I think the facts surrounding the impact of Brexit on those leaving the EU in favor of the UK, oppressively quite unclear. But I believe that there's a degree of certainty that can be achieved by preparing appropriate documentation in the relevant jurisdiction.
15:31
Residency and Domus Sua, however under UK law, generally based on the facts, and therefore we strongly recommend that you talk to us at this difficult time, so that we can help you determine the facts and circumstances that are most appropriate to you. We can then look to tailor our expert taxation and succession planning advice to the new abnormal.
15:52
Well, that brings us to the end of this webinar. We hope that you found it useful and relevant. If there is something that you would like further information on, or have a specific query on any other matter, please do let us know, and we'll be happy to help.
16:05
The recording of this webinar will be posted on the Shakespeare Martineau on Demand page on our website, along with the other webinars or leadership talks, that might also be of interest to you.
16:15
Also, just a quick reminder, that we do have a free legal help line giving you direct access to our senior team of experts for free legal guidance. This could be over a 20 minute telephone or video call.
16:27
Details are on the screen if you'd like to book a session.
16:30
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With Mauro Paiano – Partner, and Daniel Goodall - Associate
Thursday 19 November 2020
The UK Government has confirmed that the transition period will not extend past the end of 2020. The changes will affect nearly every business as well as the future IP legal landscape across the UK and EU.
At the end of the transition period, new rules will come into force in connection with the parallel importation of IP protected goods into the UK and the parallel export of IP protected goods to the EEA.
This webinar covers:
- The new parallel imports regime
- The regime’s impact on businesses
- What will happen to ongoing IP proceedings as well as future IP applications
Our thoughts
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Webinar transcript
(Please note this is auto-generated and un-edited)
0:09
Hello, I'm Mauro Paiano, a partner in the IP team, and welcome to the second in our series of webinars, looking at the changes to the protection of intellectual property in the UK, following the end of the transition period.
0:22
Having discussed the status of EU and UK IP rights in our last webinar, we're going to look at some of the difficulties associated with the end of the transition period for rights holders, the effect on existing licenses and assignments, along with some practical suggestions to help limit any adverse impact on businesses.
0:41
We'll also discuss the status of Ongoing IP proceedings, the IP landscape across the UK, and the EU, parallel imports, and customer enforcement, and their impact on businesses.
0:53
So, first of all, to look at some of the practical considerations, I'd like to hand over to my colleague, Dan Goodin.
1:00
OK, so from the first of January 2021, UK attorneys will no longer be able to represent Rights owners in respect of new applications when you proceedings at the Intellectual Property Office or EU IPO.
1:14
So for those who haven't already done so, rights owners should appoint an attorney based in the EEA to represent them on new trademark and community register design applications, and proceedings before the EU IPO.
1:29
For EU IPO proceedings still ongoing at the end of the transition period.
1:33
The withdrawal agreement provides that UK representatives may continue to act on behalf of their clients at all stages of those proceedings.
1:41
For the UK comparable rights discussed in our earlier webinar, the address for service roles won't change for at least three years from, for the 31st of December 2020, So no immediate changes are required to your EU representatives.
1:58
The IPO has the UK.
1:59
A PO is issued a consultation on limiting addresses for service for other UK IP registrations to the UK and Channel Islands from the first of January 2021, so effectively reciprocating the same arrangements for UK rights and we are currently awaiting the outcome of that inquiry.
2:22
So, in terms of pending applications, where you have a pending application for an EU, right, on 31st December, 2020, and you want to benefit from equivalent protection in the UK, make sure that you apply for the UK Comparable right within the nine month grace period.
2:39
And, if you haven't yet applied to register IP, and do you intend to do so before the end of this year, Consider making an application for both the UK and EU, right?
2:49
To get the examination process in the UK, underway early on, Have a faster route to registration, and, therefore enforcement of your rights.
3:01
So inevitably with both an EU right and a UK comparable right, Clients will be faced with additional application and maintenance costs going forward. So we'll need to reflect this in our IP budgets.
3:13
Rights owners also now face the prospect of parallel proceedings, running in both the UK and EU courts and intellectual property offices and malraux we'll discuss this in more detail shortly.
3:27
So let's trademarks where the reputation and trademarks are not only infringed when an identical or similar markers use for identical or similar goods and services. They may also be infringed where a third party takes unfair advantage it off or damages the reputation attached to that trademark.
3:46
So a comparable UK trademark rights will benefit from any reputation acquired by the corresponding EU trademark in the EU, but only until the 31st of December 2020.
3:58
After this date, the comparable UK Monk's continuing reputation will be based only on use in the UK.
4:06
Now, this could potentially be limiting for owners to be trademarks with a strong reputation in the EU, but not in the UK, who later wished to enforce that equivalent, a comparable monks.
4:21
So, onto existing licenses, The UK has put in place provisions meaning the existing licenses of community registered designs and EU registered trademarks.
4:31
Or equivalent international rates designating the EU, would also apply to the equivalent UK Reregistered designs or comparable trademarks.
4:40
With licenses of UK registered trademarks, there are certain advantages to having those licenses register at the UK IPO.
4:48
For example, the license will become effective against innocent third parties acquiring conflicting interest in the mark, and licensees will not be prohibited from claiming certain costs and infringement proceedings relating to the Mark.
5:03
Since there is no equivalent provision or cost recovery for EU trademarks, licensees should consider recording their licenses of the UK comparable rights with the UK IPO within 12 months of the first of January 2021.
5:17
However, this is not obligatory.
5:21
Rights owners should also check their license agreements to ensure that the creation of the UK comparable rights, their name, in itself, will not put them in breach of contract, if applicable. And consider whether an opt out of the UK comparable right, may be appropriate.
5:42
In terms of assignments, it is possible to assign IP that hasn't yet been created, So clients should consider reviewing the territory provided for license agreements and any future assignments of rights.
5:55
Any references to the E A and E, you will need to be considered.
6:01
Also where owners of EU RET rights haven't yet informed the EU IPO of the assignment before the end of the transition period, The UK comparable rate will be registered in the name of the previous owner.
6:14
So, to avoid having to record the assignment at the UK RPO as well, rights owners should notify the EU IPO of any assignment.
6:21
Now, moving on now, two dot EU domain names.
6:26
For those who haven't seen our previous webinar on Brexit and IP rights, it's important to note the provisions on dot EU domain names.
6:34
If you hold a dot in your domain name, and, uh, a UK organization with no establishment in the EU, a UK citizen not resident in any EU member state, or a UK resident who is not an EU citizen, your dot edu domain name will be withdrawn as of the first of January 2021, and you should already have received notification of this.
7:00
So, ensure that you make provisions for the continuity of your websites, whether through alternative domain names or otherwise.
7:09
So in terms of IP proceedings in the UK and EU, one huge advantage of having a single trademark or a registered design covering the whole of the EU is that an injunction preventing the sale off and other acts relating to infringing products will cover every EU member states.
7:29
Fortunately for rights owners, any pan EU injunction is granted before the transition period ends, will continue to apply in the UK.
7:39
Effectively, any future enforcement in the UK will be in respect of the UK comparable right, mask that remains valid and registered.
7:48
Now provided that they are granted prior to the end of the transition period.
7:53
Pan EU injunctions from the UK courts will continue to be enforceable in the remaining EU member states.
8:02
Now during the transition period, the UK IP Courts have still been able to act as EU trademark and community design courts, with jurisdiction over infringement, validity, replication of iie trademarks and community design.
8:18
However, from the first of January 2021, this will no longer be the case.
8:23
Any ongoing new proceedings relating to infringement, validity, or revocation in the UK, will be limited to the UK comparable rates alone.
8:33
To the extent that, parties to existing litigation in the UK, wish to address any of these matters in relation to the equivalent in trademarks or community registered designs, they'll need to consider commencing parallel proceedings in the appropriate EU forum, whether that may be the EU IPO and or the courts of an EU member state.
8:55
Also, make sure that you keep in mind any local limitation periods to avoid your cause of action becoming time barred.
9:05
Now, in terms of ongoing proceedings of the EU IPO, that's from the end of the transition period.
9:10
Any pending or new oppositions or invalidity invalidity requests based solely on one or more UK rights will be dismissed.
9:19
Applicant seeking to challenge you registered rights on relative grounds are therefore need to rely on preexisting rights in the remaining member states.
9:29
Equally, challenges to UK registered rights on relative grounds will no longer be possible based on EU rights. In practice these challenges may proceed based on UK comparable rates.
9:42
Do note, however, that if an EU trademark or registered community design is revokes or invalidated before the end of the transition period.
9:50
The UK courts will recognize this as a revocation or invalidation of the equivalent UK comparable, right, Unless the ground for embedded or revocation did not apply in the UK.
10:05
So, for example, an EU registered trademark, revoked for having become generic by excuse in mainland EU, but not in the UK, would not be sufficient for the replication of the UK comparable trademark.
10:22
So moving forward from the first of January 2020, the UK IP courts will not have jurisdiction to hear any new cases based on EU rights.
10:33
Any remedies granted by an EU court regarding EU rights, will not extend to the UK.
10:39
So, Malraux is now going to talk in a little more detail about the future of legal landscape for IP across the UK and the EU.
10:48
Whilst we're getting nearer to the end of the transition period, the UK and the EU continue to negotiate to try and reach an agreement which will set out the feature relationship and hopefully included free trade agreement.
10:59
The UK at AU's understanding of the future relationship was set out in the Political Declaration, which was a great alongside the withdrawal agreement on 17th October, 2019.
11:09
And, in the context of intellectual property, the main objective for both the UK, the EU, there's to provide for the protection and enforcement of IP rights to stimulate innovation, creativity, and economic activity.
11:23
The political declaration itself didn't provide much detail. I pay, it only focused on the protection of database rights and geographical indications.
11:31
It allowed the UK and the EU to established around regimes for the exhaustion of IP rights.
11:36
And it said that a mechanism should be established, co-operate and exchange information on IP issues of mutual interest.
11:44
Bedsides published proposed legal test, texts in relation to the proposed future relationship concerning IP, and during their negotiations, they focused on the enforcement of IP rights in the digital environment and at the border and on maintaining the current high levels of IP protection.
12:01
Whilst negotiations in respect of non IP related areas may still be ongoing.
12:06
In the main, with one exception, at least the UK India, you have managed to agree how future IP should be dealt with.
12:13
The one exception referred to concerns new geographical indications.
12:17
So whilst it remains the case that anyone holding an existing geographical indication will be able to continue using it in the UK.
12:25
The UK has insisted on establishing its own scheme for processing new applications going forward with the exception Northern Ireland which will continue to use the EU's geographical indication scheme.
12:38
Of course, whilst much of what needs to be a great has been agreed, the changes to a number of IP rights, which will follow the end of the transition period, means that pan-European remedies will no longer be available in the UK.
12:50
IP rights holders who have multi jurisdictional infringement problems and vote in the UK and at least one other EU member state will now have to litigate twice, once in the EU and again, in the UK.
13:04
As well as increasing costs, this may have an impact on the predictability, can perhaps the perceived standard of litigation.
13:10
Since there must be an increasing risk that cases brought in the UK and the EU result in conflicting judgements, especially where there are parallel cases of illiteracy and infringement, running simultaneously, or whether UK's protection of IP starts to diverge from the US.
13:27
Turning now to the power of the import regime and the exhaustion of rights.
13:32
Under the withdrawal agreement, IP rights exhausted either in the EU or in the UK before the end of the transition period will remain exhausted in both territories.
13:42
This means that during the transition period, the importation of IP protected goods into an EU member state from the UK will not have infringed IP rights, provided those goods had already been placed on the market in the UK before the end of the transition period.
13:58
Similarly, the importation of IP protected goods into the UK from an EU member state has also been permitted, provided the goods had already been placed on the market in an EU member state.
14:12
As regards the position concerning the E a F States during the transition period, the government's already agreed with Norway, Iceland and Liechtenstein, than any IP rights which were exhausted, both in the A, F, the State, and the UK before the end of the transition period.
14:28
Would also remain exhausted in the EFTA States as well as the UK.
14:36
First of January 2021, the position concerning exhaustion, will change.
14:41
After the end of the transition period, IP rights in goods placed on the UK market by, with the consent of a rights holder after the transition period may no longer be considered exhausted in the day.
14:55
As a consequence, the parallel importation of IP protected goods into the A from the UK may no longer be lawful.
15:03
Conversely, the parallel importation of IP protected goods into the UK from an AA country will effectively remain the same.
15:13
The IP rights in goods placed on a market by with the consent of the rights holder after the transition period will continue to be exhausted in the UK which will make IPR protected goods freely and portable from the a to the K.
15:30
As a consequence of these changes, unless the UK and the subsequent they agree reciprocal arrangements, it may not be possible for businesses to freely export IP protected goods from the UK to the EEA. without the consent of the IP rights holder.
15:46
Any UK businesses, which export goods, in which may be affected by this change, should check whether the rights clearances will meet, will be necessary oral, tentatively ensure that their customers have security clearance before the goods are imported into the day.
16:01
Those businesses, which on A you IP rights in goods, where, historically, they've been unable to do very much about that goods being parallel export it to the AEA.
16:12
This change will mean that they may not be in a position to place any inputs into the AEA where consent hasn't been provided.
16:21
What we don't know is whether this exhaustion regime will remain the same going forwards.
16:26
Ultimately, it will be for the UK government to decide how liberal and exhaustion regime it wishes to adopt in future years.
16:34
Whilst the government may choose to maintain the status quo, It's also possible that in the future, it may consider it more advantageous to adopt a system of International exhaustion, under which goods from anywhere in the world may be imported into the UK if they've already been lawfully placed on the market elsewhere in the world.
16:51
The adoption of this approach is likely to be popular amongst consumers given the likely impact on prices paid for goods in the UK.
16:58
There's little doubt that that would be strongly resisted by brand diner's so we'll have to see which way the government, guys.
17:06
Finally, I want to look at the changes to customer enforcement.
17:10
Up to now it has been possible to file a single application for action in any EU member state which would require UK customs to search for and detain infringing goods entering the UK.
17:22
This arrangement's been extremely beneficial to brand and is fighting to stop the trade in counterfeit and copycat products throughout the year.
17:30
Going forward, IP owners will need to have separate arrangements in place for the UK and the EU.
17:36
Then the existing arrangements put in place in an EU member state will no longer cover the UK.
17:42
Any arrangements which had previously been put in place through UK customs authorities, which will typically be the case for you, kept akins, will also become invalid after 31st December 2020, both in the UK and in the remaining EU member states.
17:58
Instead, it will be necessary to refile AAU arrangements through an alternative Customs office in an EU member state.
18:05
As a consequence of those changes, subject to one exception, any IP owners that have put EU arrangements in place through the UK customs, should take immediate steps to secure separate UK and EU arrangements, if they can to avoid a gap in cover after 31st December, 2020.
18:23
As for the one exception I mentioned, again, this relates to Northern Ireland, where the existing customs regulation will continue to apply in certain respects, up to the end of the transition period.
18:34
So what are some of the takeaway points from today's webinar? Well, ensure that you're properly represented before the EU intellectual property of this.
18:44
Now the parallel proceedings in the UK and the EU may become necessary for the proper protection and enforcement of your rights.
18:51
Check whether changes to parallel imports will affect you, and arrange for separate Customs arrangements in the UK, and the EU wants the transition period has ended.
19:02
That concludes our series of webinars dealing with the impact of Brexit on IP.
19:07
We hope you found the series helpful.
19:08
And if there's anything you'd like further information on, or if you have a specific query on any matter that you'd like to discuss, please let us know, and we'd be happy to help.
19:17
In the meantime, we've launched a free Helpline, giving, you direct access to a senior team of experts for free legal guidance on your life and business matters. The details are on the screen, if you'd like to book a session.
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With Kim Walker, Partner
Wednesday 18 November 2020
On 1 January next year, a UK version of the GDPR will replace the current general data protection regulation. The UK will become a “third country” for the purposes of cross-border transfers of personal data from the European Economic Area. On top of this, the effectiveness of the safeguards provided by the Standard Contractual Clauses, which have up to now been the way most UK businesses have ensured transfers of personal data to the US and elsewhere were lawful, has recently been cast into doubt by the European Court’s Schrems II decision.
This webinar explores:
- What will change for businesses that need to transfer personal data into or out of the UK or process the personal data of EEA customers, employees and others
- What these changes mean and what practical steps businesses should be taking to ensure personal data can keep flowing lawfully.
Our thoughts
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Webinar transcript
(Please note this is auto-generated and un-edited)
Hello. I'm Kim Walker, partner in the commercial team here at Shakespeare Martineau.
0:17
Welcome today's webinar on Brexit and Data Protection.
0:23
We live in a time of uncertainty about so many things.
0:27
The new normal, as my CEO likes to call it and I doubt preparing for data protection. Data protection strategies has been top of your agenda recently.
0:39
What is certain, however, is that data protection laws will change from the first of January.
0:46
The end of the transition period.
0:48
This is going to affect every business in the UK in some way or other, even those who don't really do much business outside the UK, and there are definitely preparations which need to be made between now and the end of this year.
1:02
So I'm going to explain what the changes will be and the steps businesses can be taking.
1:08
We'll start by looking at the new legislation, how it takes over from the GDPR, as we know it, the possible consequences of having separate, but overlapping UK and EU data protection regimes.
1:22
Then I'm gonna look at what will change, as far as flows of data between the UK, and the EU, and elsewhere, concerned. And what steps businesses need to take to ensure that data flows aren't disrupted from the first of January next year.
1:39
And finally, we'll look at the other steps that you need to take to be ready for transition into transition periods, such as checking.
1:47
I'm changing your contractual terms.
1:51
I should mention that there is a chat function on the webinar, so if you have any questions, please do. Feel free to leave them in the chat, and we'll get back to you later with some answers.
2:03
So, let's start by looking at the new legal framework, what data protection laws would apply from the end of the transition period from the first of January?
2:14
Now, this is going to depend on whether the UK is given what's called an adequacy decision by the EPA.
2:21
By this, I mean that the EU has formerly declared the UK Data Protection Laws adequate to protect the rights abuse of EU citizens.
2:34
Now, the intention was, has always been that the EU would issue an adequacy decision during 2020, That's unfortunately not looking, very unlikely.
2:45
You would have thought that what that's all UK is doing is transposing the GDPR into UK Law, that it would be very straightforward, but the EU has reservations about a number of other things.
3:01
Such as, for example, the UK's mass surveillance rights under its investigatory powers regime.
3:08
Membership with the five Fight Eyes, Intelligence Sharing community, which means that theoretically, EU citizens data could pass, for example, to the US on the fact that the laws of the UK and the EU candidates search after the transition period.
3:28
There's also been a recent decision of the EU Courts.
3:31
Notice that Quadrature Janette.
3:35
Where the CJ founded the national doors at the UK and a number of other EU countries which require bulk data for communications to be made available to the security agencies.
3:48
The contrary to the fundamental rights. So, all those things are currently standing in the way of getting an adequacy decision, and, of course, the politics of tune it out.
4:01
So, I'm going to assume for today's talk that there is no adequacy to this decision if and when there is, then life will become a whole lot simpler, as far as data protection is concerned.
4:15
So, what's going to happen? First of all, from the first of January, the UK will adopt the GDPR as national law, and turn it into what is known as the UK GDPR.
4:28
This will include the parts of the Data Protection Act 20 18, which extend the GDPR to aspects, which aren't covered by the basic GDPR, such as processing for law enforcement purposes in some other public sector processing.
4:44
So the UK, GDPR, the EU GDPR will coexist.
4:51
The withdrawal agreement, Article 71, Treatment as a safety net for a Citizen. This will also provide the data of non UK citizens processed in the UK.
5:06
As at the last day of the transition period, must continue to be processed in the UK in accordance with the EU GDPR, as it stands on that date.
5:15
So, it has at 31st December, so there'll be a kind of frozen version of the EU GDPR, which applies two EU citizens data, the UK's processing at that point.
5:27
The same will apply to the data of EU citizens who are resident in the UK, who benefit from the work withdrawal agreements with cool agreements, citizens rights provisions.
5:41
So the problem, therefore, for UK businesses, which have any operations in the EU, which sell to customers in the EU, or monitor EU citizens activities through their websites, is that they're, potentially subject to three data protection regimes.
6:00
You've got the EU GDPR, which will apply, for example, if you target your customers from the UK, off to the end of the transition period, where, if you were established in the EU, then you have to comply with the EU GDPR, will have the withdrawal agreement version of the EU GDPR.
6:19
That's the sort of Frozen version, is a 31st December, reply to personal data, processed by UK businesses, before the end of the transition period.
6:29
And we'll have, importantly, the new UK, GDPR slightly expanded UK customized version of the GDPR, which will apply going forward for data processed in the UK, or Buddy, you are the international company targeting customers in the UK on TV, UK GPOs, Extraterritoriality provisions.
6:55
So in some ways, this shouldn't make any difference, because, of course, the withdrawal agreement version, two GDPR, UK, GDPR, the EU GDPR should all be very similar when the transition period and so on the first to generate. The rate will be much difference between them.
7:14
In reality, however, over time, it's very possible that the EU GDPR and the UK GDPR search, for example, the withdrawal agreement allows the UK Supreme Court to depart from the retained caseload of the EU up to the transition period.
7:34
The government has given itself powers in the withdrawal agreement to allow other lower UK course to do this.
7:42
So, about to be eventually some divergence there, and, of course, also, the UK courts aren't obliged to follow ECG decisions about the transition period.
7:54
So, the two sets of laws could diverged over time.
8:01
So, ideally, therefore, UK businesses should be arranging the processing of data so that they can, if necessary, distinguish between the various categories of data, in case they need to try to treat them differently in the UK, GPR, and teacher.
8:22
So, this is something that businesses should be thinking about now.
8:26
If you, if you target customers in the EU, when you've got non UK data in your database, can your database be set up to differentiate to tag the different categories of data?
8:36
And so, you should be getting that.
8:40
Of course, an adequacy decision, we'll help simplify things.
8:48
Said that the UK GDPR is adequate and businesses don't have to worry about applying different versions of the EU GDPR in the UK. So, the sooner we get an adequacy decision, the better.
9:04
Another aspect of not having an adequacy decision is the difficulties, or slightly increased difficulties, that will be correlates to cross border data transfers.
9:18
Currently, transfer presentation around the EU can be done free.
9:24
But transfers from the EU to third countries, so-called third countries, can only take place. if appropriate safeguards are put in place.
9:34
These safeguards are there to ensure that the data is properly protected by contract.
9:40
in that local jurisdiction and the EU citizens have suitable rights to redress.
9:46
OK, if that data is processed.
9:51
Of course, from the end of transition period, you can become, just as the country, GDPR Pepsis, so, until there's an adequacy decision, personal data can't be transferred from the UK, from the EU, to the UK, without appropriate safeguards.
10:11
Normally, as I'm sure you know, this will be by the exporting company and the importing company, putting EU standard contractual clauses in place between them.
10:24
Traditionally, this has been straightforward through it. First, get a copy of the clauses. You turn them into a contract.
10:30
You fill in the blanks, and you sign the contract.
10:35
The shrimps to decision in the ECG July, however, has made this a little bit more complicated. And this now requires a bit more thought.
10:46
That decision trends to decision.
10:49
As well as invalidating the privacy shield, which was one of the ways that the countries could for the EU companies, could be could lawfully transfer data to the US.
11:02
The CJ also made it clear in that decision that if you want to rely on the standard contractual clauses, you need to make sure the adequate to protect individuals' data under the laws of the particular country.
11:15
Wait, you're sending that data.
11:17
So, for example, if it's a country like the US, then you need to consider supplementing the clauses to cover off any concerns.
11:28
Remember, you're not allowed to amend the standing standard contractual clauses, but you are allowed to supplement.
11:33
So, you might add a clause, for example, requiring the importer to give you a warranty that it has never been subject to government of any governmental order to disclose data, and it will tell you if it ever is, and allowing you to freeze, any processing or transfers, if that happens.
11:56
So that's, That's the bad news until And unless there's an adequacy decision for the UK, if you or your processes transfer data from the VA to the UK, You need to put the standard contractual clauses, suitably supplemented, in place.
12:13
I should've mentioned when I say, the EAA, Amin, European Economic Area.
12:19
Which means, as you know, I'm sure the EU plus Liechtenstein, Norway, Iceland.
12:28
So, that's the bad news. The good news is that this doesn't apply the other way around. So, if you transfer personal data from the UK to the EA, then you can government has already confirmed that it will treat the EEA is having adequate data protection rules.
12:46
It has, however, made it clear that it's going to keep that under review. And, it can apply, Keep applying pressure on the EU tickets, and you can proceed decision.
12:56
The threat of that UK Effectivity withdrawing its adequacy decision.
13:05
Here's a summary, on-screen of the flows of the potential for you free cross border data flows, post transition. It's recently complicated.
13:17
The other thing I would remind you is that data being accessed via a computer outside the UK counts as a cross border transfer of data. Even if the data is still sitting on the survey, the UK.
13:30
So, think the transfer isn't actually probably the best word to use, because it includes data being accessed from outside jurisdiction.
13:44
So far as the action points are concerned, the things that businesses should be doing now, I think, are reviewing that key.
13:52
International data flows and recording them in that article 30 records of processing.
13:59
Try to prioritize them. In other words, look at your data flows and work out, which the most important in terms of volume. Or other key details tends to.
14:09
Special category data that's flowing, um, and tackle that first, clearly, because that'll be the most important start, putting together some ready to use version of versions of your standard contractual clauses.
14:28
And don't forget, the standard contractual clauses will be needed for intra group transfers from, yay, companies, you know, took a company in the UK.
14:38
We're not just talking about unrelated businesses, think about the kinds of situations because you might have to consider, even if, even if you're a ..., a UK based business. So, for example, have you outsource any services to an EU country? For example, your payroll.
14:57
Your HR, your IT platform services, or whatever.
15:02
Do you use cloud service provider in any country?
15:06
Are you a UK business managing stuff in the EU, or are you an EU organization with stuff in the UK?
15:14
In all these cases, there'll be cross border transfers of data taking place.
15:20
And so, you'll need to ensure that adequate, appropriate safeguards are in place, such as the standard contractual clauses, so that you cover your transfers of, the data back from the E A, to B, K.
15:33
Remember, also, that the only approved, standard contractual clauses, which currently exist offer controllers to processes, or from controllers to another controller, not the other way round.
15:46
So, if, for example, you're a UK.
15:48
Controller sending data to be processed on your behalf by a service provider in Germany, say, than the German process account, as things currently stand, send your data back to the UK from 20 21, because there are no applicable standard contractual clauses.
16:07
That was the case until very recently, however, fortunately, the European Data Protection Board published very recently on the 12th of November.
16:16
In fact, its long awaited drafts of some brand new GDPR versions of the standard contractual clauses, which include, for the first time, close the switch, can be used for processor to controller, process a process of processor transfers.
16:33
So that's good news, that solve, fill the hole in the, in the EU legislation.
16:40
Finally, if these new clauses are adopted by the EU before the 31st of December, then that Autumn off automatically become part of the UK GDPR.
16:52
If not, UK monitored, and later, by regulations, under our Data Protection Act 20 18.
17:00
In the meantime, you should check with your German processor and all your other EU processes, how they plan to comply with EU GDPR after transition, and you should be getting ready to put the new, standard contractual clauses in place soon, as they are.
17:19
The current pay out for consultation until the 10th of December.
17:25
They have been adopted than the previous standard contractual clauses. The ones we're referring to know and love over the last few years will be repealed with a one-year traditional period the contract entered into before the new clauses come into force.
17:40
So you can look forward to major contracting, contract updating exercise, which are all going to need to carry out over the next year or so to put these new standard clauses into our existing processor agreements.
17:56
Some other steps for you to take, as you need to consider, whether you're you're going to appoint, going to need to appoint an EU representative because you're based in the UK, means your name, OK.
18:11
Post transition, based in the EU.
18:17
So if you don't have any establishment of some sort of permanent base in the EU, put your focus and service to individuals in the EU or monitor them.
18:29
Then, obviously, under Article 32, with the GP off the EU GDPR would apply to this processing.
18:38
Because you have a good base that you'll have to appoint any representative in an EU member state where you target customers, your appointment and writing is quite straightforward, natural appropriate to the supervisory authority.
18:53
For example, if there's a data breach, you don't need to appoint a representative, however, if you're processing using the occasional or low risk.
19:04
And it doesn't cover special category data but it's something to bear in mind.
19:12
The other thing to think about is a consequence of the ICA ceasing to be a supervisory authority for GDPR purposes.
19:22
So if you trade in multiple, you countries, you need to work out which EU supervisory authority will be your lead supervisory authority in future.
19:34
Cindy, you said that your faces in the EU at least can benefit for the EU's one stop shop in terms of supervisory authorities under the EU GDPR.
19:48
If however, you don't have a base in the EU, do you do business there?
19:54
Than you probably won't benefit any longer from the one stop shop?
20:00
You'll need to think about what implications this will have.
20:03
For example, if there's a data breach, and it affects the data of individuals in multiple jurisdictions.
20:12
Then you may well need to make commercial applications to the ICA as well as to every one of those EU supervisory authorities where customer data has been affected, And obviously, this could be serious exercise you need to show in the data breach notification processes are up to date, updated, to take this into account.
20:36
So that you don't find yourself with 72 hours to work out what you're supposed to be doing if a data breach, obviously the first of January.
20:45
Another thing to do is to review your privacy notice, Thomas bound to need updating So that it works with the new regime following transition.
20:58
So we need to adjust what it says about international data transfers.
21:03
Probably many cases still includes references to the Privacy Shield, which will need to get rid of putting the right wording about standard contractual clauses and how you use them.
21:15
It refers to transfers outside the EEA, Killarney exchange, because now, what's important? Transfers out of the UK?
21:25
Certainly, privacy notice to cover that.
21:31
You'll obviously need to refer to the correct version of the GDPR and use the correct terminology.
21:37
You'll need to identify your E representatives if you're required to have one.
21:42
And if you, again, if you have establishment in the EU, you probably need to list the relevant supervisory authorities that apply.
21:54
The same with your contracts, You will need to look at the data terminology, if necessary, say, references, for example, to union law, EU references to the GDPR.
22:07
You'll need to update that to refer to the correct version of the GDPR. Probably, the UK GDPR.
22:15
And if you're contracts talk about requiring consent for transfers outside the EEA, you again, you'll need to change them to references to transfer as entity.
22:28
So, go through your contracts, look at the data processing, and data protection clauses.
22:32
Yeah.
22:35
Decide whether any changes need to make.
22:39
And one final thing, if you have staff who are responsible for data protection, buprenorphine each update, that training center, they understand how the new regime works.
22:53
So, to sum up that until the UK received an adequacy decision from the EU, then the legal landscape is going to be potentially confusing.
23:06
Potentially diverging data protection laws.
23:09
So be prepared to avoid confusion.
23:14
Make sure you have your appropriate safeguards in place, your standard contractual clauses.
23:21
I'm ready so that, well, the first of January to find cross border data flows are disrupted.
23:28
Um, decide whether you need to appointing a year representative.
23:34
If you need one with members of an organization called Privacy Rules and Networkers.
23:41
Privacy lawyers across the EU, my technology companies crusty, so if you need what we can help you find one.
23:48
And, of course, thanks again to update you privacy Notice of Contracts documentation.
23:58
So, that brings us to the end of this webinar. I hope you found it useful and relevant.
24:04
If there's something you would like further information on it.
24:06
Or if you go to a specific inquiry about anything else, please do that.
24:12
Of course, be very happy to help.
24:14
There'll be a recording of this webinar on on demand page, on our website.
24:22
Webinars, leadership talks, I've been trust, And also, a reminder that we do have our free Legal Help line, which gives you direct access to senior team of experts, who offer free legal guidance for a 20 minute telephone, or video call.
24:44
As you can see, the details are on the screen, So please, we took a session now if you'd like.
24:50
And finally, a short survey will appear on your screen videos, to be very pleased if you give us your feedback because this helps us improve events in the future.
25:01
Thank you very much for joining.
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With Mauro Paiano – Partner, and Daniel Goodall - Associate
Thursday 5 November 2020
Brexit will bring about a series of changes and challenges for the protection of intellectual property (IP). When the transition period ends on 31 December this year, the laws will change and businesses will need to revisit their IP rights. There is also great uncertainty as to what extent the UK may – or may not - diverge with EU law moving forward.
Companies and owners of intellectual property rights should act now to ensure they protect their IP assets prior to the transition period ending 31 December.
This webinar cover:
- Brexit impact on existing registered EU intellectual property
- Creation of comparable UK rights
- Immediate steps to take to protect your IP rights
- Impact on unregistered rights such as copyright and unregistered designs
Our thoughts
All the latest views and insights.
SHMA® ON DEMAND
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Gareth Hegarty, Partner
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16 May
Nick Jones, Partner - Employment | Cecily Donoghue, Senior Associate - Employment
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Webinar transcript
(Please note this is auto-generated and un-edited)
0:28
Ah, hello. I'm Mauro Paiano, one of the partners and in the Intellectual property team here at Shakespeare Martineau and welcome to today's Webinar, which is the first of a series looking at how Brexit will affect various issues relating to IP.
0:53
To give a flavor of what we'll be discussing I've highlighted on the slide the areas which we'll be looking at today.
0:59
Now whilst the UK Lefty on the 31st January 2020 the UK has remained within the EU's legal framework during a transition period that expires at 11 0 AM on 31st December this year.
1:12
So over the past year or so, from an IP perspective, at least, it's effectively been business as usual, whilst the transition period counts down.
1:20
But as we quickly approached the end of the transition period, what will that mean for existing IP rights?
1:27
Well you needn't worry that come the first of January 2021 Everything has got to change.
1:33
The UK's intellectual property laws and the extent of protection which is provided to right turners, will largely be changed.
1:40
That's because many rights and national rights.
1:43
some European rights for example, European patents are not affected in any event and a lot of existing UKIP law has been harmonized.
1:51
It adopts many of the EU's IP laws already and will be retained after the end of the transition period.
1:57
Having said that there are changes which will affect owners of AAU trademarks and community design rights both registered and unregistered.
2:06
AAU trademarks have been available since April 19 96.
2:09
Rich, the community design since 2003 and community enriched the designs since 2002.
2:16
They've helped to harmonize IP frameworks across the EU to give businesses predictable and efficient protection for their innovation, and to a large extent, they've proved to be very popular.
2:27
In each case they offer a unitary rights giving protection within all current and future EU member states.
2:34
Of course, whilst a number of EU member states have joined, since the rights were first made available, no member state has left the system. So Brexit has required some fundamental changes.
2:44
And to discuss how the landscape concerning trademarks and designs will be changing.
2:48
I'll hand over to my colleague, Dan Goodall.
2:51
There's an associate in our IP team.
2:54
Thank you, Mark.
2:56
And so, from, from first of January 2000 to 21, And once the transition period has ended, registered EU trademarks and community design rights will continue to give protection in the remaining EU member States, but they will no longer provide protection in the UK.
3:13
Existing UK national trademarks and register designs will be unaffected.
3:17
However, holders of EU trademarks, community registered designs, and community plant variety rights, which have been registered or granted before first of January 2021, will become the holders of a comparable UK right, without re-examination or payment of a fee.
3:35
The UK IPA will place on the UK trademarks Register, new UK registrations for each EU trademark that was on the register the previous day.
3:45
The Brexit trademark regulation's call this new type of rights, a comparable trademark EU, adopting the language used in the withdrawal agreement.
3:55
So, these comparable rates will have the same renewal dates, and it'll take the same firing, or priority, dates, that's, the corresponding EU, writes from, which they will derive.
4:05
And, this means that a comparable mark will have the same status and effect as a trademark registered under the UK trademarks.
4:14
A comparable EU mark will be entirely independent and separate from the EU trademark from which it arrives.
4:22
There will be no need to apply for the comparable MOX.
4:25
The ... will not issue any registration certificates for comparable marks and in the case of comparable marks derived from E trademarks. Registration number will be the last eight digits of the EU market from which they were derived with the added prefix UK series. There are nine, so it will be easy to identify.
4:44
Now, there is an opt out option for owners of existing EU trademark registrations, and to opt out owners have to serve notice on the UK trademarks Registrar at any time, whether, during or after the transition period that they wish to opt out of owning the corresponding comparable mark.
5:02
The opt out will not be available if and the comparable UK rate has been used in the UK.
5:09
It's been assigned or licensed, or an agreement relating to it has been entered into, or if it's the subject of litigation.
5:17
If a request for an opt out is accepted, it'll be deemed to have taken effect from the date of the transition period.
5:23
And the registrar will have a duty to remove that comparable mark from the register.
5:28
So why might owners wish to opt out?
5:31
And, well, one example might be, if any trademark owner has only use the EU mark outside of the UK, and they're absolutely certain that they're not going to use it in the UK and future, or at least not in the first five years.
5:46
And they may wish to avoid the prospect of featured renewal costs, because no renewal costs will be increased with, with two separate rights. And they may not want to become engaged in any challenge to its validity in the UK, when the mark is of no importance to them.
6:03
Another important thing to check is whether the creation of the UK comparable right will actually put holders of EU marks in breach of license arrangements.
6:16
And if this is the case, then the owner might want to consider opting out.
6:21
And this is something that we'll cover in our next talk.
6:27
So on to renewing trademarks once a comparable UK trademark has been created, there will be separate renewal fees for each comparable UK mark and the existing trademark from which it was derived, cable to the UK IPO and the EU eichler, respectively.
6:42
So there will be some additional costs for trademark owners going forwards. In terms of renewable letters, the UK IPO will remind trademark UK trademark owners six months in advance of their trademark expiring.
6:58
But it's going to be possible for them to give six months advance warning and where a comparable mark is due to expire less than six months from the first of January 2021. So what the UK IPOs are going to do is right to hold as soon as reasonably practicable and give the owner six months from the date of the notice to renew their comparable mark.
7:20
So an important practical step would be to make sure that your representative contact details, the EU IPO are up to date before the end of this year.
7:32
Where the comparable right is not renewed, there'll be removed from the register, but may be restored at a later date in accordance with existing UK law.
7:42
Birney, you trademark renewal date falls after the first of January 2021.
7:47
An early renewal payment to the EU IPO will not be enough to avoid having to pay the renewal fee to the UK IPO as well. So watch out for them.
7:58
So where an EU trademark has expired in the six months, leading up to the first of January, 2021.
8:06
And they remain on the register.
8:10
I didn't but it's expired.
8:12
And they may still be rescued in the six months from expiry.
8:16
In which case, the comparable mark will also be treated as expired unless and until the owner of the EU trademark want to use it.
8:25
So if the EU trademark is resurrected by late renewal, the UK IPO would also resurrect or renew the registration of the corresponding comparable mark with no additional fee to be paid.
8:37
But conversely, if an international trademark is renewed late, the owner will have to notify the UK IPO within nine months of the end of the transition period.
8:48
Where no renewals are made in these circumstances, the comparable mark will be removed from the eukaryote register.
8:57
So, finally, on trademarks, pending applications where, where an EU trademark application or an international application designating, the EU is still pending and the taste at the end of the transition period. So it hasn't actually proceeded to registration.
9:13
Applicants will then have a grace period of nine months from the first of January to apply for equivalent rights in the UK and take advantage of the earlier form applications, finding date, or if there is one of the priorities that date.
9:27
So positive steps will be need, will be needed by trademark owners in these circumstances.
9:35
In the case of community registered designs, which existed prior to the first of January 2021, the UK IPO will also place on the UK. Designs, register new UK registrations for each registered community design. These are classified as reregistered UK designs.
9:55
The reregistered design will be a fully independent UK right, and will inherit the registration application and priority dates from the corresponding community design.
10:07
Like comparable marks, these equivalent rights will be created at no cost to the owner of the community design.
10:14
They can be identified by the number allocated to the re-register design, which will consist of the full Registered Community design number, with the prefix nine.
10:26
Again, like the comparable trademark, right, there will be a similar ability to opt out, in which case, the re registered design will be treated as if it had never been applied for or existed under UK law. This will not be possible where the rewritten to design has been assigned licensed, or is the subject of an agreement where the re re-register design is the subject of litigation.
10:51
So moving on to renewables. Once a re register designed has been created, it will retain the renewal date if the parent community registered design, and then we will be renewable every five years up to a maximum of 25 years.
11:07
Separate renewal fees will be payable for each comparable UK, re-emerges to design.
11:12
And the existing community designed from which it was derived.
11:16
These will be payable to the UK IPO and the EU IPL respectively.
11:21
The UK IPO will continue to send renewal reminders to any UK register design owners and advances the expiry date.
11:29
However, as with comparable trademark rights, where the re-register design expires, within six months, of the end of the transition period, the UK IPO's introduced a modified procedure, allowing for renewal within six months of notification by the UK IPA.
11:46
Again, as with the comparable mark, if the renewal date falls after the end of the transition period, renewal fee will be payable to the ... PO, even if the community design renewal fee had already been paid previously.
11:58
So, make sure that you pay both renewal fees or risk of losing your rights.
12:04
And we're at Richland Community Design has expired within six months of the first of January 2021 but remains on the Community Design Register.
12:13
Reregistered design will be created will expire status, if the corresponding community design is renewed late, The corresponding re-register design will also be treated as having been renewed without the need to pay a renewal fee for the UK IPO, and when rent no revenue is made, the reregistered design will be removed from the UK IPO Register.
12:37
Where a rich the community design is re-instated after the first of January 2021, the owner will be entitled to a re-register design provided the filing date predates the first of January 2021, where applications are pending at the end of the transition period. Applicants can take advantage of the application filing date by making an application to registry UK design within nine months of the end of the transition period.
13:05
To do so, the application must relate to the same design as the corresponding registered Community Design.
13:14
Where an applicant of a register Community design has opted to defer publication of the application for up to 30 months and the deferment is ongoing as that first of January.
13:25
The applicant will be able to preserve the only finding and priority date, provided that it applies for an equivalent registered design and a UK IPO within nine months of the end of the transition period.
13:37
In this scenario, there'll be no need for a substantive examination, since this would already have been carried out by the EU IPA.
13:45
Provisions have also been made put it in place to allow deferment of the corresponding application by up to a maximum of 12 months.
13:58
Full protected, registered international designs with an EU designation, existing at the end of the transition period.
14:05
The UK IPA will create a reregistered International design, which will be identical to the re registered Designs created from registered Community Designs.
14:15
The number allocated to the reregistered International Design will reflect the International Registration number prefixed with the Number eight.
14:22
Similarly, there are provisions which deal with pending applications and applicants need to apply within nine months of the end of the transition period.
14:32
It's also possible to claim earlier registration and any priority date, whether it's an earlier corresponding UK National Register design application.
14:42
Similar provisions apply in connection with the ability to opt out, renewals, late renewals, restoration, and deferred publication.
14:52
Moving on now to unregistered designs.
14:58
We will shortly see several new unregistered design rights and work within the UK.
15:06
Where community, unregistered designs are protected in the UK, as an unregistered community design, before the first of January 2021, they will continue to be protected for the remainder of the three year term.
15:19
That's UK, continuing unregistered community designs effected from first of January.
15:26
The fact that the corresponding unregistered community design was established before first of January, through first disclosure in the EU, but outside of the UK, will not affect the validity of the continuing unregistered design in the UK.
15:44
Following the end of the transition period, the UK will also be creating a new unregistered design, right, called a supplementary unregistered design.
15:53
This will ensure that the full range of unregistered design protection available in the UK before the end of the transition period will remain available.
16:03
Supplementary, unregistered design will effectively provide the same protection as the community on registered design of both 3 and 2 dimensional designs for a period of three years.
16:13
Although, of course, the scope of protection will be limited to the UK, its protection will not extend to the EU.
16:21
The supplementary, unregistered design will be established by first disclosure in the UK.
16:27
So first disclosure in the EU will not establish the UK equivalent design, and it may destroy the novelty in that design from a UK perspective.
16:38
Should you latency to claim UK unregistered rights, and similarly first disclosure in the UK may not establish community unregistered design right, could destroy the novelty, and that design should unite to seek to claim EU unregistered rights.
16:55
So it's not clear yet whether the marketing of a design simultaneously in the UK and EU, for example, by live streaming online, would give rise to both community unregistered design and UK, supplementary, unregistered design?
17:10
So it's now more important than ever, to carefully consider how when and where you first is going to designs in order to establish unregistered protection in the markets, most important to you.
17:25
To existing UK, unregistered design, right? We'll carry on as before, and will exist alongside the continuing and supplementary on registered design rights. So we'll have three to think about.
17:38
It will continue to provide protection for the shape and configuration of three-dimensional articles for up to 15, up to 15 years, from the date of the end of the year, in which the design was first recorded, or a corresponding article, was first made, which is cutshort to 10 years from first marketing, of the, product, made the design.
18:01
However, the qualifying criteria, UK design right will change, on the first of January.
18:09
Until the end of the transition period, UK design right could be established, and in the following circumstances.
18:15
So, by a designer who is resident in the EU, by a business employing designer formed on the laws of an EU member state, or where the first disclosure of the design code in an EU member state? This means the activity inside the EU to outside the UK could be sufficient for establishing UK design right.
18:40
But from the end of the transition period, the qualifications for the UK design right will be limited to individuals resident in the UK, or a qualifying country as defined by the act.
18:52
Businesses formed under the rules of the UK or qualifying country Where qualification for UK unregistered design, right Is as a result, first marketing, you'll need to have first marketed articles made to your design in the UK or a qualifying country, so no longer EU member States. So, I'll just pass you back over to Margaret is going to talk about copyright.
19:18
That was, the main change is focus on trademarks and designs. I want to quickly look at the position of other IP rights. First of all, I want to look at copyright.
19:30
Copyright Law has largely been harmonized across the EU, primarily by way of directives, rather than directly applicable AQ regulations.
19:38
In addition, the UK is a signatory to a variety of international copyright treaties.
19:43
So as a consequence, most copyright law will remain, at least for the time being unaffected by Brexit.
19:49
There are, however some minor changes which will occur after the end of the transition period, which have been set out in the relevant regulations.
19:57
As part of the UK's qualification requirements for copyright protection, the UK currently recognizes copywriting works made by a national, resident, or business of, or first published in or transmitted from, the UK, another a state, or another third country that participates in the international treaties on copyright.
20:17
Following the end of the transition period, all references to the EEA will be removed from the existing qualifying criteria.
20:24
However, since all AEA states currently participate in the treaties, the status quo will be maintained And so far, for the time being, at least, qualification for copyright protection, when change.
20:38
The position of orphan copyright works. That's where the rights holder is either unknown or can't be found, will change.
20:45
The Orphan Works directive will no longer extend to UK cultural heritage institutions, and those institutions will no longer be entitled to make works available online in the AEA under the orphan works exception.
20:59
In the UK, the exception to copyright infringement for orphan works, will cease institutions that wish to digitize and make orphan works available online in their collections, will no longer be able to do so in the UK under the exception to copyright.
21:14
This means that works that UK institutions have previously placed online will have to be removed to avoid infringing the copyright in those works.
21:21
Alternatively, in the institutions that wish to maintain their online collections within the UK, will now need to do so via the UK's own Orphan Works licensing scheme.
21:34
The government intends to repeal the portability regulation.
21:37
This is the regulation which allows consumers across the to access online content, for example, Netflix and Amazon Prime, as if they were at home when they travel in the AEA.
21:48
This means that UK consumers visiting the EU and EU consumers as consumers visiting the UK.
21:55
I like to see restrictions to the content ordinarily available to them when they're in their home state.
22:02
And finally, the government also intends to make it an offense to use a satellite broadcast Dakota device, intended for an EU audience to access a program included in a UK broadcast and thereby avoid paying access charges.
22:16
So what's the long-term outlook for UK copyright law?
22:20
We're looking forward beyond the transition period.
22:22
It's unclear whether the UK will retain Harmonize laws and if it does, whether the UK Courts will interpret them afresh or whether they'll follow the Court of Justice's rulings.
22:32
The government has already indicated that it has no plans to implement the directive on copyright in the digital single market into UK law.
22:40
That's the directive, which represents the EU's program of reforms.
22:44
Covering the press publication rights.
22:46
Online content sharing service providers and protections for authors and performance.
22:52
And additionally, we'll have to see whether the Court of Justice's ever widening approach to the protection of utilitarian industrial designs through copyright will find favor with the UK cordes whether this will be an area where the UK courts will readily divert away from the EU's approach to copyright protection.
23:12
There will be changes concerning the EU database, right.
23:16
This was created in the UK, following the implementation of the database directive in 19 96, and gives protection for databases.
23:24
Although a database doesn't have to be original for a 25 database, right, it does need to be a substantial investment in obtaining, verifying, or presenting the data.
23:33
The relevant regulations provide that following the end of the transition period.
23:38
Any EU database rights, existing at the end of the transition period, will be preserved for their entire normal duration.
23:45
UK citizens, residents, and businesses will be eligible for a new, UK specific database rights and qualifying databases, which they make after the end of the transition period, And that new right will give the same rights in the UK, as the EU database Rights, Gibson a.
24:03
Conversely, when new databases are created by residents, nationals, and businesses in the EEA after 31st December 2020, they'll continue to be protected by an AAU database, right. But that right, will no longer get protection in the UK.
24:19
So, as a consequence, a new database created after 31st of December 2020 will either attract UK database, right, or a new database, right, depending on where it was created.
24:34
As for patents, there's little harmonization of substantive patent law at EU level, and Brexit has a direct impact on the application processes, and the registration systems for UK Domestic Patents, which are administered by the UK IPA.
24:47
And European Patents Designating the UK, which are administered by the European Patent Office, which is not itself an AAU institution.
24:56
The UK's membership of the Patent co-operation Treaty and the European Patent Convention remains unaffected, and the UK and European patents continue to be enforceable in the UK in the same way.
25:09
With regard to supplementary protection certificates, which can extend the duration of patents for plant protection products or additional products, a yellow will continue to apply to applications that are pending in the UK, as not the end of the transition period.
25:23
Future supplementary protection certificates for the UK will be granted only by the UK IPO and will be based on either national or European patents at a UK marketing or thought authorization, there'll be no change to the length of protection, all the fees incurred in connection with those certificates.
25:42
And that's for the unitary patents.
25:45
The UK's participation in a system for the registration of a unitary patent covering multiple EU countries appears to be quite remote.
25:53
The UK Government ratified the UPC in April 2018 that in July 2020, the government withdrew its ratification, announced its withdrawal in Parliament.
26:03
Indeed, the very future of the system itself is open to doubt in any event, participation in the unitary patent and indeed, the court is only intended to be open to your AU members.
26:14
So Brexit means that the UK won't be able to participate after transition period ends unless there's a special agreement reached with the AAU and participating states to permit the UK to participate as a third country.
26:27
With regard to trade secrets and confidentiality, the government implemented the Trade Secrets Directive in 20 18, The trade secrets enforcement regulations, as the directive largely reflected the UK law position, the regulations are essentially procedural.
26:43
Nevertheless the UK's departure from the EU, what directly affect the law on trade secrets, or confidentiality.
26:49
Any UK entity is doing business in the EU, will still be able to rely on and enforce the directives terms in any EU member states, because the directive applies regardless of where the secret holder is domiciled provided that damage suffered took place in an EU member state.
27:07
There are also regulations which touch on geographical indications and community plant variety rights.
27:15
Anyone holding a geographical indication, including designations of origin, traditional speciality is guaranteed in traditional terms of wine.
27:22
At the end of the transition period we'll be entitled to continue to use it in the UK, without any need for re-examination, unless its protection is derived from an international agreement to which the EU is a party.
27:34
If, however, a geographical indication loses its protection in the EU, at anytime after the transition period ends, then that look that right will also be lost in the UK.
27:47
As for the community plant variety, right, this is only enforceable in the, so the UK will be establishing its own plant variety registration system to operate from the end of the transition period.
28:00
Finally, with regard to dot EU domain names, it's currently the case that undertakings and organizations established in the UK and UK residents and citizens have been able to hold and register dot edu domain names during the transition period.
28:16
Once the transition period ends, UK undertakings, and organizations established in the UK, but not in the EU UK citizens who are not residents of an EU member state, and UK residents who are not EU citizens, will all lose the right to own adult a domain name.
28:36
And, from the end of the transition period, applications for the AAU domain names will not be accepted, from any of those entities, normal dot edu domain names, Paler to be transferred to them.
28:49
That concludes our run through of how IP rights will be changing following the end of the transition period and the key takeaway points around the slide.
28:56
Comparable rights will maintain protection of existing EU Registered trademarks and community rich designs.
29:02
Positive action will be required to maintain protection of applications not registered by 11 0 PM on the 31st of December.
29:09
And you'll need to watch this space regarding the extent to which ... may diverged from EU law, on the first of January 2021 onwards.
29:19
Have you found it useful and relevant in the current circumstances?
29:22
And if there was something you'd like further information on, or have a specific query on any matter that you'd like to discuss, please let us know. We'll be happy to help.
29:31
In the meantime, we've launched a free Helpline giving you direct access to a senior team of experts for free legal guidance on your life and business matters details on the screen if you'd like to book a session.
29:41
Thanks very much for watching, and we hope that you'll be able to join us for our next Brexit IP webinar.
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With Tom Ansell, Partner
Wednesday 4 November 2020
The UK officially left the EU on 31 January and the transition period will come to fruition at the end of this year.
But what will this mean to British citizens currently living in the EU who are considering a return to the UK? How does the housing market look for those living outside of the UK and can they take advantage of the stamp duty holiday?
This webinar will cover:
- Considerations for purchasing a property in the UK
- Current stamp duty rules for those living outside of the UK
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Webinar transcript
(Please note this is auto-generated and un-edited)
0:30
Good morning, everyone. My name is Tom Ansell. and I'm a partner and head of residential conveyancing here at Shakespeare Martineau.
0:37
Welcome to today's webinar where we're going to be looking at the considerations for purchasing properties in Britain.
0:45
This webinar forms part of our series relating to Brexit. And it's really aimed at anyone that might potentially be looking to move back to Britain from Europe.
0:57
So just looking, first of all, the things that we will be covering in today's webinar, it's really designed to give a bit of an overview on the current position in the market. As well as, just letting you know about potentially more about the stamp GC holiday. And how that could be used. If you're looking to purchase the property at the moment in, in Britain. So looking at the topics that we are covering today, so we're looking at the current position in the property market.
1:31
And that will be followed by just a short, a short section, regarding topical conveyancing issues. Currently in Britain, so a brief overview of a few things that are quite topical in the market at the moment. And then, we'll be looking at sanctuary city land tax, and the position pre Cove in 19.
1:53
Because coven 19 has had an impact on Sanjay Contacts and there has been a change of fact.
2:02
And then we'll follow that up with a look at ..., GT land tax and the current position.
2:08
And then finally, looking at the London transaction tax in Wales.
2:14
So first of all, turning to the first slide then, although the next slide. sorry, being the current position in the property market.
2:24
So it's fair to say, I think that some 2020 has seen a number of changes in the proxy market in terms of sort of how it's operated. And, you know, that, the changes externally has had quite an impact on, on how things have operated.
2:44
So, the start of the year that Conveyancing market was, no, quite normal. operating as it would normally.
2:55
And then, when it got to the sort of time around about March, when we were going into the locked down period, then that sort of time had a really big impact on the on the housing market. So, obviously, when when people went into Lockdown it, made it very, very difficult for them to put the house on the market and it made it also very, very difficult for people to be able to go and view houses and make Office. So. So you know, the action in the activity, in the in the market did reduce quite significantly during that, that sort of quite lengthy period over over the sort of March two to sort of April, May period.
3:41
Now when the country was coming out of Lockdown and what we found was there was quite a lot of pent up demand.
3:50
So, the market did pick up quite significantly and then obviously, we find ourselves in the position where we are now, where the market is extremely, extremely busy, and you'll see on the slide that rightmove.
4:06
So, so, quite a big industry, body in relation to the housing market, have reported an increase in asking prices at 5.5% in the calendar year.
4:18
So, the average price, that reporting is now £323,500, which is an increase over all of £16,018 in calendar year.
4:30
So, that really shows you know, how will the housing market has bounced back and how strong it currently is.
4:38
Now, the reasons behind that, as I've just alluded to, you have the pent up demand. You know, people have spent a lot longer at home than they probably would normally. So potentially realize that you know that they wanted a bigger house or or somewhat different or a change of scenery. So, so off the back of lockdown that created quite a big pensive demand.
5:04
And, you know, first, following on from that, the introduction of some cheesy holiday. And the fact that that is only for kind of a period of time up until the end of March has meant that there has been a bit of a rush to the market to try and benefit from from the potential savings of the fact that GC holiday.
5:26
You'll also see that some lenders are reporting that mortgage mortgage applications are a 12 year high, So this is further example of, of, you know, strengthen the market payment, and the fact that there are large, large numbers of people that are currently looking to move, move, house, looking at potential predictions for the future.
5:52
So, the market is a bit uncertain at the moment. And I think it's fair to say that, you know, that, there were, there was a lot of uncertainty externally, as a, result. It. just make it very hard to predict how the market will be impacted. In the, in the medium term. Even in the short-term. So, you know, a President, the market is very strong us, as we just discussed, you know, lots of activity and certainly an increase in activity a year on year at the moment.
6:20
But, but, obviously, you know, the assumptions hold a man can then march.
6:27
So, you know, that, in terms of how that might impact the market moving forward, it is difficult to predict.
6:34
Some youth in the industry, experts are predicting price reductions in the short-term, but some also believe that there'll be an increase in prices in the next few years. So, so you know that there is no real consistency an agreement in terms of what might happen with the market. But, but, you know, as we've set a precedent is very strong, and that doesn't seem to be showing any signs of reducing the at the moment.
7:05
So, just a quick look at a couple of topical Conveyancing issues in Britain. So, the first point is regarding the home buying and selling group.
7:15
Now, the home buying and selling group is a group of industry stakeholders. So, basically, pulled together a group of people, whether it be solicitous, state agents, mortgage companies, who have been looking at ways to improve the home buying process.
7:33
And now, the home buying process is something that, you know, lots of industry stakeholders have been saying needs to be modernized and just this sort of can take a long time to go from from sort of starting and transactions completion. Now, unfortunately, due to increasing regulations and increasing demands, then, you know, over over time that that sort of timescale house has slowly increased. So so what we're sort of what the back that particular group looking at is how we can you know pull that back Swami and try and increase the speed and efficiency of the actual process.
8:14
So one thing that we're looking at is actually You know how can we provide more upfront information. So so so you know, if somebody is selling a property, actually having as much information upfront as they possibly can provide so that they have everything, you know, so that buyers pay if they put the offering on the property and then then then they can have access to the documentation.
8:39
In fact, sort of additional documentation can be that semester more quickly. Now that could be planning documents or things that potentially, as I say, you would want during the process. If that was provided earlier.
8:57
When the property is put on the market? Potentially. Or as soon as the property is sold and then that could potentially save time in the future. So, it is quite an exciting time in terms of, kind of, looking at how those things develop, because there's also a tool called things like property log books. So, if you own a property, you have a log book.
9:17
which, which, you know, again, has further information about the property, means that if anybody is looking potentially to purchase it, then they can have access to that log book, and it would have further information about the property and also, things such as reservation agreements. To mean that when you put an offer in other property, then it's a binding offer at that point. And the idea of that is that it should hopefully reduce the amount of transactions that are falling through, and potential costs that are incurred off the back of that. So, I think it is an interesting time for the market, because there is a push for change, and it'll be interesting to see how that sort of moves in the next few years.
10:00
So, the next points on the slide is leasehold issues.
10:03
So, if you were considering purchasing a lethal property and then then it's just worth mentioning that there has been recently a bit, a bit of a controversy regarding escalates and grandparents. So, escalating grandparents are circumstances where, for instance, you know, you have at least that is for 99 years, or 125 years. And there is a brand is payable, and that there are provisions within the lease to confirm that that ground rent doubles every 10 years, or 15 years or whatever the case may be. Now, as you can appreciate, if, you know, if at least starts off with the grammar of £250, and then it doubles every 10 years for, you know, telling you 125 year period, then potentially come come sort of halfway through the term, or towards the end of the term, then the grandma payable would be extremely high. And obviously, them potentially make it very difficult, Sell the property.
11:08
So there has been a crackdown in relation to this, and, you know, mortgage companies, developers, buyers, have become more aware of this type of thing.
11:21
So, so, it is something that is quite topical. So, if it is a leasehold property that you were considering purchasing, then, you know, just just make sure that the sort of fragments of a level that doesn't cause a problem potentially selling the property or potentially problems with mortgage companies of the us. Conveyances and solicitors. This would be something that we would check on your behalf and advise you on, but. But but it's just ready to mention that because, as I say, it is a it is a topical points at this moment.
11:56
Finally, on this slide, just anti money laundering considerations. So, as conveyances and solicitors, we have to ensure that we are compliant with the AML regulations. I won't go into full detail about the regulations at this point, but just to say, You know, if you are buying a property, then we would need to have sites of satisfied identification. And we would also need to see the source of any funds that you all received using to patch the property. Sorry. So, you know, if you have a certain amount of money that you are providing to purchase the property, that, we would need seeds that, have evidence of where that money was coming from.
12:37
Now, if, potentially, you are moving back to this country from a European country, than it might be the case that any sort of documents, bank details, you know, utility bills or whatever it might be, that you're providing for ID or source of funds, might need to be translated, perhaps, because, you know, we would need to see them in a format that we would be able to kind of have a look at and sort of understand if it is a case that you're looking to patch the property than than just making sure that the documents, that you provide a suitable for the needs of a conveyancer.
13:13
I've included this slide just to be able to give you a bit of an overview of the ...
13:19
rules and the position pre coded 19 because 1 of the focuses of this webinar was just to look at how the rules may have changed over the lockdown period. And whether or not, you know, if he were to move back or be looking to purchase the property in Britain, whether or not you can take advantage of the Sumptuous holiday. So, I thought it would be beneficial just to look at what the rates were previously and then look at what the rates are now. So, what you can see, Inference view all the sort of some sheets you write prior to the stamp GC Holiday being announced. So on the left-hand side you'll see that you've got stand standard ... GT land tax rates and you will see that sort of breaks it down In terms of the tax is payable on, on, on a property that you're purchasing and the potential rates that you may may incur for your sound cheesy. And on the right-hand side, this is the scenario where you're purchasing a second property.
14:24
And the rates in those scenarios in that circumstance. Sorry. You pay a 3% surcharge. So you will see from if you compare the the sort of figures on the left of the screen to the right of the screen, there is a 3% increase on on each banding.
14:43
So, just to clarify, obviously, when these, these sort of rights will apply. So on the left hand side, the standard assumptions land tax rates will apply in a scenario for instance, where you already own a property. So you're you and your family or yourself, a currently living in a property, and you sell that property and move to another property that you're intending to occupy.
15:08
Then the right, so my left hand side will apply my circumstances on the right-hand side. So, again, for example, you currently own a property that you're living in and you decide that you want to move house.
15:19
But you're going to keep your existing property and make petabytes of that. And then in that scenario, you will end with two properties and as a result, you would pay the increase in in the stamp duty when you purchase the second property. So it would mean that that your, ... would be increased in line with the rights that you can see there on the, on the right hand side.
15:43
It's also worth mentioning that, as a first time buyer, So, pre, pre the sumptuous holiday. If you are a first time buyer, then the, that was, already assumptions, hold a place on anything up to £300,000. So, if you're a first time buyer, and you were purchasing a property, that was under £300,000, that was next time sheets payable at that point.
16:13
So, now, I think it would be useful for us to look at the current position in relation, stomach Elan attacks. So, as I've already said, the government, off the back of Lockdown decided that they would introduce system treats the holiday. Now, this assumptions hold a was designed to add additional stimulus to the proxy market. Because we had gone from a situation where, you know, we have no activity at all. Everybody goes and locked down, you know, it's very, very difficult for transactions to complete to a circumstance where things opened up, albeit in a controlled manner. But that, but, you know, that was sort of activity happening, and people were able to pep proxy proxy and the markets, or, you know, look to purchase prophecies again.
17:02
So, so, the government, I think, sort of decided to do was temporary holiday. So that that added a bit more extra stimulus to that situation. So, you'll see on the screen I've confirmed the snowstorm GC currently, payable on a patch, up to £5000.
17:20
Now, the rates that you can see in front of you on the screen, that bear the current rates for the situation where you, you know, you're selling your existing property and you're moving to another property that you're planning to live in. So, so, so you know in those scenarios If that is what you're doing, then, then then you know, there are significant savings that can be currently had in relation to some GT that is payable.
17:49
So you will see from the slide that the Stone GT holiday is ... and at the end of March 2021. So time is very much taking. In this respect. We now at the beginning of November.
18:01
So, um, so we have by my reckoning just under five minutes in order to benefit from from any sort of savings. That might be possible and under the treaty holiday.
18:15
You remember, on the previous slide, we talked about the situation, where you're purchasing a second, property. So, you know, if you own a current property, your converts, and that's what parts of that and you move to a new property. Then, there will be a surcharge payable. Now, that situation is no different here, that there is a surcharge payable of 3% as asked before.
18:37
But, that would potentially be a savings to be had because now you're paying 3% on anything up to £500,000. Whereas previously, you are paying, you know, 3% on a, on a significantly reduced purchase price. So that so, so overall, this, this term sheets hold that does benefit though is that, you know, we're moving houses the family. Or maybe you know, investors that are looking to purchase additional properties. Now, you will see the rates are due to revert back to previous speakers after March 2021.
19:12
Although, there is talk in the industry of trying to see if an extension can be, can be agreed in some way. Just to make sure that, you know, the momentum that we've built in the market in the momentum that currently is, just continue. So, so, you know, nothing has been confirmed on that at the moment, but I do know that that's sort of industry stakeholders are trying to see if there is some sort of extension that can be agreed. So so I guess it is, watch this space. For that one. The next slide covers land transaction tax, which is very similar to stop chasing, but this is the regime currently in Wales. So whales do not have the sort of some juicy land tax regime that their equipment is called land transaction tax.
20:05
Now you'll see in front of you and the current rates. So this is a situation where, you know, you're looking to purchase a property in Wales, potentially.
20:15
And, you know, that, they're very similar in terms of the left-hand side is a scenario where you are, you know, moving home family or whatever the case may be.
20:27
And the right-hand side is where your, your, your looking to purchase a second property. So there is a surcharge payable in that scenario as well, but the figures and the rates are slightly different.
20:40
So my advice really would be that if you're looking to patch the property, whether it be in, you know, in UK, or, sorry, in England or in Wales, and then just make sure that you've sort of chat out the rights to to ensure that you're aware of how much And in your particular circumstances, you would end up paying fees down GC oil and transaction tax.
21:01
Now, know, we deal with some GCS conveyances and transaction tax on a regular basis. So Any queries that you might have and you know, if you wanted to try and work out how much you might pay in your particular circumstances. Then we can try and help. If it is a particular particularly complicated matter that it might be that we would say, you know, to seek specialist advice from a stamp duty expert. But, but, but, certainly, you know, if you have any queries in relation to what you might pay, then then, then that's something that we can, we can help with now.
21:38
In relation to the land transaction tax, they are also benefits from a current holiday in relation to the rights, although, this isn't is as significant as the current cool they in England.
21:50
So, the amount on the left-hand side, you'll see that there's no tax currently payable on anything up to £250,000. Previously, before the holiday, that rate was £180,000. So, so, pre, prior to the holiday, and there'd be no tax payable on anything, up to £100. There has been a slight extension that people will benefit from from, as I say, because there are some right on a slightly higher purchase price And the fourth Now, as with England, that rate is two to refer, back, come the end of March 2021. So, so, it does tie in with the with the Holiday Inn in England.
22:36
Just looking at in conclusion then. So as I said in the first point, the property market is, is strong at, the moment is very strong, and we've seen a lot of activity.
22:46
But the time is ticking to take advantage of some cheese holiday.
22:51
If you're moving back to Britain, then you can benefit from some GC holidaying in the circumstances that we've discussed.
22:58
But if you have got circumstances that, that you're unsure about that, then we are always happy to help. So you just need to contact us and we can discuss that further.
23:10
The rates will increase again from the first first of March, 2021, unless further measures are announced.
23:18
And if you are considering, as I've just said, if you are considering back, moving back to Britain in the coming months. And we'd like to discuss this further than our combined team would be only too happy to discuss this with you.
23:31
So, so, please, do not hesitate to contact us, just introducing our free legal help clients. And you see in front of you that, we have launched a Free Helpline, which will give you direct access to to our team of experts, who are able to provide you with some free legal guidance on, on any matter. The, you know, we're able to assist with, so you'll see on the screen, there is a phone number, and that, that help find is valuable from 10 AM to 12 PM between Monday and Friday.
24:06
So, finally, thank you very much for listening, and I hope you found this useful and informative. And if there is anything that you would like further information on, please do not hesitate to get in touch.
24:17
Thanks for listening this morning.
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With Matthew Sutton, Partner
Thursday 22 October 2020
Businesses need to act now and prepare themselves for when the UK’s Brexit transition period ends on 31 December 2020.
Those that trade between the UK and EU, and GB and Northern Ireland, can expect to see several changes and the knock-on effects are yet to be understood in full. Regardless of a deal or no deal, all businesses need to be thinking ahead about their commercial contracts and supply chains come January 1.
This webinar covers:
- The current status of the UK-EU trade negotiations
- The potential impact on business supply chains and commercial contracts
- Key predictions for businesses involved in UK-EU trade and GB-NI trade and what to do next
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Webinar transcript
(Please note this is auto-generated and un-edited)
0:09
Good morning.
0:10
I'm Matthew Sutton a partner in the commercial and IP team here about Shakespeare Martineau.
0:17
Welcome to today's webinar on Commercial Contracts and Supply Chains.
0:23
So in this morning's webinar, we're going to look at a number of topics all very briefly. But you will see there's a list on the slide. So we're going to have a brief look at the current position and the state of negotiations between the UK and the European Union.
0:40
We're also then, going to spend a little bit of time just looking at what the future UK EU relationship, after the transition period will look like. Hopefully, it will be clear, at that point. I think some of us would have hoped that it maybe would be a little clearer by now, but I guess that's in the nature of things.
0:58
We're gonna look at some of the possible commercial implications of that future relationship, and how we might future proof commercial contracts, or how you might have already started doing this, or done this already.
1:10
And then we're going to spend a few minutes just looking at a couple of areas of commercial law, which are pretty sort of important in the context of commercial contracts, and see how they may change in the future, OK, so the current position there.
1:27
OK, so we all know that the UK left the European Union on the 31st of January, 2020, we entered into a transition period, which will end, at the end of this year. And the government has, and did this a long time ago, back in the, the early parts of the world, at an extension of the transition period.
1:45
So the political declaration, which was agreed at the time of the withdrawal agreement, set out the framework for the future EU UK relationship.
2:00
And you might recall that in describing that future relationship.
2:04
The political declaration refers to an ambitious, broad, deep and flexible partnership across trade and economic co-operation with a comprehensive unbalanced free trade agreement at its core. Now, the political declaration isn't a legally binding document, but both parties agreed to use their best endeavors in good faith, and in full respect to their respective legal orders, to take the necessary steps to negotiate expeditiously, the agreements governing their future relationship referred to in the political declaration. So that all sounds quite promising.
2:39
So negotiations didn't really start for a trade deal until March, and as we know, from the news, what the UK seeking is, is effectively a similar trade deal to the, the war, the European Union, as negotiated with Canada.
2:59
OK, so the UK government set a deadline of 15 to October for a trade deal, so that was the European Union Summit last week.
3:09
And as of Friday negotiate, well as off as of yesterday morning when I, when I prepared the slides, negotiations were stalled now.
3:18
If you saw the news last night or this morning, you know that they are now effectively unsold.
3:25
And trade talks are due to re commence today.
3:29
As of last Friday, the Prime Minister made a statement, indicating that the UK needed to get ready to trade with the European Union next year without an agreement, which you suggested, was an arrangement similar to Australia.
3:46
And this was in response to the European Union, position, that, before negotiations could be intensified, they needed to see further compromise, digital concessions, from the UK government.
3:57
So, again, you know, from the news that there are really sort of three issues that, uh, causing issues in the context of the negotiation.
4:07
What is fishing rights? The second one is the level playing field.
4:11
And the third one is dispute resolution so so the same, maybe slightly, I don't know what the best word is arcane paps, but I guess they sort of really go to the heart of what Brexit is about, really, and that becomes clear when you sort of think about the UK's negotiating position, which, which was set out in the Prime Minister Statement, back in February where he made three things clear, particularly.
4:39
one is that any future agreement with the European Union must respect UK, national sovereignty that the UK wasn't prepared to give any commitment, or certainly no significant commitment in relation to regulatory alignment with the European Union.
4:56
That the UK parliament would have control of, of its own laws and that for a similar reason. The UK couldn't accept any jurisdictional or dispute resolution role for the Court of Justice of the European Union, which is C J EU in that note.
5:12
So when you think about how those sort of, those sort of positions feed into the key issues while fishing rights, from a practical perspective, I guess you'd say fishing is really a, a fraction of of 1% of the UK economy.
5:29
But control of access to British waters for fishing is really, or has really become almost up a litmus test of the extent to which the UK has, I guess, taking back control to use to use it from the Brexit debate.
5:46
So the significance of phishing has almost become sort of disproportionately symbolic of the the benefits or the reasons for Brexit, I guess. Then you have this issue around the level playing field.
5:57
Well, I guess you've got on the one hand, you've got the European Union who are nervous that once the transition period ends briton will deregulate furiously so that potentially, they would be faced with a low regulation, low-cost competitor, with access to the European single market. And And obviously, that is a much with some concern for them. On the other hand, many people in the UK would argue that sort of, you know, having control over one's own laws was essentially the essence of Brexit.
6:30
And for that reason, you know, they are sort of very keen to reject any suggestion that the UK should be aligned with Brussels in the future. And that sort of plays out similarly, a dispute resolution mechanism.
6:43
This idea that you, the UK should be subordinate to the jurisdiction of off of the European Union Court. So, you can see, there's some sort of, potentially, sort of very significant issues to be resolved.
6:58
And you'll see at the top of the next slide, uh, you know, I've made a point there, about the European Union position, so that the important to them of the level playing field.
7:08
And, I guess how you've seen that manifest itself, particularly in the debate recently, is, you know, the point that sort of constantly mentioned is the extent to which the UK should be bound by the European Union's rules on state aid.
7:25
So so you have these sort of issues, which are still in play, sort of parallel to this, you've had sort of again recently in the news, the issues around the sort of the Northern Ireland protocols. So what is the Northern Ireland Protocol?
7:37
Well, again, I guess as many of you will know, the, the, the Northern Ireland protocol was negotiated and agreed as part of the withdrawal agreement. And the purpose of the protocol is to avoid a hard border on the Island of Ireland.
7:54
And the way it does this is, well, the first thing to note is that Northern Ireland remains part of the UK customs territory.
8:03
So, goods moving from Great Britain to Northern Ireland.
8:07
Don't ordinarily attract a tariff.
8:09
However, if those goods are deemed to be at risk of being moved into the European Union, then he no circumstances.
8:20
And the relevant EU tariff would be applied on movement of the goods from Great Britain to Northern Ireland on the basis that it would be the tariff would be reimbursed. If the goods can be proven, TIF stayed in Northern Ireland, so goods moving to Northern Ireland. Don't attract a tariff.
8:40
If if those goods are to stay in Northern Ireland. But if there is a risk of them moving into the European Union, then potentially the European Union type would be chargeable.
8:48
Similarly, there are no regulatory checks on on goods moving between Northern Ireland and the Irish Republic. And that's essentially because Northern Ireland will remain part of the European single market. But what that does mean is that certain goods and agricultural produce, which are moving from Great Britain to Northern Ireland, are subject to regulatory check so effectively, and this is, and this is where you sort of have this idea of a Customs border or regulatory checks border in the Irish Sea.
9:23
So that was agreed as part of the withdrawal agreement, and then we had something called the UK Internal Markets Bill. I'm onto Serco, which is intended to regulate trade across the United Kingdom once we leave the single market.
9:38
So, that all seems fairly sort of anodyne, However, it is, or it became very controversial, because, effectively, there are some provisions in that bill, which give UK ministers the unilateral power to amend how the United Kingdom implements the Northern Ireland protocol, which, which would effectively breach the withdrawal agreement.
10:00
So, the reason the government says it needs these policies to ensure that Northern Irish businesses have unfettered access to to the UK market, and there are also concerns about how the commitments in the Northern Ireland Protocol in relation to state aid may have implications for, for the, for the rest of the United Kingdom. So, it's important to say that this bill isn't law yet. It's still in the House of Lords before and then it has to go back to the House of Commons. It has been subject to a number of amendments and that might be further amendments that come into play. But I think the the bill itself proved to be quite inflammatory in talks with the European Union.
10:41
But potentially, I guess, the fact that the Belize in the House of Lords and trade negotiations, in that week commencing potentially creates a window for the trade negotiations to be completed and possible. And possibly, I guess, for the, for the provisions in the bill that were most controversial to be rendered unnecessary.
11:01
So I guess that leaves us with the issue of whether or not the reason likely to be a deal.
11:06
Well, I guess most commentators, I think, think on the balance of probabilities. And that's obviously, I guess, strengthened by the fact that talks of recommenced, that a deal is more likely than not.
11:22
So at the moment, no, we're looking at probably a choice between a Canada style trade deal and they a World Trade Organization, no deal scenario with probably a Canada style trade deal.
11:37
Being being sort of marginally favorite, OK. So before we just look at what that might mean for us, let's just have a look at where we are now.
11:49
So, in the transition period, as we know, we continue to participate in the European Union customs on the single market. The four Freedoms continue to apply, so that means there is free movement of goods, services, capital, and people.
12:07
Most European law continues to apply in the UK, and the Court Justice of the European Union continues to have jurisdiction.
12:17
There's the European Union regime of mutual recognition recognition, excuse me, if regulatory frameworks continue to apply. And we continue to have the benefit of the free trade agreements, which the European Union's concluded with various countries across the world. There is provision in the European Withdraw Union withdrawal legislation for all EU law to be converted into UK law at the end of the transition period. So that's where we are at the moment.
12:47
So where are we going?
12:48
Well, we know, I think, absolutely, definitely, that we will be leaving the single market and the customs union on first January next year.
13:01
So if we arrive at a Canadian style trade deal with European Union, what effectively does that mean?
13:07
Well, I think that the key points and possibly, I guess the most important thing I will say in the next sort of in this webinar is that Canada's stalled trade deal is does not represent the status quo so it's not frictionless trade. So this isn't sort of business as normal if we do a deal. So, kinda style trade deal would remove tariffs on most of the deal with Canada, does this, removes tariffs?
13:34
Are most, but not all goods and some agricultural projects.
13:40
eight, it increase these quotas for those of you that don't know equate to effectively is a an agreed quantity of goods which attract a zero or lower tariff, but again, it doesn't remove coaches altogether.
13:53
It does very little and has very little to say about trading services. There is some mutual recognition of regulations, but, but not been on to a great extent. And I guess the key point is that customs controls continue to apply or would apply in this case. So that would still be regulatory compliance issues, even if no tariffs, which eligible.
14:15
And rules of origins checks would still be applicable to determine which type of supply.
14:20
And we'll talk a little bit about rules of origin and how they work in, in the context of WTO rules in a few minutes. So, I'll just put a couple of figures on the bottom of the slide. So, in 20 19, 7.9% of Canada's exports went to the European Union. In the same year, 45% of UK Exports went to the European Union. So, so, so, obviously you know how that deal applies.
14:43
It's going to have a far more wider ranging impact, potentially, on the UK than that, perhaps for Canada.
14:51
So what are the other choices?
14:52
Well, obviously, if we don't get a deal, we will end up with a no deal situation, which is sometimes called a WTO option, or even the Australian option on the basis of the Australians generally trade with the European Union on World Trade Organization terms. So what does that mean? Well, it means tariffs and customs, and it means no agreement on regulatory equivalence, although, even as I mentioned even in the context of a kinda small trade deal, regulatory equivalent, and market access for services, is likely to be fairly thin, I think. But what does all that mean? What do World Trade Organization rules? Actually Me I guess some of you will want to know that the World Trade Organization is an international organization whose purpose is to facilitate trade by providing a forum in which trading parties can negotiate.
15:47
And I guess the key points to have in mind is that the WTO does not determine any tariff levels once. A member has decided what tariffs it wishes to charge on imported goods and services. It submits these to the WTO in the form of a schedule.
16:06
So, at the moment, we are bound by the European Union schedule, but we submitted the UK. Government has submitted its own schedule, which will take effect on. first January, The schedules would form the basis of any trading arrangements between the European Union and the United Kingdom.
16:24
Uh, post the transition period if, if no deal is done. So again, just some figures to put that into some context. So the average you EU tariff on knockout non agricultural products is actually quite low. It's, it's, it's 2.8%, but you'll see there are some sectors where high tariffs to apply. So, because there is a tie for 10% dairy products, 35% a number of agricultural products I think have sort of relatively high tariffs.
16:53
So, meat, as well, interestingly, form first January under the newly submitted UK Schedule, at 47% of imported products into the UK will have zero terri's compared to 27% currently.
17:10
So just a couple of points on WTO rules there. Just to put some context around what what I've just been saying.
17:17
So so the most favored nation principle essentially means that sort of in the absence of a free trade agreement between countries, all goods, which are traded between those countries, must, must attract the same rule of duty as goods charged to two other WTO members.
17:38
So, so, what this means effectively is that, in the absence of a free trade agreement, the UK couldn't imposed lower tariffs on goods from the European Union, and the European Union couldn't offer favorable terms to the UK. What this does mean is that, you know, if we don't get a trade deal than, then we will be trading on WTO terms until such time as we, as we as we do negotiate trade deal.
18:02
And the WTO Rules of Orange, we origin, well, I mentioned those in the context of customs checks.
18:08
So effectively, these will apply for funds from the first of January, so. So what these really doing are trying to determine the economic nationality of a product that is being exported so these rules will apply whether or not we do a trade deal. So the point is that, to benefit from lower tariffs exporters have to prove that the goods concern have their origin in date.
18:32
A UK, or the European Union as the case may be, now for manufactured goods.
18:37
There are also some quite detailed rules about sort of where those goods are deemed to originate.
18:43
But essentially, for our purposes, I think it's fair to say that the country of origin is the last country where a substantial transformation to those goods took place.
18:57
OK, so very briefly, where we're going with the rest of the world, well, we're no longer parties, will no longer be party to the Free Trade Agreements negotiated by the European Union. And we're no longer bound by the European Union World Trade Organization schedules. So trade will be based on our World Trade Organization schedules, which will provide a baseline from which we will negotiate or ... more preferential trade relationships with countries. And, and that's that. That's something which has been an ongoing process. You'll see not, not too long ago. There was an announcement that the UK ..., a free trade agreement with Japan.
19:41
OK, set, significant change, an end to frictionless trade on First January next year. So, how might that impact on our trading arrangements? Well, we've got some examples on this slide. So, tariffs, obviously, potentially could apply. They certainly will apply certain areas if there is no trade deal.
20:07
I guess to the extent that we are trading outside of the European Union, or people are trading outside of the European Union, type rates for trade with countries outside the European Union may change, depending upon what, What arrangements are in place, too, to carry over any, any, any, free trade agreement that has been agreed with the European Union.
20:28
Customer checks will apply, both to goods moving from u.p.d.
20:35
and the UK, and in the other direction, and there is a significant possibility of delays.
20:44
So, I guess if you see in the press at all, recently, you'll see that there is, I mean, the the quantity of goods that moves through deva, for example, is phenomenal. So 7000 trucks around some thousand trucks. Use deva every day and sort of, as Einstein, the government's Smart Freight website won't be ready for testing until until the end of November. So what this means in practice is that there is a realistic risk, I think, of of some potentially significant delay, I guess, sort of certainly during the early part of next year. So yeah, there is a real risk of delays.
21:23
I think, in emulation custom checks, regulatory, divergence, well, you'll see we've talked about, sort of, the UK's reluctance. To agree to, to, to any sort of commitment, to regulatory alignment. So many businesses will have to comply with different regulatory requirements, because report in this morning's guardian, for example, that BASF the chemical company, which has six sites in the United Kingdom as reported that it's brexit related compliance requirements, will add a billion pounds to its cost of business. And some of you, I'm sure, will know, the UK has introduced a new product compliance regime. The UK ... Mark will replace the CE mark in the UK.
22:06
Will, but will not be recognized in the European Union.
22:09
So you will still need to see Mark to sell products in the European Union, potentially, labor, while we know freedom of movement is ending, so, so clearly, a risks around that. I know there are other webinars which deal with, which will, which will be talking to you about the impact of those changes. And exchange rates well, I mean, there's nothing sort of intrinsically linked to Brexit, which will affect the exchange rate.
22:35
But obviously the, the uncertainty around the end of transition might lead to to some to some exchange rate volatility. So.
22:44
So there's some significant, I guess, commercial risks around what's likely to happen at the early part of next year. So I guess the first question, then, we probably need to think about is if the effects of some of these risks is to make contracts, loss, making it more difficult to perform.
23:06
Are you entitled to any relief in those circumstances?
23:10
And I think, unfortunately, in the absence of express drafting, the answer to that question is probably no. So the first thing I just want to talk briefly about is the common law doctrine of frustration. So, so, you don't need a specific contractual term in your documents to rely on frustration. It's a piece of law, which is, which, is, I guess, generally available, if the circumstances justified. So, when can frustration apply?
23:38
Well, you'll see the first point on the slide, the contract must have been commercially, or physically impossible to fulfill, or to have been subject to a radical change in obligations. And, I think the reason, the recent case law in this area is probably not very helpful in the context of brexit related difficulties.
23:58
I think what's been made clear is inconvenience hardship, or financial loss, will not be sufficient alone to enable a contract, a party to set aside its contractual obligations.
24:11
And, you know, the other point to have in mind, is, is when you are, sort of, are trying to demonstrate your contract, has been frustrated. The alleged frustrating event generally must be one which couldn't have reasonably be forsee.
24:27
So so that's frustration. The other, the other area, which is sometimes thought of in the context of Brexit, is force majeure. So forth, monsieur is not something which implied. You do have to have a force majeure clause in your contract.
24:40
But again, I think the general feeling is that false monsieur, a standard force majeure course is, again, probably unlikely to grant much relief in the context of a brexit related delay or failure to perform.
24:58
Again, it's generally the case that force matures events. Don't include parties, events, which party a reasonably foresees all reasonable she to foresee.
25:09
And I guess the other point about force Missouri's, even if he could potentially cover the situation, it will.
25:17
Potentially, it could potentially grant you some relief or extra time to perform a particular task. But it certainly almost certainly wouldn't do, is give you any ability to recover any additional costs.
25:32
OK, so how do you sort of future proof your commercial contracts, what sort of things should you be thinking about? Well, Brexit clause is a good idea and I'm not sure if that's probably the right term, at this stage. I mean, maybe transition period clause is a better description. So these are clauses which trigger a change in rights and obligations in the event of a defined events. So that event might be the imposition of a tariff or the UK, leading A, leaving A, the transition period.
26:00
And the idea would be, the trigger event would would give rise to a specific ability to perhaps grunts an extension of time, or to pass on certain additional costs, which are incurred as a result of the event Coveting Clause. Force monsieur, we just mentioned, generally won't apply, unless it's been sort of quiet, unusually drafted. If you're a customer, you might want to make it clear that your force mature close don't apply.
26:31
States absolutely clear. There's no confusion about force measure. Termination rights. Well, the sort of thing we're thinking about here is you do you need a more flexible exit route in relation to your contract. So, can you terminate on, convenience it relatively short notice, or, for example, in the case of specific events, or cost increase of more than a certain percentage?
26:54
Price and delivery, so, so, so, I think, to the extent you haven't already done this, and I guess many businesses will, will be well on the way of looking at all of these sort of things. And may have already done this when we were looking at a potentially sort of abrupt exit from the European Union, the end of last year. But, but, if you haven't, it's certainly not too late. You need to be looking at the pricing provisions in your contract when you're selling or buying cross border off, prices exclusive or exclusive of duties and tariffs. Is it clear?
27:26
If you're selling business goods in two other UK businesses which incorporate important components or materials, can you pass on the costs of additional duties and tariffs?
27:36
You know, how are you using Incoterms?
27:40
Will the same incoterm be appropriate at the end of the transition period?
27:45
What currency is the contract payable eat? You know, are there any? Are there any clauses which allow you some sort of flexibility to pass on any cost increases Or require you to absorb cost increases in the context of changes in the exchange rate, VAT, which I've mentioned here is just remember that, at the end of the transition period, the UK will be leaving the European regime.
28:14
Some other areas, time for delivery, where we've seen sort of how, you know, there's a potential for delays with the introduction of customs checks. Certainly, Certainly in the early part of next year. What are your commitments around? Timing, in your contracts? Can you build in some flexibility around that? So, I guess, if your customer, are you prepared to allow any flexibility around that? What are the implications for the business further down the track? Personal data transfers.
28:44
Well, again, there will be a separate webinar on this. I think for transfers from the UK to the European Union. The UK government has indicated that these arrangements can continue after the end of the transition period without additional protections being put in place, But for transfers from the European Union to the UK.
29:06
At the moment, I think, and I think this is still the case, the European Commission hasn't made a decision as to whether it sort of considers the UK to have adequate levels of protection. So it is important that your contracts include appropriate contractual provisions and some advice and some advice around that is available from the Employee Information Commissioner's website.
29:29
Personnel.
29:30
Well, we've made, we've mentioned that you need to be mindful of the changes to freedom of movement, and how that's reflected in your contracts, and the implications that might have in terms of your ability to deliver certain services within certain timeframes.
29:45
Contractual references to the European Union.
29:47
So, this is particularly relevant if you are sort of in the context of Distribution agreements or licensees where the territory refers to the European Union.
29:59
It's pretty clear that a reference to the European Union from time to time probably didn't include the UK after 31st January of this year, and certainly wasn't included after the end of the transition period. So whether a territory is to include the UK or not, I think needs to be specifically dealt with.
30:20
I think when you're talking about references to the UK in a contract, it might be worth thinking about the potential implications of Brexit further down the road.
30:29
So, for example, a reference to the UK, as composed from time to time, might reduce the scope of a territory.
30:38
If, for example, Scotland becomes independent in the next few years, so I think it's it's definitely worth looking at the territorial scope of documents where, where, where, for example, you've been licensed or appointed to exercise a right in that particular territory, change the law. So just think about how sort of the, the, the end of the transition period.
31:06
And the departure from the European Union might affect some of the provisions, which which are the legal provisions, which apply to your contract in most cases.
31:16
As I mentioned, European your law will, will be incorporated into UK law.
31:21
And this may be sufficient to to preserve the legal position in terms of your particular contract sufficiently. But, but but it is worth checking that, to make sure that is the case and enforcing UK Court judgements is the final point on this slide, dispute resolution. So at the end of the transition period, the UK will leave the Brussels regulation. So so potentially, it could make it harder to enforce UK judgements, court judgements, in, in the European Union jurisdictions. I think it is prudent to, to think about sort of, if you do need to enforce a UK judgement in a, an EU member state following the end of the transition period, I think it's prudent to assume that the law of that member state will apply to the enforcement of your judgement and and, and that you should probably take some legal advice from, A Lot of Qualified under that jurisdiction.
32:19
OK, so, So that is some of the, sort of the key elements of, sort of key topics that I think you need to think about when you are Future proof future proofing your contracts or analyzing how the end of the transition period may impact on your on your contractual arrangements.
32:37
Just a couple of areas that we'll talk about just very quickly to finish off.
32:44
And these sort of, these are topics where these are areas where, I guess there might be some change in the future, or they might be particularly, you know, there might be some particular sort of issues.
32:56
So I think the first point you made to make is that I don't think that we much change to commercial law in the short term in the UK, following the end of the transition period. Although, given the sort of the British position on regulatory alignment, I think there is a possibility of divergence in the longer term.
33:15
So, one of the areas where this might sort of come up is, is the agency, as some of you will know, there is a piece of legislation in the UK called Commercial Agents Regulations, which derives from European Union law, and applies to arrangements between a principal and a commercial agent. And a key part of that, or the key aspect to one of the key aspects of that piece of legislation, is that a commercial agent is entitled to compensation in most circumstances where the agency arrangement comes to an end.
33:47
The energy transition dot, dot, dot, dot, dot piece of law will continue to stay in force.
33:51
However, I think there is probably a feeling, some areas that perhaps that might be over protective of agents.
34:00
And I think for a government, which is possibly keen to focus on free market policies and remove what it perceives to be barriers to business, there might be some pressure to amend or repeal that legislation, at some point, in the future.
34:14
But, but, but I guess that's that's that's not something that's going to happen, anytime, soon distribution.
34:23
There is no equivalent to the commercial agents, entitlements compensation, but distribution. Distribution arrangements are generally covered. Simply by the contract between the distributor and the appointing company.
34:37
However, those arrangements, distribution arrangements are though much subject to European Union and UK competition law. Now, those laws won't change on on at the end of the transition period, however, I think there were two points to just just have in mind at the end of the transition period.
34:58
The UK effectively becomes a a third country.
35:03
Further, the purposes of E Udall, that means, at the end of the transition period, distributors who sell UK products in the European Economic area will become subject to European Economic Area importer obligations.
35:20
What those obligations comprise case goes well beyond the scope of today's webinar, but they are more onerous than Than than the obligations of an Old Redistributive. I think it's fair to say that.
35:33
The other thing tonight is that, obviously, an EU competition law rules will only apply to to business practices of UK businesses to the extent they have an effect within the European Economic Area.
35:50
Uh, to the extent they are confined to the UK than European competition, law rules apply, those are based on European Union law, so they're very similar. And they contained in the Competition Act of 1998. And they won't change at the end of the transition period. But again, over time it's possible that UK competition law could begin to diverged from European Union.
36:20
I think that brings us to the end of the webinar. So if we have any questions, I'd be very happy to answer them.
36:32
Methane, We have had a couple of questions come in. So the first one is, In terms of customs. Is there any negotiations with respect to apply any concessions to oil and gas onshore or offshore goods movements?
36:50
I think that would probably have to be one flow of energy team. I'm not sure quite what's been agreed in terms of in terms of the negotiations to date, obviously. If we go to a WTO trading model and then, then, then, then, there won't be any such concessions. So so it really depends on how the negotiations and progress that might be. one, which is probably more ..., might usefully respond to that?
37:25
We have, well, if I don't have a Brexit clause in my contracts with customers, are there any Stanley provisions I can rely on instead?
37:34
Well, certainly. So you say, if you don't have a Brexit clause in your contract, then then I guess, the sort of things that you would be looking at ease.
37:45
Just my force mature claws apply.
37:48
Now, as I've said, it's in all probability eat, eat, you want, but it's not to say it certainly won't say there might be some opportunity for it to apply. It might give you some relief from some time commitment. So it might give you a bit of extra time to perform an obligation as the saying, inevitably, I won't give you an ability to pass on any additional costs.
38:10
I guess, the other things that you should be looking at A, really, sort of: To what extent to what extent am I sort of, bounding by specific timing commitments on delivery?
38:22
Or, to what extent, for example, Es, time of delivery, an estimate, or I have some flexibility around timing? So, so, what does a delay in delivering something actually trigger?
38:34
Is it automatically a breach of contract? Or do I have a window where I can, can deliver?
38:39
Not being breach of contract will have I just given a timing commitment, which is an estimate.
38:43
So, it's really sort of know, what? what commitments have been locked down, and, effectively, if I do meet them, will constitute a breach of contract, and to what extent do I have some flexibility around them? So thank you very much for attending the webinar.
38:57
I hope you found it useful and relevant, if there is something you'd like further information on, or have a specific query on any matter that you would like to discuss, please do let me know, and I'll be happy to help. So, finally, thanks very much for, for joining this morning.
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With Tijen Ahmet, Legal Director and Business Immigration Specialist
8 October 2020, 9:30AM - 10:15AM
Brexit is on the doorstep, which means the way we do business is changing.
With less than two months to go before the UK’s new immigration system is launched, employers need to understand how they will recruit non-UK staff from 2021.
This webinar will provide employers with an overview of how the new system will shape our future recruitment practices and provide practical solutions to support businesses to prepare today.
This webinar will cover:
This is a live event and there will be an opportunity for questions and answers on the day. If you wish to put your questions forward in advance, please email these to events@shma.co.uk
Who should attend
HR directors and professionals, business owners and senior managers with responsibility for people management
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