Brexit will require a considered approach to help reduce impact and large-scale disruption to trade. Current trade volume between the EU and the United Kingdom is reported to be in the region of 1196 billion euros; there is, therefore, a need for a clear checklist for companies to work to with regards to changes in laws, regulations, taxes and other legal conditions.

We've have taken a look at the impact that Brexit will have on both companies with operations within the UK (especially by operating subsidiaries) and also companies who trade with the UK. From this, we've provided a framework of 'checks' to conduct, which will ensure you reduce the impact and risk that Brexit could have after Britain leaves the EU.

Use some of the examples below to review your current plans and objectives for Brexit:

If you have operations in the UK (especially by operating subsidiaries)

  • Check the legal form of your operation, especially whether liability/tax shield effects fall away
  • Check whether you would want to transfer the operations into the EU; if not check your internal processes, policies and procedures to ensure they are fit under UK law. Also review any acquired assets and contracts, to check whether they can be transferred within the group.
  • Check the terms of any joint venture or partnership agreements or the like (are any agreements dependent on the UK being part of the EU?)
  • Check the need of your expatriates in the UK and find solutions and check the treatment of your local staff (e.g. visa, social security contributions, work permits)
  • If your cost base is mainly in the UK, where possible, try to agree funding in sterling rather than dollars or euros to protect against possible income fluctuations (currency exchange risks)
  • Identify EU regulations which you apply and which might fall away or be replaced or changed (e.g. banking passport regulations or other operational licenses)
  • Communicate with your key customers
  • Review your transportation and logistics arrangements
  • File a UK trade mark application in parallel with any new EU trade mark application
  • Care about community designs whether registered in UK or not

If you are trading with the UK

  • Check alternatives to hedge currency exchange losses and who is bearing the costs of hedging
  • Check your trading agreements and identify any issues to be negotiated in case of Brexit (e.g. who is bearing additional costs and applicable law)
  • Identify any impacts of public financing and cover (e.g. Hermes) and insurances
  • Review financial covenants; if you are worried about how Brexit could affect your balance sheet, review any finance agreements and establish whether any dip in performance could result in you having to make a repayment or terminate your contract. Think about whether Brexit and any resulting impact on your trading performance could trigger warranty claims or affect earn-out mechanisms.
  • Identify EU regulations which you apply and which might fall away or be replaced or changed
  • Communicate with your key customers
  • Review your arrangements on force majeure clauses and reasons for extraordinary termination
  • Prepare contingency plans for tariffs and export controls on the sales of goods and services to EU countries. This could involve amending the wording of clauses to state that prices are exclusive of VAT and any applicable tariffs.
  • Check effects of changes in taxation

For more information on how Fieldfisher can advise your organisation, please contact Suzanne Ruckert or another member of the Brexit team.