Matheson’s Deirdre Kilroy outlines key legal tips for Irish businesses trading with the UK online and what they will need to be aware of ahead of 1 January 2021.
The European Union and the United Kingdom are attempting to conclude a trade deal by the end of 2020. Even if a deal is struck, the UK’s departure will have serious consequences for online traders in goods from 1 January 2021 onwards.
Online businesses in Ireland doing business in the UK will need to prepare in advance for these unavoidable changes.
“Act now to seek out information that you will need to take account of the changes that impact trading in the UK from next year”
We set out some tips to consider when buying or selling products in the UK online.
Check Your Importer Obligations
From 1 January 2021 Irish businesses that currently buy goods from the UK to sell online in Ireland, or elsewhere in the EU, will become importers of the goods. Certain legal responsibilities attach to being the first entity to place goods in the market in EU, so you will need to ensure that these rules are adhered to. EU customs rules will apply to all goods which are brought into the EU from the United Kingdom; familiarise yourself with those that apply to those products that you import.
Establish Your Export Obligations
As of 1 January 2021, if you export goods to the United Kingdom, you will become an exporter of goods, subject to the UK laws applicable to importers of those products. Even if a deal can be reached on tariffs and quotas on products traded between the EU and the United Kingdom, goods will be subject to any applicable UK regulatory and compliance requirements for goods sold in the UK. In certain key areas the UK has already indicated an intention to adopt a different approach to the EU on checks, controls and requirements on imports, including for safety, health and other regulatory or public policy purposes. Make sure you keep track on how new UK laws impact on your exports to the UK and how they differ from your EU sales.
Delivery of Goods bought in or shipped to the UK
Free movement of goods and road transport operators across UK borders with the EU will become more complicated. From the beginning of 2021 road UK transport operators will no longer have automatic access rights to the UK, and will need to comply with formalities when crossing the UK-EU border. Consider longer delivery times and factor in any additional formalities to be completed when updating your supply chain and logistics commitments to take account of Brexit.
Investigate what Certificates, Authorisations, Markings or Labels need to be Changed
If you buy goods for which UK authorities have issued marketing authorisations, approvals or certifications next year these will not be sufficient when placing products for sale in EU. Act in good time to transfer certificates and authorisations from any UK-based body or authority to one based in the EU, or to seek new ones within the EU. Markings or labelling of goods referring to statutory bodies or persons in the United Kingdom will not comply with EU labelling requirements after Brexit. Make sure the goods you import from the UK can be distributed the way that you intend.
UK Consumers will no longer be European Consumers
Consumer contracts are generally governed by the law of the country where the consumer has his or her habitual residence. Consumers in the UK will no longer be in the European Union and so UK consumer protection law will need to be monitored carefully by Irish traders to ensure that the UK consumer requirements are met.
Facilitating Flows of Personal Data
After Brexit the transmission of personal data from the EU to the UK will be a data transfer to a third country. Transfers of personal data to third countries are regulated by the General Data Protection Regulation 2016/679 (the GDPR) and the Law Enforcement Directive 2016/680. Ask yourself if you process data about living individuals and if the data is processed on a cross-border basis in your UK business; if the answer is “yes” you will need to take steps to facilitate the continued processing of that data next year.
Protect Your Branding and IP
You may protect the intellectual property rights in your products through a combination of trade marks, product design rights and geographical indications using EU unitary intellectual property rights (ie rights that apply across the EU). You will need to review your intellectual property portfolio as EU rights will have a reduced territorial scope, and you may need to take additional steps to ensure continued protection of your intellectual property rights in the UK market and when protecting new rights in the future.
Loss of P2B Protection
This year a useful Regulation (EU) 2019/115010 came into force, bringing in new rules applicable to business users and corporate website users that use online intermediation services and online search engines. This Regulation prohibits certain unfair commercial practices, introduces alternative dispute settlement procedures as well as a number of other protections for businesses in Europe that use online platforms for the sale of goods. After Brexit if you are established in the EU but exclusively offer goods or services to consumers located the United Kingdom these protections may not be available to you.
Loss of Net Neutrality Benefits
It is not often to the forefront of business leaders discussions and transactions, but Regulation (EU) 2015/2120 on open internet access is an important law in terms of European online business activity. It provides for common rules on equal and non-discriminatory treatment of traffic in the provision of internet access services, and also provides for related end-users’ rights. These rules will not apply after Brexit occurs, and it is uncertain what impact that development will have on EU businesses trading in the UK online. It is a good idea to take note of any UK developments likely to impact on traffic to EU websites or online service provides the information society service provider has established.
Update Distribution, Agency, Customer and Supply Agreements
The changes listed above will all have knock on implications for the contractual relationships in your goods supply chain and online businesses. You should model and anticipate the changes for supply chain relationships before 1 January 2021. Update your standard terms of business, and have conversations with key suppliers and customers, so that you can agree on appropriate changes, and document them in a timely way with the aim of making your transition to your post-Brexit business an orderly one.
The laws facilitating the cross-border recognition and enforcement of judgments in the EU and in the United Kingdom cease at the end of the year. It will not be possible to as quickly or as efficiently enforce judgments that are handed down by a UK court as it is today in the EU. Consider dealing with your business in the UK in a contract exclusively dealing with the UK business, and consider keeping all matters connected with trade in the EU in a contract governed by the laws of a EU Member State country. Consider carefully whether you should continue any choice of a UK jurisdiction in your commercial contracts.
Although the United Kingdom left the European Union on 31 January 2020., the jointly agreed transition period expires on 31 December 2020.
Until then EU law continues to apply in the United Kingdom. Act now to seek out information that you will need to take account of the changes that impact trading in the UK from next year, which will become a third country outside of the EU structure.
Deirdre Kilroy (Deirdre.firstname.lastname@example.org) is a partner in Matheson’s Technology & Innovation Team. Matheson’s work includes supporting businesses trading from and into the UK, Ireland, Europe and the rest of the world.
Published: 7 October, 2020