Brexit Update – A collection of recent news (18 – 24 November 2017)

November 24, 2017

According to reports, Ireland has emerged as an unexpectedly tough hurdle to advancing stalled Brexit talks next month, prompting Dublin to warn that Britain isn’t doing enough to prevent the return of customs checks on the island and could potentially reignite sectarian violence. Downing Street still believes the Irish border problem can be resolved by December, despite Dublin’s threat to veto Brexit trade talks over the issue regardless of Theresa May’s £40bn divorce offer. Ireland fired a warning shot this week by suggesting May’s enhanced financial offer to the EU was not enough on its own to secure the trade talks sought by the UK without guarantees that Brexit will not lead to a hard border.

British and EU negotiators are moving closer to thrashing out a deal over the so-called ‘Brexit bill’ as optimism rises on both sides of a deal in December that will open the door to trade talks. While sources on both sides confirmed “we are not there yet”, the contours of a deal over the so-called Brexit bill appear to be emerging, in which the UK would implicitly commit at least €40bn – and potentially more –but without agreeing to a figure in public.

Chancellor Philip Hammond has sought to head off claims by Eurosceptic Conservative MPs that he has failed to adequately prepare for Britain’s departure from the EU by committing an extra £3bn to the UK’s Brexit Planning. The UK chancellor said he would allocate an additional £1.5bn in each of the next two financial years for Brexit preparations – and that he was ready to spend more cash if it were needed.

The EU has released a Notice to Stakeholders that warns EU Company Law will no longer apply in the UK after Brexit. Brexit disruption to the channel tunnel will hit EU businesses harder than British ones, Eurotunnel’s chief executive told European lawmakers. European Medicine Agency will move to Amsterdam after Brexit. The costs of the EMA relocation are reported to be in the region of EUR 580 million and how they will be covered in the final “divorce bill” is yet to be agreed. The EU has banned UK cities from hosting the European Capital of Culture after Brexit despite the scheme being open to cities outside the bloc.

EU Brexit negotiators are taking a tough stance on aviation that would dramatically restrict UK airline operating rights unless Britain follows the bloc’s laws and courts, according to leaked planning documents. The EU’s 27 remaining member states have begun preparing for talks on future EU-UK relations, outlining models of co-operation in aviation, fisheries and research that strictly adhere to precedents in existing arrangements with non-EU countries. Airbus has told MPs that Britain risks losing the “crown jewels” of its aviation industry to China as a result of Brexit, putting up to 7,000 wing-manufacturing jobs in Wales at risk. The head of the company’s UK operations warned the business select committee that the threat of new customs bureaucracy and reduced employee mobility could deter long-term investment and accelerate a shift to Asia.

The City of London has said the UK government needs to do more to protect Britain’s legal services sector after Brexit if the country is to remain the world’s “jurisdiction of choice”. TheCityUK, which lobbies for financial and professional services firms, said that Brexit poses a threat to the primacy of English law to govern international cross-border trade and investment. The lobby group said in a report that the government should therefore plan to join, or incorporate into UK law, a host of international agreements governing contracts and various dispute resolution mechanisms “as soon as possible”.

The Taxation (Cross-border Trade) Bill, previously known as the Customs Bill, has been published. The Bill contains provisions to permit the UK to set and levy customs outside the EU, impose trade remedies and create a unilateral trade-preference scheme. After Brexit, customs declarations to UK Customs are expected to increase five-fold to 255 million annually and the UK companies making declarations to double to over 270,000. But only 0.2% of those traders have AEO status – ten times fewer than Germany. Without this, traders will not have access to key customs facilitations but will face the full weight of customs requirements. According to reports, companies need to apply for certification as an AEO.

 

Important Dates Ahead

  • October-December 2017: divorce principles should be agreed
  • December 2017: EU Council meeting to re-assess the progress of the Brexit negotiations and whether second stage of negotiations can commence
  • October 2018: Bernier’s deadline to agree exit deal and ratification process should begin
  • 29 March 2019: Brexit negotiations end and UK formally exits the EU
  • 30 March 2019 – December 2020: Transitional Period (TBC)