Key factors that determine Brexit exposure
Hardly any company will be in exactly the same situation. But a first, superficial analysis should at the very least entail an analysis of the following questions:
- Is there a structural link between the Norway and the UK, for example are there subsidiaries or branches based in the UK or important shareholdings in UK companies? If that is the case, Brexit could have a myriad of consequences including as regards taxation, and a closer analysis is certainly warranted.
- Is the company established under British law, for example in the form of (British) Limited Liability Partnership? Assuming that the freedom of establishment will end with Brexit, this may require the creation of or a restructuring into a different legal entity.
- Is the UK an important export market for goods or services that your company is selling? While first signals from the UK government indicate that it attempts to maintain "frictionless" trade with the EU (and presumably the EEA), customs and perhaps more importantly non-tariff trade barriers are relatively likely to result from Brexit.
- Does your company rely on British workers or services providers? Free movement of persons will almost certainly end with Brexit, and it is to be expected that it will become harder or administratively more burdensome to hire British workers or buy British services. Existing workers will less likely be affected.
- Is there an important supply chain involving UK companies? New tariffs or non-tariff trade restriction might make it more expensive or delivery less timely.
- Could there be any effects on your intellectual property rights? The validity of trademarks (EU trademarks), designs and possibly copyrights (but not of patents) could be affected by Brexit, and might require a new registration.
- To what extent does your company rely on financial services provided by a UK based actor? The potential loss of passporting rights by British financial institutions might make it impossible to buy such services after Brexit, and even affect existing contracts (though that appears less likely in view of recent British position papers regarding the transition phase).
- Is there a regular transfer of personal data to the UK, including possibly to a cloud service provider based in the UK? From a personal data law point of view, the UK may become a third country as a result of Brexit.
- Are there any important existing contracts with UK based companies or there such contract in the pipeline? A "Brexit due diligence" might be warranted – to determine for example if there any (problematic) reference to EEA/EU law or authorities. Future contracts should probably include a Brexit-clause which would allow a modification or cancellation of contracts in certain particularly adverse circumstances.
Answering these questions might not be straightforward and there are a many more aspects that could only be uncovered in the course of an in-depth and company specific assessment. However, if none of these aspects are particularly relevant for your company, the chances that Brexit will affect it directly are likely rather limited.
Which parts of EEA legislation are particularly relevant to you?
In the addition to this general framework for a first assessment, it is advisable to identify sector specific EEA legislation that is of particular importance to you. With presumably very few exceptions, the UK's "Great Repeal Bill" will incorporate all these laws into British law. However, the UK may at the same time or thereafter introduce certain amendments. Generally speaking, a degree of regulatory divergence is to be expected going forward.
Knowing which parts of EEA law are particularly important to you will enable you to monitor regulatory changes in the UK more easily.
Monitoring the Brexit process remains key
Brexit is and remains a journey into unchartered waters, fraught with economic, legal and importantly also political uncertainty. It is impossible to say how the negotiations between the EU and UK will develop, and what this will eventually mean for Norwegian-British trade and relations. Keeping track of the process at Norwegian, British and European level is in any event highly advisable for any company with a significant degree of Brexit exposure.
Detailed updates and insights on Brexit and in particular its consequences for Norway will be published regularly on this site in the next months.