An overview to Brexit news that have an effect on German-British business relations.
Temporary tariff regime updated
The government has today (8 October) published an update to the UK’s temporary tariff regime if we leave the EU without a deal.
Following the announcement of our temporary tariff regime, we had further discussions with industry and consumer groups. Having listened carefully to their feedback, we will make 3 specific amendments affecting HGVs, bioethanol and clothing.
These are to:
- lower tariffs on HGVs entering the UK market, striking a better balance between the needs of British producers and the SMEs that make up the UK haulage industry, ensuring that crucial fleet replacement programmes that help to lower carbon emissions can continue
- adjust tariffs on bioethanol to retain support for UK producers, as the supply of this fuel is important to critical national infrastructure
- apply tariffs to additional clothing products to ensure the preferential access to the UK market currently available to developing countries (compared to other countries) is maintained
These 3 specific amendments to the tariff rates published in March will enable UK supply chains to continue to operate smoothly and keep prices down for consumers and ensure that we are fully prepared to leave the EU on 31 October whatever the circumstances.
Under the temporary tariff, 88% of total imports to the UK by value would be eligible for tariff free access.
The government would closely monitor the effects of the temporary tariff regime on the UK economy.
Today we are also announcing an exceptional review process, which will come into force on exit day, to make changes to the temporary tariff regime if necessary.
Businesses and consumers will be able to provide feedback on the impact of the temporary tariff regime to the government through an online feedback form. The government will then review the evidence and consider whether any changes need to be made.
A balanced approach
The temporary tariff regime provides a balanced approach on tariffs for both consumers and producers.
British businesses would not pay tariffs on imports into the UK for the majority of goods if we leave the EU without an agreement.
This will mean lower prices in shops for consumers and the opportunity to source the best goods from around the world. For example, honey from New Zealand will see its tariff fall from 17% to zero, grapes from Brazil will reduce from around 15% to zero and other products, such as tennis rackets and wines will no longer face a tariff.
The regime would apply for up to 12 months while a full consultation on a permanent approach to tariffs is undertaken from January, as part of work to develop the UK’s independent trade policy. All businesses, interest groups and consumers will be able to share their views about the permanent tariff regime with the government through this process.
Trade Policy Minister Conor Burns said:
"The UK will be leaving the EU on 31 October and we are working with businesses to ensure the UK is ready to trade from day one."
"Our temporary tariff regime will support the UK economy as a whole, helping British businesses to trade and opening up opportunities for business to import the best goods from around the world at the best prices for British consumers."
"The UK is a free trading nation and British business is in a strong position to compete in an open, free-trading environment."
Source: UK Government
EU Press Release
Brexit: European Commission intensifies preparedness work and outlines contingency action plan in the event of a no deal scenario with the UK
Strasbourg, 13 November 2018
The European Commission has today published detailed information on its ongoing preparedness and contingency work in the event of a no deal scenario in the Article 50 negotiations with the United Kingdom.
- First, the Commission has published a Communication, which outlines a limited number of contingency actions in priority areas that could be implemented if no agreement is reached with the United Kingdom. This follows a first preparedness Communication published on 19 July 2018.
- Secondly, the College of Commissioners has adopted two legislative proposals to amend existing EU law in the area of visas and energy efficiency to take account of the UK's withdrawal. These targeted legislative adaptations are necessary, irrespective of the outcome of the withdrawal negotiations.
- Thirdly, a notice has been published providing extensive information on the changes that will occur – in the event of no deal – for persons travelling between the EU and the UK, and vice versa, after 29 March 2019, or for businesses providing services in relation to such travel. It includes information on such things as border checks and customs controls, driving licences and pet passports, amongst others.
While the European Commission is working hard for a deal, and continues to put citizens first in the negotiations, the UK's withdrawal will undoubtedly cause disruption – for example in business supply chains – whether or not there is a deal. Contingency measures cannot remedy the full effects of this disruption. In the event of a no deal scenario, these disruptions will be even more significant and the speed of preparations would have to increase significantly. Contingency measures in narrowly defined areas may, exceptionally, be needed in order to protect the interests and the integrity of the EU.
Draft Agreement on the withdrawal of the UK from the EU and EURATOM
14 November 2018
This Document serves as a draft of the withdrawal agreement, which was drafted by the UK Government and the European Commission.
UK Guidance on No-deal Brexit
UK government's preparations for a no deal scenario
This document puts the government’s technical notices in context, explaining the current progress in negotiations and the unlikely circumstances in which a no deal scenario might materialise.
It also explains the government’s overarching approach to preparing the UK for this outcome in order to minimise disruption and ensure a smooth and orderly exit in all scenarios.
EU Preparedness Notices
On 29 March 2017, the United Kingdom notified the European Council of its intention to leave the European Union. Unless a ratified withdrawal agreement establishes another date or the European Council, in accordance with Article 50(3) of the Treaty on European Union and in agreement with the United Kingdom, unanimously decides that the Treaties cease to apply at a later date, all Union primary and secondary law will cease to apply to the United Kingdom from 30 March 2019, 00:00h (CET) ('the withdrawal date'). The United Kingdom will then become a third country.
These notices, which aim at preparing citizens and stakeholders for the withdrawal of the United Kingdom, set out the consequences in the following policy areas:
- Communications Networks, Content and Technology
- Employment, Social Affairs and Inclusion
- Financial Services and Capital Markets Union
- Internal Market, Industry, Entrepreneurship and SMEs
- Human Resources
- Justice and Consumers
- Maritime Affairs and Fisheries
- Mobility and Transport
- Health and Food Safety
- Trade/Taxation and Customs Union
Brexit White Paper
THE FUTURE RELATIONSHIP BETWEEN THE UNITED KINGDOM AND THE EUROPEAN UNION
The Government will have delivered on the result of the 2016 referendum – the biggest democratic exercise in this country’s history. And it will have reached a key milestone in its principal mission – to build a country that works for everyone. A country that is stronger, fairer, more united and more outward-looking.
To fulfil that mission, the Government is advancing a detailed proposal for a principled and practical Brexit.
This proposal underpins the vision set out by the Prime Minister at Lancaster House, in Florence, at Mansion House and in Munich, and in doing so addresses questions raised by the EU in the intervening months – explaining how the relationship would work, what benefits it would deliver for both sides, and why it would respect the sovereignty of the UK as well as the autonomy of the EU.
At its core, it is a package that strikes a new and fair balance of rights and obligations.
One that the Government hopes will yield a redoubling of effort in the negotiations, as the UK and the EU work together to develop and agree the framework for the future relationship this autumn.
The Impact of Brexit on German Businesses
DIHK's nationwide survey "Going International 2018" was created with support from 79 Chambers of Commerce and Industry (IHKs) in Germany. More than 2,100 German-based companies with foreign operations took part in the survey, which was conducted in February 2018. The results of this special analysis of Brexit are based on responses from around 900 companies with significant business contacts in the UK, representing 43 percent of total responses.
The impact on German companies of the departure of the United Kingdom (UK) from the European Union (EU) will be overwhelmingly negative in terms of business, investments and trade. The first signs of this impact are already noticeable: since the Brexit decision, trade with the UK has grown at a much less dynamic pace than it would be expected given the economic context. The specific ways in which conditions for business with the UK will change are still entirely unclear for companies. Almost two years after the referendum and one year after the British government gave notification of its withdrawal, the details are still unclear. A possible transitional phase could mitigate the negative consequences, but at the same time threatens to prolong the uncertainty. But some companies are already planning to shift their investments, primarily to other EU countries.
Brexit Business Check-List
The UK’s impending departure from the European Union will bring change for businesses of every size and sector.
While some companies are already planning for the challenges and opportunities ahead, Chambers of Commerce believe that all firms – not just those directly and immediately affected – should be undertaking a Brexit 'health check', and a broader test of existing business plans. Time spent thinking through the changes that Brexit may bring to your firm could yield real dividends in future.
While the final settlement between the UK and the European Union is still to be negotiated, there are steps that businesses of all sizes can take now to start planning ahead. Recent Chamber surveys have asked:
- Have you / your management team devoted time to considering the potential consequences of Brexit – direct or indirect – on your businesses?
- If you have one, have you consulted with your Board of Directors on Brexit – or scheduled an opportunity to do so?
- Have you mapped your supplier and customer base – and considered how changes in the UK-EU trade relationship could affect them?
This checklist has been prepared in response to the findings, which suggest that a significant number of firms are either watching and waiting – or taking no action at all. We hope you find it useful as a basis for business planning at both operational and Board level.
Northern EU Chambers
An alliance of northern European Coastal Chambers accounting for 70% of EU-UK trade urge British and EU negotiators to create clarity on a future trade friendly relationship as soon as possible now that sufficient progress has been made.
The Federation of Belgian Chambers of Commerce represented by Voka - Flanders Chamber of Commerce and BECI - Brussels Chamber of Commerce, the British Chambers of Commerce, Chambers Ireland, the Danish Chamber of Commerce, the French Chamber of Commerce and Industry, the German Chambers of Commerce and Industry and the Netherlands-British Chamber of Commerce have today handed over a joint statement to the British and EU Brexit negotiators. They urge the British and EU negotiators to strive for a breakthrough in the first phase of the negotiations to ensure talks on transition and the future EU-UK trade relationship can start as soon as possible.
Countries from the northern European coastal area have always maintained exceptionally good trade ties. Trade between the United Kingdom and the other 6 European Union countries in this area amounted to 344bn EUR in 2016, accounting for 70% of the total EU-UK trade. The English Channel, located in the middle of the North Sea area, is for example the world's busiest shipping lane, with more than 500 vessels passing through the strait on a daily basis, as well as being a key transport link between the EU and Ireland. A sudden and chaotic disruption of trade in this region would have a substantial economic impact that should not be underestimated.
The northern European Coastal Chambers were therefore pleased to learn last Friday that sufficient progress has been made in the first phase of the Brexit negotiations. The Northern European Coastal Chambers now call on the United Kingdom and the European Union to move on to discussing the outlines of a future trade friendly EU-UK relationship that fully respects all aspects of the integrity of the Single Market as soon as possible.
The northern European Coastal Chambers also believe a realistic transition period is needed to provide time for companies to adapt to the new EU-UK trading relationship. A status-quo like transition period - announced with sufficient notice - ensuring the UK remains in the customs union and the Single Market for the duration of the transition period, with all the appropriate rights and obligations, would be best to provide business with the highest possible degree of certainty and predictability.
German-British Business Community
Results of the 2017 Brexit Survey of the members of the German-British Business Community
More than 60% of the members of the German-British business community think the likely effect of Brexit on future investments by their companies in the UK will be negative.
30% even think their decrease in investment will be greater than 10%. By contrast only one in twenty (5%) think Brexit will have a positive impact on their future investments in the UK.
For a full analysis of the survey, please click here.
Ireland, Germany & the EU
September 2017 - Meeting the Brexit Challenge
Ireland is the only EU member state to share a land border with the UK - where Northern Ireland meets the Republic of Ireland.
There is free movement of people and goods across this border. 30,000 people cross the border between Ireland and Northern Ireland every day to work or visit family and friends.
The German- Irish Chamber of Industry & Commerce has published a report on Ireland's connection with Brexit, with a focus on Northern Ireland and the impact Brexit will have on this section of the United Kingdom.
For German companies with links to businesses in Northern Ireland, it is important to stay abreast of developments in this area.
Information for EU Citizens
From the European Commission:
What are your EU citizenship rights?
"As a national of the United Kingdom or any other EU country – you are automatically also an EU citizen."
From the UK Government:
Status of EU citizens in the UK: what you need to know
"There is no need for EU citizens living in the UK to do anything now. There will be no change to the status of EU citizens living in the UK while the UK remains in the EU."
Post-referendum German-British business community
December 2016 - The German-British business community hopes for a soft Brexit, but majority expects a hard Brexit
A majority of companies of the German-British business community (56%) believe that in the medium term Brexit will be negative for their business, according to a survey by the German-British Chamber of Industry & Commerce in 2016.
Are you ready for Brexit?
On 30 March 2019, Britain will leave the European Union. This is definite. It is very likely, however, that there will be a transition phase after the exit which will end on 31 December 2020. Although Great Britain will be left out in political terms during this period, everything will remain the same economically due to its membership of the Customs Union and the Single Market. After the transition phase, the United Kingdom will become a third country. Whether it will be possible to conclude a free trade agreement between the EU-27 and the United Kingdom is uncertain. Should an agreement not be reached with a follow-up solution, trade between Great Britain and the EU would take place under WTO rules only.
It is already clear right now that companies need to prepare for changes. There will be a whole range of changes for the worse, especially in relation to the movement of goods. The preparation for Brexit at companies can be extensive – depending, among other things, on the future involvement in Great Britain, the size of the company and the sector. The enclosed checklist is intended to show where companies need to adapt and adjust. We will gradually expand upon and update the topics in the light of the results of the negotiations. For further questions, companies can contact their local chamber of industry and commerce.
Government outlines no deal arrangements for EU citizens
In the event of no deal, EU citizens will be able to enter the UK to visit, work or study after 29 March 2019. For stays longer than 3 months, European Temporary Leave to Remain will be required.
Home Secretary Sajid Javid has today (28 January 2019) set out provisions for EU citizens coming to the UK after EU exit in the event of a no deal.
If Britain leaves the EU without agreeing a deal, the government will seek to end free movement as soon as possible and has introduced an Immigration Bill to achieve this. For a transitional period only, EEA citizens and their family members, including Swiss citizens, will still be able to come to the UK for visits, work or study and they will be able to enter the UK as they do now.
However, to stay longer than 3 months they will need to apply for permission and receive European Temporary Leave to Remain, which is valid for a further 3 years.
EU citizens wishing to stay for longer than 3 years will need to make a further application under the new skills-based future immigration system, which will begin from 2021.
Home Secretary Sajid Javid said:
"If we leave the EU without a deal we will continue to deliver on the referendum result and end free movement once and for all – giving us full control of our borders for the first time in decades.
"However, we need to take a practical approach and minimise disruption to ensure the UK stays open for business. That is why we will introduce time-limited transitional arrangements and grant EU citizens coming after March 29 temporary leave.
"Let me be clear. This policy does not apply to those here before exit day, whose rights to live and work will be protected by the EU Settlement Scheme. We want them to stay and value them hugely."
The information set out today also confirms that if there is no deal:
- EU citizens arriving in the UK who wish to stay longer than 3 months and apply for European Temporary Leave to Remain will be subject to identity, criminality and security checks before being granted permission to stay for three years
- non-EU family members who wish to accompany an EU citizen under these arrangements will need to apply in advance for a family permit
- EU citizens will be able to enter and leave the UK as they do now, using e-gates when travelling on a biometric passport
- the initial 3 months’ leave to enter for EU citizens will be free of charge but applications for European Temporary Leave to Remain will be paid for. Fees will be set out at a later date
- Irish citizens will not need to apply for European Temporary Leave to Remain and will continue to have the right to enter and live in the UK under the Common Travel Area
The Home Secretary has set out plans for a new single skills-based immigration system which will operate from 2021. It will enable employers to attract the skills they need from around the world, while ensuring net migration is reduced to sustainable levels.