Hogan Lovells comments on the ECs Contingency Action plan for financial services in relation to Brexit

Commenting on the European Commission’s recently published Contingency Action Plan for financial services in the event of a no-deal Brexit, Hogan Lovells partner Rachel Kent said, “The EU has failed to recognise the concerns raised by the industry in relation to contract continuity in any areas except central clearing of derivatives, central depositary services and certain OTC derivatives. Although these measures are welcome, they don’t go far enough. We don’t know for sure how extensive this problem is and how many contracts are at risk. We hope the EU 27 will continue to consider exemptions in the way that we have been seeing over the last month. These give wider relief in the interests of market stability.”

With regards to the export of goods, trade partner Aline Doussin added, “On the trade side, the no-deal preparation plan confirms what we have been consistently saying to clients – the implementation of customs preparation lies within member states, and it is up to the EU27 Customs authorities to ensure that the relevant Government departments have the capacity to deal with increased paperwork, declarations for imports coming into the EU27 from the UK post-Brexit. This puts Calais, Rotterdam, Dunkirk, and other heavily UK-focussed import points on high priority lists to test-run no-deal capacity planning before March 29.

“It is also very important to remember that in the context of a no-deal, while UK businesses will have to apply customs, excise and VAT procedures to goods traded with the EU, in the same way that already applies for goods traded outside of the EU, their trading partners in the EU27 will also have to apply customs, excise and VAT procedures to goods they receive from UK businesses, in the same way that they do for goods received from outside of the EU. Of note in today's announcement, the Commission is allowing those operators to start applying for authorisations and access to EU27 IT customs systems at competent customs authority in advance of withdrawal date. Those authorisations will become valid on day one post-Brexit.”

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