The transition period for the UK’s exit from the European Union ended on 31 December 2020, and the UK now enters a new era outside of the EU. The deal made between the UK and EU, including the Trade and Co-operation Agreement agreed on 24 December, will have far reaching consequences for individuals and organisations, whether or not they directly work with Europe. The UK has implemented the deal agreed with the EU, into domestic law, in the form of the European Union (Future Relationship) Act 2020. This builds on changes implemented via the earlier European Union (Withdrawal Agreement) Act 2020 and its 2018 predecessor. It is also important to note that a raft of Brexit-related statutory instruments has been passed and more continue to be passed. These relate mostly to industry-specific changes, or changes in particular areas of law, resulting from the UK’s exit from the EU.
This information hub has been put together by our specialists to support and assist in building a better understanding of what the arrangements mean for you. Our briefing notes below highlight key Brexit-related changes that may be of particular relevance to our clients. We also regularly post articles and news relating to this ever-changing area, and you will find easy access to all Brexit-related articles posted on our website, via the links at the bottom of this page.
Key considerations at the end of the Brexit transition period:
Changes to existing and future contracts
The impact on contractors and supply chains
The impact on costs of imported goods and materials
The needs of EU citizens in your workforce
The use and processing of personal data
New public procurement notice requirements
The new subsidy control regime
We are regularly adding updates here, please watch this space or sign up to our newsletter for more information.
EU State aid rules no longer apply to funding and other forms of support measures granted to business by UK public authorities.
The new provisions are set out in Chapter 3 of Title XI of the Trade and Cooperation Agreement (the TCA). The UK’s European Union (Future Relationship) Act 2000 incorporated the TCA into UK domestic law (by virtue of s29).
It is currently unclear when specific regulations will be introduced that create the required additional domestic law. There is also no indication from the UK Government as to who the ‘operationally independent authority or body with an appropriate role’ (as required by the TCA) will be. Additionally, a centralised database has not yet been launched by BEIS (it has until July to do so).
However, in due course we may expect:
- Any independent authority to exercise ex ante approval functions;
- A domestic safe harbour / block exemption regime;
- Detailed secondary legislation implementing the TCA requirements; and
- BEIS-published technical guidance.
Similarities between the regimes
There are similarities between the EU State aid rules and the new Subsidy Control regime, so despite the introduction of new definitions the concepts remain familiar. For example, Article 3.4 of the TCA provides 6 key principles for the granting of a subsidy:
- It must pursue a specific public body objective to remedy an identified market failure or to address an equity rationale such as social difficulties or distributional concerns (“the objective”).
- It must be proportionate and limited to what is necessary to achieve the objective.
- It must be designed to bring about a change in economic behaviour of the beneficiary that is conducive to achieving the objective and that would not be achieved in the absence of subsidies being provided.
- It must not normally compensate for the costs the beneficiary would have funded in the absence of any subsidiary.
- It must be an appropriate policy instrument to achieve a public policy objective and that objective cannot be achieved through other less distortive means.
- Its positive contributions to achieving the objective must outweigh any negative effects, in particular the negative effects on trade or investment between the parties.
Likewise, a de minims threshold remains, but has been increased from €200k to €380k.
Differences between the regimes
Of course, there are differences between the regimes, such as:
- In respect of terminology, ‘Subsidy’ replaces ‘State aid’ in recognition of the fact that the UK is no longer in the EU Single Market (albeit the terms are defined similarly, meaning what would have been considered ‘aid’ is now likely to be considered a subsidy).
- In respect of information rights, Article 3.7(1) of the TCA imposes an obligation on public bodies to publish within 6 months of the grant of the subsidy:
- The legal basis, policy objective and purpose of the subsidy;
- The name of the recipient;
- The date of the grant, its duration, and any other limits attached;
- The amount or the budgeted amount.
- Article 3.7(5) of the TCA allows an interested party to request information from a public body in relation to the granting of a subsidy, with a view to a potential claim, and public bodies must respond with such information within 28 days of the written request.
- The TCA mandates that the UK and EU ensure that their respective courts are able to review a subsidy decision and impose remedies including in relation to the subsidy – its suspension, prohibition or order of repayment, damages, or other action. Presently, judicial review appears to be the only route for challenge / complaint for unlawful public subsidy in the UK.
- Recovery of unlawful subsidies is subject to time limits. A claim must be brought within:
- 1 month of transparency publication as per Article 3.7(1) of the TCA; or
- 1 month of information being provided if an information request is made as per Article 3.5 of the TCA.
Employees from EU member states should check whether they need to apply to the settlement scheme. To do this, they should:
- Check whether they need to apply to the EU Settlement Scheme
- Find out what status they have as it may differ depending on their circumstances
- Check what information they’ll need to apply
- Submit an application.
Some EU citizens may be able to stay in the UK without applying - for example, Irish citizens or those with indefinite leave to remain.
The deadline for applying for settled status is 30 June 2021.
It is important that you check that key workers who are EU citizens have the right to remain in the UK post-Brexit to ensure you able to retain their talent for the future.
The Public Procurement Regulations (Amendment) (EU Exit) Regulations 2020 (SI 2020 No. 1319) were made on 19th November 2020, in readiness for the UK’s departure from the EU.
This new legislation revokes and replaces The Public Procurement (EU Exit) Regulations 2019 and The Public Procurement (EU Exit) (No.2) Regulations 2019.
IP Completion Day is 11pm on 31st December 2020.
What has changed?
The following terminology will be amended:
Official Journal of the European Union
UK e-notification service
The United Kingdom
The UK’s e-notification service ‘Find a Tender Service’ replaces the OJEU in the UK.
Financial thresholds are now shown in £ rather than €.
What effect will the new Regulations have on existing procurements?
The Schedule to the 2020 Regulations provides for procedures that are ongoing on IP Completion Day to continue.
The Schedule is divided into 4 parts:
- Part 1 – Interpretation
- Part 2 – Procurements Pending etc. On IP Completion Day
- Part 3 – Procurements Commenced on IP Completion Day
- Part 4 – Procurements Commenced 12 Months after IP Completion Day
Procurement procedures which are ongoing will not be subject to any substantive changes.
What effect will the new Regulations have on future procurements?
Procurements commenced after the IP Completion Date will of course be bound by the relevant procurement regulations as amended by the 2020 Regulations.
The Cabinet Office’s updated guidance for public sector procurement from 1 January 2021 provides further detail.
Find a Tender Service (FTS) Brexit Hub Information Briefing Note
- Practical changes to public procurement
- Since 1 January 2021, a new e-notification service called Find a Tender Service (FTS) is used to post and view public sector procurement notices in the UK rather than OJEU. FTS is now live. See Find a Tender.
- The introduction of FTS and the cessation of the use of OJEU/TED does not affect any legal or policy requirement to advertise on any other platforms such as Contracts Finder and MOD Defence Contracts Online or Devolved Administration systems such as Public Contracts Scotland, Sell2Wales, eSourcing NI and eTenders NI.
- It is possible to continue working with a third party provider (‘eSender’) to submit notices to OJEU/TED as long as the eSender integrates successfully to post notices on FTS.
- Existing Contracts Finder users will be able to publish to FTS automatically and do not need to take any further action. However, Contracting Authorities which do not have a Contracts Finder account will need a Supplier Registration Service (SRS) account and will need to register here and apply to post notices. Contracting Authorities which already have an SRS account but not a Contracts Finder account will need to sign in here and then apply to post notices.
- What happens to Procurements already in progress prior to 1 January?
- The previous requirement to publish all relevant notices (including contract notice, contract award notice, contract amendments notice and corrigenda) to OJEU/TED continues to apply for procurements which were launched before 23.00 on 31 December 2020 and which were not been finalised by that date.
- For these purposes:
- A procurement is considered to be launched when a contract has been advertised. This includes by way of publication of a prior information notice as a call for competition or a contract notice or notified to those involved where an advertisement is not required.
- A procurement is considered to be finalised on publication of a contract award notice. In the circumstances where a contract award notice is not required, finalisation will be when the contract is entered into or, if there was a decision not to award, when bidders are informed why the contract was not awarded.
- In these circumstances it will also still be necessary to publish details of the contract award to Contracts Finder, the relevant Devolved Administration or other portals in accordance with the relevant legal and policy requirements.
- It is not a legal requirement to send notices which are required to be sent to OJEU/TED for publication to FTS, however, Contracting Authorities are asked to send such notices to FTS so that suppliers only have to look on FTS for UK opportunities.
- If legally required to send notices to OJEU/TED for publication, this must be done before publishing to FTS.
Before the end of the transition period, the rules around personal data remain unchanged, as the EU derived GDPR rules continue to apply.
Even after the transition period ends, data rules are likely to remain relatively unchanged, as GDPR will be incorporated into UK law. Domestic legislation such as the Data Protection Act 2018 will also continue to apply.
Looking ahead, businesses will also need to comply with any changes to EU GDPR if they offer goods or services to, monitor the behaviour of individuals in the EEA or have branches or offices in the EEA.
The UK will become a “third country” to the EU for data protection purposes, which means data transfers from the EEA into the UK will be restricted unless the transfer of personal data is covered by an adequacy decision, appropriate safeguard or exception. The Brexit deal does not grant the UK an adequacy decision and the EU Commission is still looking at that.
However the Brexit deal provides that if UK data protection law remains as it is then transfers of personal data from the EEA to the UK can continue without additional mechanisms for 4 months, which can be extended by a further 2 months. During that time, the EU Commission will continue to assess whether the UK will be granted an adequacy decision.
UK businesses may also need to consider whether they need to appoint a European representative based in the EEA and also whether they will have a new “lead supervisory authority” (one regulator in the EU to whom they can deal with in relation to data protection matters such as reporting personal data breaches). This will apply to UK businesses with an office, branch or established presence in the EEA, for example.
Actions to take now
UK businesses should identify and document the personal data transfers they currently make and what safeguards are in place now and review how this might change if the UK is not granted an adequacy decision.
Businesses should also consider their GDPR compliance documentation and whether it needs to be updated or revised to deal with changes resulting from Brexit, including a review of data protection impact assessments, records of processing activities, privacy policies and agreements relating to the transfer of personal data.