Contrast Between the UK & the EU Preparations for Brexit

Porcinus, Going Postal

The debacle over BREXIT within the UK Parliament, is a prime example of the failure of the selection process for Members of Parliament to weed out people who have no relevant experience.

The Prime Minister has no military, sporting, diplomatic, legal, financial, manufacturing, managerial, teaching, commercial, negotiating, contractual or medical qualifications, experience, or training in any of these matters. She is Prime Minister by default and what a fault.

The preparation for the UK leaving the EU, carried out over the past two years, has been an abattoir of diplomacy, the Prime Minister has ignored her appointed Minister, visited various Heads of the EU 27 completely independently of her Cabinet and presented them with a deal which none of them knew about.

For anyone studying for an MBA or similar, a Case Study based on the UK Prime Minister’s modus operandi in negotiations, would guarantee a “gamma minus“ or alternatively, for a Drama student, a prize winning script for an episode of Mr Bean.

Contrast the UK approach with that of the EU who on the 19th December 2018 presented the following:

Communication of 19 December 2018 : “Preparing for the withdrawal of the United Kingdom from the European Union on 30 March 2019: Implementing the Commission’s Contingency Action Plan”

Three documents available in pdf for the world to download at its leisure, including –

“Questions and Answers: the consequences of the United Kingdom leaving the European Union without a ratified Withdrawal Agreement (no deal Brexit).”

This memo has been totally ignored by the UK Media and Members of the UK Parliament.

What does it say?

Below is a précis of the major points, but the bottom line is that in the main, the UK & EU have 12 months to sort out the major areas such as UK/EU transport of goods by lorry, arising from a No Deal (WTO BREXIT).

The documents prepared by the EU do not present or propose, the “Cliff Edge, Crash Out, Train Smash, We are in the Shit” No Deal beloved by the BBC and Sly.

Citizens & social security

What will be the legal situation of UK nationals resident in the EU in case of no deal? Can they continue to work in their Member State of residence and travel freely across the whole EU? Will they need specific documents and can they apply already for those?

The Commission has called upon Member States to act along the following lines regarding the rights of UK nationals to stay and work in EU27 Member States in case of no deal:

Take measures so that all UK nationals legally residing in a Member State on 29 March 2019 will continue to be considered as legal residents of that Member State without interruption;

Stand ready to issue residence permits to the UK nationals concerned as evidence of their legal stay and right to work;

Take all necessary legislative and administrative measures to be able to issue temporary residence documents by the withdrawal date, and to process applications for definitive residence permits under the uniform format by the end of 2019.

In the second Communication on Brexit preparedness from 13 November 2018, the Commission had:

Called upon Member States to include the periods of legal residence in an EU27 Member State prior to the withdrawal when assessing if a UK national fulfills the 5 years of residence condition; Recommended that Member States accept applications for residence permits that are submitted in advance of the UK’s date of withdrawal.

In addition, UK nationals who are family members of EU citizens having exercised the right to free movement will enjoy the right to move and reside in an EU Member State, and may receive a “Residence card of a family member of a Union citizen”. Finally, UK nationals resident in one of the EU Schengen states, who hold a residence permit, can travel freely in the Schengen area for short stays (up to 90 days outside the country of residence).

The Commission has called for Pension and Insurance rights to be protected within the UK for EU citizens and vice versa.

Transport

Aviation

Will there still be plane connections between the UK and the EU in case of no deal?

In case of no deal, the Commission is proposing that “point-to-point” flight connections, i.e. connections from the territory of the United Kingdom to the territory of the EU27, are temporarily allowed on the basis of a unilateral measure. This measure will enter into force in case of no deal, if the United Kingdom reciprocates, and last until 30 March 2020. This is to avoid a full interruption of traffic between the EU and the United Kingdom.

Road Haulage

Will trucks be able to continue carrying goods between the UK and the EU if the UK leaves in case of no deal? Is there a restriction in numbers?

The Commission is proposing that operators from the United Kingdom are temporarily allowed to carry goods into the Union, provided the United Kingdom confers equivalent rights to Union road haulage operators and subject to conditions ensuring fair competition. This measure shall enter into force in case of no deal, and cease to have effect on 31 December 2019.

Passenger Cars

Will passenger cars be able to drive between the EU and the UK if the UK leaves without a deal? Is there a restriction in numbers?

Passenger cars registered in the United Kingdom will be allowed to drive to the European Union and vice-versa. There is no restriction in numbers. The only condition is that the vehicles (and drivers) comply with the relevant rules of the 1968 Vienna Convention on Road Traffic (or the 1949 Geneva Convention on Road Traffic for vehicles and drivers from Ireland, Cyprus, Malta and Spain).

Rail transport

Will train services continue between the United Kingdom and the European Union in a no-deal scenario?

To continue operating in the EU, train operators need an EU operating licence and an EU safety certificate, as well as train drivers licensed in an EU Member State. Currently its operating licence and safety certificate, as well as licenses held by some of their drivers, are issued by the UK authorities and will cease to be valid in the EU27 as of the withdrawal date in a no-deal scenario.

The Commission’s services have been in contact with operators on the need to fulfill the above mentioned requirements and to speed up the process in order to ensure the continuity of the service between the United Kingdom and the European Union in a no-deal scenario. This work will need to be completed rapidly to ensure the service continues running without significant interruption.

Financial Services

What exactly is the Commission proposing in the area of financial services?

After examining the risks linked to a no deal scenario in the financial sector, and taking into account the views of the European Central Bank and the European Supervisory Authorities, the Commission has concluded that only a limited number of contingency measures are necessary to safeguard financial stability in the EU27.

These measures mitigate financial stability risks only in those areas where preparedness actions from market operators alone are clearly insufficient to address these risks by the withdrawal date. This is why the Commission has adopted today two temporary and conditional equivalence decisions prolonging the access of EU firms to UK central clearing counter-parties (CCPs) 9 and UK central security depositories (CSDs) 10, for 12 and 24 months respectively.

In addition, the Commission is amending two Delegated Regulations in order to preserve the regulatory treatment of derivative contracts currently exempted from the clearing obligation and the bilateral margin requirements that EU law imposes, when such contracts are transferred from the UK to the EU27. Such flexibility would be granted for a period of 12 months following the withdrawal date.

Will banks and insurers with headquarters in the UK be able to continue to provide services in the EU in case of no deal?

In case of no deal, entities headquartered in the UK providing banking services will no longer be allowed to provide services in the EU on the basis of their current authorisations.

Similarly, in case of no deal, UK insurance undertakings will no longer be allowed to provide services in the EU, including through online sales, on the basis of their current authorisations.

Financial institutions that wish to provide banking or insurance services in the European Union should take all necessary steps to be properly authorised on withdrawal date, including by

Establishing a presence in the EU27

Customs

In case of no deal, will goods coming from the UK to the EU/EU to the UK be considered as imports/exports as of 30 March 2019?

As of 30 March 2019, goods which are brought into the customs territory of the European Union from the United Kingdom or are to be taken out of that territory for transport to the United Kingdom, are subject to customs supervision and may be subject to customs controls in accordance with the Union Customs Code.

This implies inter alia that customs formalities apply, declarations have to be lodged and customs authorities may require guarantees for potential or existing customs debts.

Taxation

In case of no deal, will there be any tax refunds on goods I purchased in the United Kingdom and brought back to the European Union?

In case of no deal, the UK will decide whether it will allow tax refunds for goods that are exported from its territory by EU citizens as of withdrawal date.

What rules will apply to EU-UK trade in terms of VAT in case of no deal?

In case of no deal, existing EU legislation with regard to VAT will continue to apply within the European Union.

As of withdrawal date, the rules of the EU VAT Directives relating to third countries, will apply in the relations with the UK.

This means that, in case of no deal, VAT will be due at the importation in the EU.

Goods will be exempt from VAT if they are dispatched or transported to a destination outside the European Union, including, therefore, the UK.

Conclusions

David Cameron went to Brussels to negotiate “Special Status” for the UK with the EU, he came back empty handed, apart from being adorned in “Canteen Medals” from the gracious table of Herr Junker.

Cameron’s successor, is a Prime Minister who has plumbed new depths of incompetency and whose Ministers can only be following her out of curiosity, a bit like an earth of foxes watching the death throes of a headless chicken.

Mrs May has presented what she calls a “Deal” the terms of which she has negotiated with the aid of selected Civil Servants and from which she will not be diverted. Her tenacity gives rise to praise from her few supporters and claims of stupidity from the majority.

It was disclosed earlier this week under a FOI request; that the Government has commissioned a number of consultancies at a cost of over £40 Million, to advise Government Departments on BREXIT matters. A cynic may ask how many Ministers who stand to lose their seats at the next election, will see these contracts as insurance policies for life outside of Parliament (retaining of course the good old HOC Access Pass).

The “Deal” includes amongst other things; payment of £39 Billion, an open ended commitment to all or part of the Customs Union, the possibility of a further payment to the EU should the new EU budget demand it and no representation at the EU during the “transition period”.

Fortunately, The EU (Withdrawal) Bill received Royal Assent on 26th June 2018 and became an Act, it includes repealing the 1972 European Communities Act on “exit day”, defined as 29 March 2019 (at 11 pm). It would therefore require a Statute to repeal this Statute, as confirmed by the Speaker to Mr Bill Cash MP, in Parliament this week.

The contrast with the measured approach of the EU outlined in their “No Deal” preparations, could not be greater and this “Contemptuous Government” should be ashamed.

Reference:

European Commission. Commission and its priorities. Policies, information and services
 

© Porcinus 2018
 

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