Impact of the end of the transition period on businesses
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The UK will withdraw from the EU’s internal market and the Customs Union on 31 December 2020 when the transition period ends. This means, among other things, that the free movement of goods and services will end. Changes will take place regardless of the outcome of the negotiations between the UK and the EU.
The goods market, particularly of more complex technical devices, is already very integrated, with extensive movement of raw materials, components, semi-finished and finished products. If products are imported into the EU, they must meet EU conformity criteria. Standardisation is carried out by international and European organisations.
In some product sectors, EU legislation requires that a qualified third party, a so-called notified body, participate in assessing the conformity of products. Notified bodies are conformity assessment bodies that test, inspect and certify products. Notified bodies play an important role in ensuring the safety and conformity of products being introduced to the markets, and in creating trust in the trade sector.
Certificates of conformity issued by UK notified bodies will no longer be accepted in the EU once the UK becomes a third country. If a product is placed on the EU market after the end of the transition period, the certificate must be issued by a body that is an EU notified body. Brexit does not affect products placed on the market before the end of the transition period. Certificates issued by UK notified bodies before the end of the transition period will also be valid after the withdrawal for batches of products that have already been placed on the market. Companies must also take into account a possible need arising from EU product regulation to appoint a new authorised representative established in the EU to replace an authorised representative established in the UK.
In addition, the new UKCA marking requirement will enter into force in the UK on 1 January 2021. For the most part, the UKCA marking must be included in the same products as the current CE marking. However, the UKCA marking is not applicable in Northern Ireland where either the CE marking or the UK(NI) marking is used. A product may bear both CE and UKCA marking if it complies with both EU and UK requirements. For most harmonised products, it is also possible to use the CE marking in the UK until 1 January 2022 if the content of applicable product regulation remains the same in the UK and the EU. Because the rules contain exceptions and sector-specific provisions, a review of the rules by product group is recommended.
Brexit will be a challenge for companies that have operated only within the EU internal market until now. If a company continues to trade with the UK, it must follow customs clearance procedures, which are mandatory in trade with third countries. The role of the company may change from distributor to importer, which will involve new obligations.
Companies should become informed about the requirements related to trade with non-EU countries and the requirements that third-country products must meet before they can be imported into the EU internal market. Different rules may apply to different product groups and sectors.
Further information is available on the website of Finnish Customs and the Finnish Safety and Chemicals Agency Tukes, and with regard to chemicals, on the website of the European Chemicals Agency ECHA.
You can also find more information on the website of the UK Government.
Trade in services
The end of the transition period will also affect trade in services between EU countries and the UK. The UK will become a third country and will be subject to the same rules as trade in services between the EU and other third countries.
As the freedom to provide services will end, the temporary posting of workers to Finland will also end within the framework of the EU’s provision of services.
Right to practise a trade
Any resident of the EEA who is 1) a person, 2) a Finnish entity, or 3) an entity with a registered branch in Finland and domiciled in the EEA, is entitled to practise a trade in Finland. The right to practise a trade is not tied to the nationality of the person.
When the transition period ends on 31 December 2020, companies must assess the impacts that the residence requirements have on the companies’ responsible persons. At least one member of the board of directors, as well as an active partner in limited partnership or general partnership must reside in the EEA.
More information about the impact of Brexit on
- processing of notifications submitted to the Finnish Trade Register
- exemptions due to place of residence
is available on the website of the Finnish Patent and Registration Office.
Issuing residence permits for entrepreneurs is based on consideration to ensure that the intended business activities meet the requirements for profitable business. The alien’s financial resources shall be sufficient with income obtained through gainful employment, business activities or in other ways during the validity period of the residence permit.
Industrial property rights
In the event of the UK’s withdrawal from the EU with no agreement, the EU’s industrial property rights, i.e. the EU trademark and the Community design will no longer be valid in the UK. According to information currently available, the UK is going to take national measures in order to maintain the validity of these rights in the UK. The UK estimates that it will be able to provide protection under the Supplementary Protection Certificates, which are based on EU regulations, in the event of a no-deal Brexit.
More information is available on the website of the Finnish Patent and Registration Office.
Further information on Brexit’s effects in the UK is available on the UK government website.
More information about Brexit’s impact on companies on the European Commission website.
Impacts on EU research and innovation cooperation
After the withdrawal from the EU, participants from the UK have two options to participate in the EU’s research and innovation programme. One option is to negotiate a separate associate membership with the Commission. Another option is to take part in the programme as third-country participants. This would mean that UK participants could participate in the projects funded by the programmes but they could no longer receive funding from the programme.
The European Commission, which is responsible for the implementation of Horizon 2020 and Horizon Europe programmes, will negotiate the framework programme’s associate memberships and provide guidance on the future of ongoing projects.