Effects of Brexit on businesses
The United Kingdom of Great Britain and Northern Ireland (the UK) withdrew from the EU on 31 January 2020. The withdrawal agreement provides for a transition period, which ended on 31 December 2020. This means, among other things, that the free movement of goods and services has ended. From the beginning of 2021, trade between the EU and the UK is subject to the new EU–UK Trade and Cooperation Agreement.
The goods market between the EU and the UK is already very integrated, with extensive movement of raw materials, components, semi-finished and finished products. EU–UK Trade and Cooperation Agreement contains provisions on technical regulations, conformity assessment, standardisation, accreditation, market surveillance and transparency of labelling and regulation. The provisions are broadly in line with the provisions on technical barriers to trade of existing EU trade agreements.
Goods imported from the UK into the EU must continue to conform to EU standards and cannot deviate from the high level of EU standards for the protection of public interest such as the life and health of humans. Conversely, products exported to the UK must conform to UK standards. As a rule, international standards should be used in technical regulation.
Some sectors require that a notified body assess the conformity of the 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 issued by UK notified bodies on the EU conformity of products will no longer be applicable in the EU; instead, certificates on conformity of products must be obtained in the EU. Conversely, a UK notified body must assess the UK conformity of products. However, this does not affect products placed on the market before the end of the transition period. 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.
From 1 January 2021, a new UKCA marking will indicate the UK conformity of products. For the most part, the UKCA marking must be included in the same products as the 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 markings 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 2023 if the content of applicable product regulation remains the same in the UK and the EU. Because the rules contain sector-specific differences, a review of the rules case-by-case is recommended. EU notified bodies cannot use UKCA markings for products and UK notified bodies cannot use CE markings.
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 changes from distributor to importer, which involves 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.
- Website of the Finnish Customs
- Website of the Finnish Safety and Chemicals Agency
- Website of the European Chemicals Agency
- Website of the British Government on Brexit
Trade in services
The free movement of services within the internal market ended after the end of the transitional period on 31 December 2020. As far as services are concerned, the EU–UK Trade and Cooperation Agreement corresponds with a typical modern EU free trade agreement, which means that it does not treat services in the same way as in the internal market. The agreement sets out the conditions under which companies can operate and offer their services within the EU or in the UK. The agreement covers cross-border trade, investments and the entry and residence of persons involved in business activities, as well as a wide range of service and production sectors.
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.
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.
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 must 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
The EU–UK Trade and Cooperation Agreement contains in many respects more comprehensive provisions on copyrights and related rights, trademarks, design rights, patents, the protection of undisclosed information and plant breeders’ rights than the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and other international agreements. The Agreement contains provisions on the civil and administrative enforcement of intellectual property rights and on the cross-border enforcement of TRIPS commitments. It also provides for wide-ranging cooperation in the development, protection and prevention of infringements of intellectual property rights.
The Agreement does not contain provisions on the protection of nationally registered geographical indications from the beginning of 2021. The withdrawal agreement that entered into force at the beginning of February 2020 included provisions on the protection of existing geographical indications.
- Website of the Finnish Patent and Registration Office
- Website of the European Commission
- Website of the UK Government on Brexit’s effets in the UK
In public procurement, the Agreement (Title VI) contains provisions and commitments that go beyond the WTO Agreement on Government Procurement (GPA), and improve the transparency of procurement and streamline procurement procedures. The agreement will ensure greater access of EU companies to UK procurement, for example in specific sectors (energy networks) and in procurement of services (for example, telecommunications). Subsidiaries of EU companies in the UK will receive national treatment in public procurement, including competitive tendering below the GPA thresholds. However, procurement in the defence and security sectors is excluded. Conversely, the EU will improve market access to UK companies below the GPA thresholds.