Understand Your Rights. Solve Your Legal Problems
Brexit is coming. Along with it, comes the inevitability of increased smuggling activity by Organised Crime Groups (OCGs). Below, Dr Simon Sneddon, Senior Lecturer at The University of Northampton, explains for Lawyer Monthly.
Nearly four decades ago, American academic Dwight C Smith Jr argued that “enterprise takes place across a spectrum that includes both business and certain kinds of crime”[1] and the concept that Organised Crime is just a facet of enterprise is no longer contentious: it is the dark mirror for legitimate business. Everything which benefits legitimate trade (globalisation, free trade, relaxation of border controls) also benefits illegitimate trade. Hiding in plain sight is the modus operandi of OCGs, who will frequently secrete smaller quantities of contraband in large legitimate shipments (with or without the connivance of the legitimate shipper), rather than arranging wholly illicit large-scale transportation. The Small Arms Survey for example, has found this to be the case for illegal firearms trafficking into the USA.[2]
Other than cybercrime, most of the activity in which OCGs are involved is demand-led: where there is a demand for a product or service, and the legitimate economy cannot satisfy that demand at an acceptable price, organised crime will fill the vacuum.
One of the things which looks likely to be implemented as part of Brexit is an end to the easy availability of unlimited cigarettes and alcohol from Continental Europe. Currently, provided it is for personal consumption or to give away as a gift, “there are no limits to the alcohol and tobacco you can bring in from EU countries.” [3] Despite this generous allowance, HMRC estimates that £2.4bn of VAT and Duty were avoided on tobacco products and £1.3bn on alcohol in 2015-16.[4]
This means that tobacco and alcohol with a duty and VAT total of £3.7bn have been smuggled into the country at a time where (for practical purposes) unlimited quantities of duty-paid product can be imported. Not all of this is due to the activities of OCGs, and a fair proportion can be attributed to those people whose friend/relative is “nipping across to the continent” and takes orders in the pub/office. Such activity is completely contrary to the law, of course, but nonetheless widespread.
Figures from the Institute of Alcohol Studies[5] and Tobacco Manufacturer’s Association[6] both show that while consumption of alcohol and tobacco are falling, demand remains high.
Brexit will reduce what can be imported legally, whilst doing nothing to reduce demand. The US experiment with Prohibition in the 1920s suggests that this is the perfect storm for OCGs. With our current, reasonably robust border controls, the National Crime Agency estimates that in addition to the alcohol and tobacco mentioned above, between 18-23 tonnes of heroin and 25-30 tonnes of cocaine enter the country each year, as well as a significant proportion of the 270 tonnes of cannabis that is consumed here.[7]
One likely goldmine for OCGs is the border between Northern Ireland and the Republic of Ireland. In 2017, the BBC noted[8] that there are 275 land border crossings along the 300-mile border, and the Irish Foreign Minister Charlie Flanagan said that “over 30,000”[9] cross daily. In an interview with the Financial Times, Aiden Gough from InterTradeIreland said that “some 177,000 lorries and some 250,000 vans” cross the border for business every month,[10] and this volume of traffic is what will allow OCGs to hide their activities.
Brexit, therefore, will limit legitimate supply, while providing an immediate avenue for OCGs to exploit. With an open or “soft” border, vehicles will not be stopped, and will proceed on their way with little hindrance. A hard border, while anathema to the DUP, would provide at least an illusion of control.
Either way, Organised Crime wins.
[1] Smith, D., Paragons, Pariahs, and Pirates: A Spectrum-Based Theory of Enterprise, Crime & Delinquency July 1980 26: 358-386 [2] Small Arms Survey (2016) ‘Dribs and Drabs: the mechanics of small arms trafficking from the United States’ Small Arms Survey Issue Brief Number 17 March 2016 [3] https://www.gov.uk/duty-free-goods/arrivals-from-eu-countries [4] Measuring tax gaps 2017 edition: Tax gap estimates for 2015-16 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/655097/HMRC-measuring-tax-gaps-2017.pdf [5] http://www.ias.org.uk/Alcohol-knowledge-centre/Consumption/Factsheets/Total-consumption-in-the-UK.aspx [6] http://www.the-tma.org.uk/tma-publications-research/facts-figures/uk-cigarette-consumption/ [7] http://www.nationalcrimeagency.gov.uk/crime-threats/drugs [8] http://www.bbc.co.uk/news/uk-politics-40949424 [9] http://www.bbc.co.uk/news/uk-northern-ireland-39522086 [10] https://www.ft.com/content/30c13788-d4e0-11e7-8c9a-d9c0a5c8d5c9
It’s unlikely that the UK and European Parliaments, as well as those of the 27 remaining EU member states, will continue to accept May’s continued deferment. Negotiations have progressed thus far by batting key issues down the field, but the field is only so big. So, realistically, how close is the Brexit deadline?
This week lawyer monthly hears form several expert sources across Europe and the UK on the implementation of Brexit and the impending deadline.
Markus Kuger, Senior Economist, Dun & Bradstreet:
With one year to go until the UK officially leaves the EU, the economic impact of Brexit is still unclear. Despite the extended transition period to 2020, short-term uncertainty is stifling small business growth, with more than a third (35%) cancelling or postponing expansion plans as a direct result of the 2016 vote to leave the EU. Many SMEs are anxious about the course of the Brexit discussions; one in three believe that their business simply won’t survive if the Brexit negotiations go badly.
For the next two years at least, businesses are going to have to navigate fluctuating and challenging economic conditions. Given this environment, our advice to businesses is to consider delaying long-term decision-making until the Brexit negotiations have advanced further. Our analysis shows that operating conditions could change dramatically – especially for importers and exporters – once the transition period has ended. But we are confident that a free-trade agreement between London and Brussels will be successfully negotiated in the medium term.
Gary McIndoe, Managing Director, Latitude Law:
The Brexit negotiations to date have been an exercise in avoidance. As much as government sources say that things are progressing nicely, in reality it has either had to accept the majority of the EU’s demands or simply postpone the difficult issues to a later date.
A key example of this is free movement of workers – something the government had previously promised would end on 29 March 2019, and which it has now committed to maintaining until the end of the transition period in December 2020. Equally concerning is the fact that discussions around the border issues between Ireland and Northern Ireland appear to have been simply kicked into the long grass for another day.
Of course, Theresa May is in an impossible position – she is trying to negotiate the UK through a process that nearly half of the electorate are opposed to, with a weakened government following the disastrous General Election, whilst also trying to appease the minority of Brexit fantasists that appear to be dictating policy from within.
Once again, the entire process highlights the arrogance and unpreparedness of those at the forefront of this process.
Wendy Gouldingay, Director, Gouldingay’s Family Law & Mediation:
Brexit is often referred to as a divorce but I’m concerned with how brexit will affect actual divorce proceedings.
I work with an increasing number of clients who were either born in Europe or are married to someone who is. As the clock counts down to Brexit, it’s these people - and their children - who could be most affected if negotiators cannot agree on what will replace the current framework for family law across Europe.
Currently, the EU provides a mechanism which proscribes which country’s jurisdiction takes precedence when there are two hearings taking place simultaneously in different countries; it enables court orders for maintenance, child contact or injunctions to be enforced in all member states; it enables information to be shared between nations so a partner can be located across borders; and it ensures cooperation between member states in cases of child abduction overseas.
Because this system is held in place by the European Court of Justice, the British government’s plan to end the court’s jurisdiction in the UK would mean that an entirely new arrangement needs to be agreed. Worryingly, its reported that negotiations on this issue only began last month. This means there’s alarmingly little time for negotiators to resolve this very important issue.
Prof. Rob Ackrill, Dept of Economics, Nottingham Trent University:
29 March 2019, two years after Article 50 was triggered, is Brexit Day. Whilst two years would never be enough time to negotiate a comprehensive Brexit deal, the need to ratify any agreement means the effective deadline for the negotiations would be Autumn 2018. Thus, some sort of fudge was always going to be needed, unless the UK entered into negotiations with a clear willingness to accept no deal (for which there was neither a clear mandate, nor practical logic in terms of the UKs best interests). We now know the nature of that fudge. 29 March 2019 thus marks BINO-Day (Brexit In Name Only).
31 December 2020 is the end of the ‘transition period’ – although even this is a misnomer, since the period does not involve a phased withdrawal from the EU. All it does is move the end-date when the UK departs the full obligations of EU membership. In effect, the no-deal ‘cliff-edge’ has been pushed back but remains threateningly vertiginous. That said, whilst the transition phase does not involve any sort of transition, it could provide time to allow agreement on transitional arrangements for a phased exit from the EU after 31 December 2020.
The cliff, however, is unlikely to be moved further. There is growing impatience with UK government in-fighting, as it tries to determine the sort of Brexit acceptable to the Conservative Party (although, as a result, Theresa May’s ambiguity over the UKs end-game is a reasonable strategy for remaining as Prime Minister). 1 January 2021, moreover, marks the start of the next seven-year EU budget package. It is highly unlikely that either side would want to see continued UK involvement in this (although this is distinct from bespoke deals, such as payments to allow continued UK participation in EU research, training and education programmes).
Nothing, we have been told repeatedly, is agreed until everything is agreed. This may prove to be the ultimate blessing or curse. Deferring decisions allows talks on other issues to begin – and it can focus minds when it comes to trying to finalise agreement on the hard-stuff. But this will be irrelevant if any element is not concluded2. There remains one issue that has been unresolved for centuries, which casts doubt on agreement being reached in the months that remain: the Irish border. Ironic really, given that Northern Ireland voted to remain in in the EU…
If you have thoughts on this, please feel free to comment below and let us know Your Thoughts.
With Brexit is fast approaching, what with this mean for the claims industry? The leaving date is quickly approaching, thanks to Prime Minister Theresa May invoking Article 50 of the Lisbon Treaty on March 29th 2017 — leading to a new plan that the UK will officially step away from the economic and political partnership on March 29th 2019.
An important aspect of Brexit that we must note is that there are various EU Directives and Regulations which currently apply to personal injury claims. Lawyers across the UK utilise these when assisting clients, but such practices may soon be subject to change.
Here, medical negligence solicitors from Tilly Bailey & Irvine Law Firm explore the alterations which may soon be witnessed in this area of the medical world in the years to come:
Getting a grip on EU Directives & EU Regulations
The most important issue of Brexit is to understand the regulations which are in place. Before we venture into how the EU and personal injury claims made in the UK are currently linked, it is first wise to understand what we mean by both EU Directives and EU Regulations.
Legal acts which are provided for in the EU Treaty are known as EU Directives. Once in place, all Member States of the EU are obliged to transpose them into national law, and are provided with a set deadline to do so. When it comes to the UK, EU directives have been turned into laws using Statutory Instruments — a process which means the government isn’t required to create a new piece of law and get it passed through parliament every time a new legal act is created.
EU Regulations are the more specific aspects of EU Directives, and are filled with the minimum requirements and fundamental principles that EU Member States must abide to once the legal acts are in place.
How do the EU Directives & EU Regulations apply to personal injury claims?
The EU Directives & EU regulations apply to personal injury claims in many ways, though there are three main examples of how the EU Directives and EU Regulations currently apply to personal injury claims which are made across the UK…
The 1974 Health and Safety at Work Act
The European Framework Directive on Safety and Health at Work lay the groundwork for the 1974 Health and Safety at Work Act. This is because this specific EU Directive has long guaranteed the minimum safety and health requirements which businesses across Europe must have in place to protect both workers and visitors on a site or workplace.
The Consumer Protection Act 1987
The Consumer Protection Act 1987, as well as its associated regulations, covers product safety and so provides consumers with protection whenever they buy goods and services in the UK. However, this act was passed as a result of an EU Directive from 1985, which saw strict liability being put against any producers of defective products.
How will Brexit change the industry?
An important part to stress when it comes to Brexit is that the UK government must first pass new laws in order to revoke any old European laws which have helped to form part of the nation’s own law. Until any such motion is made, nothing will change as old European laws will not instantly cease to be relevant just because the UK is no longer a part of the EU.
In regards to the Ehic scheme, there has already been a deal in principle agreed by negotiators in Brussels at the end of August 2017, which involved Brexit Secretary David Davis. The agreement outlines that British pensioners who have retired in another EU Member State and then travels to other Member States for holidays can still use their Ehic card whenever they require medical attention. This move is surely a positive sign for the future of the Ehic scheme.
Yet, it remains to be seen what results further discussions will bring when it comes to how Brits make personal injury claims post-Brexit, and how lawyers will be able to assist their clients in regards to these claims.
Ajibola Oluyede is the visioner and co-founder of TRLPLAW Solicitors and Arbitrators and was Managing Partner of TRLP Solicitors London until 2006. As current Chair of the Board of Partners of TRLPLAW Worldwide, he is a Chief Market Developer and Commercial Litigator. He speaks on how Nigeria and UK relations are holding up and how Nigeria is adopting cryptocurrencies.
You commonly deal with cross border finance related disputes; how do you see the up rise of cryptocurrencies affecting the transaction / compliance with money laundering process in the future, if it were to spread to cross border transactions?
In Nigeria Banks are prohibited by the Central Bank of Nigeria Circular of 17th January 2017 from dealing in crypto currencies. However this does not affect online transactions that are denominated in cryptocurrencies, such as Bitcoin.
The Nigerian ban unfortunately merely leaves the use of crypto currencies in even cross border transactions involving physical assets based in Nigeria (for example real estate) outside the purview of Nigerian money laundering laws, the reporting and other conditions that enable scrutiny of transactions done with traditional currencies. The issue of compliance with such regulations is therefore still moot in Nigeria as we grapple with an understanding of the blockchain technology that spawned this phenomenon. I think the Central Bank circular was based more on fear of the unknown than an attempt to really understand what the technology means for the burgeoning Nigerian economy. Hopefully the work of the CBN/NDIC committee subsequently set up to study the blockchain technology will result in a different perspective.
How fluid are matters between the UK and Nigeria? From your experience, what could be done that would ensure disputes are resolved with more ease?
Nigeria and the UK are natural trading partners with centuries of trade between them. Both countries have ratified the Bilateral Investment Treaty between them and this protects British investments in Nigeria, as it does Nigerian Investments in Britain. Nigerian has no significant issues with its trade with the UK, which remains one of the top ten Nigerian export destinations.
The proposed Trade and Investments Cooperation Agreement being negotiated between the two nations is expected to grow trade volumes between both countries by over 4.5 billion sterling in 2030. Nigeria’s main export to the UK is crude oil and Britain’s export of goods and services to Nigeria exceeded its imports from Nigeria for the first time in seven years in 2017. That was ascribed to fall in oil prices.
Currently, with the Brexit, it appears that more opportunities for trade and investments are coming up. The British Government through the head of its Department for International Trade (DIT) announced in February 2018 that it was ready to provide UK government guarantees to secure Naira loans by Nigerian banks to Nigerian projects that are importing goods and services (that form not less than 20% of the content of that project) from the UK. The dispute resolution provisions in the Nigeria UK BIT ensure smooth resolution of investment disputes. Most often arbitration clauses in other cross border contracts specify Britain as the venue for arbitration and UK law as the law of the contract. Nigerians do not mind this because as a common law jurisdiction we are familiar with British law.
When representing the Nigerian Creditors in a dispute, you managed to influence the United Kingdom’s Financial Services Authority to withdraw its license; how did you prepare yourself for this?
I represented Nigerian depositors in the London Trust Bank in its CVA, which was prompted by the FSA withdrawal of the banks license. I was already known to most of these depositors and in seeking a lawyer with the grit and knowledge to retrieve their deposits they chose me. When I became aware that the main activity of the bank was trade finance with mainly Nigerian funds we tried to get the FSA to reconsider the withdrawal of the license so that the Bank could continue its lucrative business under a new management. I think we got involved too late in the day. Perhaps if we had been aware of its difficulties with the FSA earlier and made that pitch it would have been acceptable. We discovered that the FSA had actually given the owners an ultimatum to diversify the banks ownership or loose the license. It was their failure to comply that precipitated the FSA’s action.
In the end we tried to continue the trade finance activities of the bank under a new company.
What are three things that are vital to being the best during commercial disputes.
Preparation, preparation, preparation.
What changes are you advocating for, that will enable Nigeria to develop further in 2018?
A proper structuring of the Agricultural economy of the country to open up international markets to Nigerian natural and Organic products. This will involve better regulation, quality control protocols, conformity assessment protocols and certification for goods and services that are required to meet international standards.
We consider our law firm, TRLPLAW, a leading practice in Agricultural law because of our involvement in this advocacy and other very significant transactional work in this area.
We are currently handling, amongst several major assignments in this area, a significant cross border M&A, advising on a major initiative involving joint ventures between Nigerian entities and European entities and statutory framework for operations in an important sector of the agricultural economy which is expected to become a paradigm for the entire Nigerian Agricultural economy. These are bound to boost the Nigerian economy when on stream. I can’t say more than this about these projects at this time.
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Described by a National Newspaper as the “quintessential Lawyer” Ajibola Oluyede has effectively traversed the entire gamut of legal Practice in Nigeria as a litigator. Admitted to the Nigerian Bar in 1981, he began legal practice and quickly earned a reputation as a tough litigator and commercial lawyer with special interest in cross border financial transactions and compliance with money laundering as well as other regulations. Having been pioneer partner in TRLP Solicitors, a London based commercial law firm established in 2002, he has been consulted and acted in respect of high profile matters in the United Kingdom involving the assets of Nigerian political figures.
TRLPLAW is a union, which consummates the vision by various international law firms based in Africa, Europe and America to forge a multinational law practice of the highest quality, capable of delivering excellent, diverse legal services to businesses and businesspersons globally -particularly within frontier and emerging markets.
Protagonist of this week's news, Alexander Nix is the executive at the centre of the Cambridge Analytica and Facebook controversy surrounding political campaign influence, sly data based marketing and supposed behind-our-backs data harvesting through everyone's favourite social media platform.
In this video CEO Today delves in to the life of Alexander Nix, a very private individual, listing some hobbies, interests and much of what he's been up to, to get where he is today.
(Article written by Alexander Pelopidas)
Greetings from (mostly) sunny Cannes where Rosling King are attending MIPIM 2018, the global property exhibition and conference event. With over 24,000 people from the property world due to attend, we are already braced for the tidal wave of prediction, analysis and crystal ball gazing which are characteristic of such gatherings.
If all this appears daunting then do not worry – for the team at Rosling King will be providing analysis and commentary on the key themes and events of the conference, beginning with the giant elephant in the room that is Brexit.
As a London (or UK) based law firm, the potential impact of Brexit is all too apparent. With politicians on both sides of the Channel moving (slightly) on from empty rhetoric and beginning negotiations in earnest, there remains several key issues which both investors and lenders need to consider.
The first relates to passporting. Prior to Brexit, EU passporting rules allowed finance companies to sell their services across the 28-member block with a local licence. This meant that they did not have to secure individual operating licences in each member country where it seeks to do business.
In her speech just under a fortnight ago, Theresa May ruled out securing passporting rights: “We are not looking for passporting because we understand that it is intrinsic to the single market of which we would no longer be a member.”
Such clarity, after months of confusion is welcome but it does raise the question of what sort of access the PM is looking for. If a deal on passporting between the UK and the EU can’t be secured, then the former would have to reapply as a third country for access to the single market. This will almost certainly be under more limited terms than is currently enjoyed by UK firms and could hinder London’s ability to attract inward investment from (or via) Europe. Such a result would also make it more difficult for British firms to sell a variety of financial services to Europe – one of their largest markets.
Brexit also raises questions over legal enforcement in EU jurisdictions. Leaving the Single Market will/ could limit the ability of UK firms to enforce judgements against their European counterparties – forcing them to rely on the rules of the relevant local jurisdiction. Needless to say, such a course would be harder and costlier for UK firms.
All of this begs the question whether London, and English Law, will retain its primary position as the preferred governing law for financial documents? Much of the debate around London and Brexit has focused on whether ‘the City’ will suffer as a result of banks moving to the likes of Frankfurt or Paris. We have recently moved on from this slightly – recognising that the more likely destination for any such move would be New York or Singapore. New York law is seen by many as a sturdy alternative and does pose a significant threat to London’s current pre-eminence.
Overall, however, the body of English Law and the approach of London’s commercial courts should continue to ensure London remains an attractive jurisdiction to operate in. Brexit will put to the test the institutions and sectors on which London’s financial success is built upon and will reveal which of those are fit to compete globally.
While deadlines and departure dates remain unknown, the UK needs to prepare itself for substantial changes within its legal system when we eventually part ways with the European union. Here, Richard Thomas, employment lawyer and partner at Cardiff and London based firm, Capital Law, shines a light on areas of EU law that might not make it through to the other side of Brexit.
General Employment Law
There have been mixed signals from the Government about potential changes to employment laws following our departure from the EU.
Theresa May (who campaigned to remain in the referendum) has maintained that there won’t be any substantial changes to current laws. But, it’s been widely reported that other cabinet ministers – like Michael Gove and Boris Johnson (who both campaigned to leave) – are more inclined to be ‘flexible’ about potential changes to UK employment law.
The TUC is certainly anxious about any dilution of workers’ rights after Brexit. The changes might include the following.
Transfer of Undertakings (Protection of Employment) (TUPE)
TUPE currently implements the EU Acquired Rights Directive – which protects workers’ rights if the business they work in is sold to another one. TUPE will likely remain as part of the accepted employment protection.
But, it might be tweaked.
Currently, restrictions on harmonising terms and conditions post-transfer apply and can’t be lifted, because of EU law. But when we leave the EU, changes to terms and conditions might be allowed after a period of time after the TUPE transfer.
Working Time
Most Working Time Regulations will remain, and it’s likely that the right to 28 days’ paid holiday leave – and rest breaks – will stay. But, holiday pay calculations (including commission and overtime) might be reviewed and could revert to basic salary being paid as holiday pay.
The maximum average 48 hour working week might also be abolished, along with ‘inactive on-call time’. And, the accrual of annual leave during long term sickness will probably be reviewed, too.
Protection of Worker Rights (Discrimination)
The EU Equal Treatment Framework Directive (2006) was implemented in UK under the 2010 Equality Act.
Some ‘protected characteristics’ – like race, sex, marital status, and disability – are protected under UK legislation. But, many of the more recent protected characteristics – like age, sexual orientation, and religion and belief – are derived from EU law.
Changes to the existing regime of direct/indirect discrimination, harassment, or victimisation because of a protected characteristic seem unlikely. But, there is a call for discrimination compensation to be capped to a maximum of one year’s salary, in the same way as unfair dismissal is. This is incompatible with EU law – but could change after Brexit.
Free Movement of Labour
Once we’re no longer in the EU, the UK could impose new controls for future EU travellers to the UK – and EU countries might do the same for UK citizens.
Last September, a Home Office document provided fresh insight into how Theresa May’s Government will redeem the referendum promise to ‘take back control’ of EU immigration. It points to:
The practical reality of negotiating with other EU countries could also be challenging. Other countries that aren’t in the EU, but that have the benefit of free trade with it – like Norway – have had to agree to free movement of workers as a condition of the trade advantages.
Temporary Agency Workers Directive
At the moment, the Agency Workers Regulations implements the EU Temporary Agency Workers Directive. Under this, agency workers are entitled to the same rate of pay and basic working conditions once they’ve been on the same assignment for 12 weeks.
It’s likely that this will be repealed entirely. Trade Unions are ambivalent about this; very few temporary workers join unions, so they don’t have members’ interests to protect.
Climate change
The Government’s position on climate change isn’t currently on the Brexit negotiating table. But, while it does pose threats, it also creates an opportunity to make the UK a climate champion.
The UK will need to individually ratify the Paris Agreement and produce an individual Nationally Determined Contribution (NDC). A hard Brexit will mean exiting the European Union Emissions Trading System (EU-ETS) – the oldest emissions trading scheme and the primary tool to reduce carbon.
The EU-ETS has helped the UK meet emissions targets and allowed London to become a financial hub – the largest EU-ETS exchange market for climate-related financial services.
Leaving would mean adjusting the carbon budget under the Climate Change Act 2008. So, meeting the UK’s emissions target could be negatively affected.
UK financial regulatory framework
The Government has said that Britain will develop its own distinct regulatory framework.
Financial regulation derived from EU legislation will be applicable until the Government makes changes. Any changes to domestic financial regulation will depend on the future relationship with the EU.
The UK has higher regulatory standards than some EU regulations, like the Retail Distribution Review and the Bank of England stress tests. But, lots of finance/banking rules are set by global regulators, so these wouldn’t be affected.
If the UK intends to conduct business with the EU, it’ll need to comply with EU financial regulation. If we remain in the European Economic Area, passporting rights could be preserved – though this would mean adopting EU regulations, without the power to influence damaging ones.
Human rights legislation
The Charter of Fundamental Rights of the EU currently protects human rights of everyone living in the EU. The Government has said that the charter will no longer have effect in the UK after Brexit.
The UK will still be subject to the European Convention on Human Rights when it leaves the EU, as these are protected by the Human Rights Act 1998.
The latest immigration statistics released showing a record drop in EU net migration highlight a continuing trend of EU nationals choosing to leave or not relocate to the UK for a more certain future elsewhere, says Sophie Barrett-Brown, Head of the UK Practice at specialist immigration lawyers Laura Devine Solicitors.
Barrett-Brown notes today’s figures, which reveal that the number of EU citizens coming to the UK (220,000) decreased by 47,000 over the last year and is now at a level comparable with 2014. The number leaving the UK (130,000) is the highest recorded level since 2008.
As a result, EU net migration has now returned to the level last seen in 2012. These figures reflect the destabilising uncertainty facing both skilled workers and British employers – particularly as they come just a fortnight after the government said its white paper outlining the post-Brexit immigration models (originally proposed for publication in Autumn 2017) will not be published until a transition deal is agreed.
Sophie Barrett-Brown, Head of the UK Practice at specialist immigration lawyers Laura Devine Solicitors, says: “A further fall in net migration may seem to be good news for those with concerns about immigration, but in reality it underlines a growing skills shortage impacting on businesses and public services. Behind every official statistic showing more workers leaving the UK and fewer arriving, the real story is vacancies unfilled and business potential unrealised. Skilled EU nationals choosing to pursue opportunities outside the UK is not a success story for the UK.
“The biggest concern is the ongoing uncertainty employers face as the Brexit deadline of March 2019 approaches. With government now not due to publish proposals for the post-Brexit migration system until the end of 2018, employers are having to plan for any scenario and a number of businesses have already begun transferring some of their business functions overseas. While this may prove to be unnecessary once the new rules are known, businesses cannot hang around and wait, they have to plan now for the next several years.
“The reduction of EU migrants willing to accept roles in the UK coupled with the Tier 2 cap for employer-sponsored non-EU workers being reached – an event which prior to December 2017 had only occurred once, in June 2015 – employers are under significant pressure to fill their vacancies – with the NHS unable to recruit doctors from overseas to a number of posts. Without substantial innovation in the migration system – particularly to ensure that any new system for EU migrant labour is more adaptive and less restrictive than the current non-EU workers system – then many UK employers may find they are unable to fulfil their business plans.”
(Source: Laura Devine Solicitors)
We cannot underestimate how fundamental the issue of VAT is in Brexit negotiations. If the changes made to the Cross-border trade bill last Monday were to enter the UK’s legal framework after it leaves the customs union, the impact on over 130,000 of the UK’s firms would be catastrophic. Below, Gareth Kobrin, CEO of VAT GLOBAL, explains. The VAT IT group is a global leader in cross-border VAT and tax recovery for companies including De Beers, Ericson and Volvo.
This is because without any more developments, VAT will be required upfront on goods when they cross the UK/EU border, rather than after the final purchase by the customer as is currently the position.
The effect this would have on both UK and EU companies, who are reportedly already struggling based on recent announcements from HMRC, was highlighted by Commons Treasury select committee chair Nicky Morgan, who pointed out the move would be a nightmare for businesses resulting in hefty cash flow implications as payments are moved forward long before tax can be recovered from HMRC.
The current rules companies follow are the result of the UK being in the EU VAT area. This means when goods enter the UK, they aren’t subject to VAT as they are instead treated as intra-community acquisitions, with VAT generally accounted for under a ‘reverse charge’ mechanism.
As suggested by the recent bill however, the UK leaving the single market will mean transported goods are treated as imports and exports and therefore subject to expensive import VAT and custom duties, long before the increase can be passed on to the customer.
It has also been confirmed that there will definitely be no so-called “hard border” separating the Republic of Ireland and Northern Ireland, and so effectively free movement between the two countries will remain. This could open a potential loophole for businesses, who may elect to divert their imports via Ireland, thereby creating a massive temptation for a host of fraudulent transactions.
The good news is the political neutrality of VAT makes it an appealing subject for both sides to leverage as a negotiating tool. It looks the like the UK has taken the first step with this cross-border trade bill and it could be it is just a strategic effort to show Brussels they are prepared to play hardball, despite the obvious negative effects it would have on UK business.
If this bill were to be passed however, it’s almost certain HMRC would introduce a VAT deferment scheme with a similar model to something that currently operates in the Netherlands to help alleviate the cash flow burden. The problem with this for the EU, however, is that UK businesses are currently the biggest net importers in Europe. If the additional costs lead them to start looking elsewhere, exporters on the continent are going to lose valuable business.
The next concern involves the chance that the EU may respond to this bill by imposing VAT imports of its own on goods from the UK. This isn’t as catastrophic for the mostly service-focused UK industry that net imports, but EU businesses may rightly ask why the same cash flow problems are being passed onto them. This would be the worst scenario for all involved though, as all services retained by EU businesses from the UK would suddenly be subject to 20% VAT, which again is likely to mean companies go elsewhere, or at very least face a complex and length VAT reclaim process.
Given how detrimental these scenarios would be, it doesn’t seem likely either side would wish to accept them. It isn’t clear the issue is being resolved by talks as they currently stand though, which means companies need to plan for any eventuality.
Without considerable attention from the government, the way VAT will work post-Brexit is likely to be complex to start with. Practical and technical advice on these matters will be necessary to ensure businesses are compliant with VAT laws, and, so they can take advantage of any simplifications that are hopefully introduced. To not do so may leave businesses coming up short at a time when every saving, and indeed invested penny, matters.
Brexit raises many issues in almost every legal field and family law is certainly no exception. Alex Critchley is a Solicitor in the Family Law Team at Morton Fraser. He regularly advises on issues of international jurisdiction in family cases, and below discusses the potential prospects of family law post-Brexit.
The term reciprocity will seem obscure to many non-lawyers but it is of crucial importance when considering what mechanism the UK seeks to employ to deal with jurisdiction, recognition and enforcement in international family law cases when the UK leaves the EU.
The concept of reciprocity addresses the issue of how other EU member states will react, first, to ongoing court proceedings in the British courts and, secondly, to judgements of British courts, including decrees of divorce.
It has been suggested that the current mechanism, known as the Brussels II bis Regulation, for regulating questions of jurisdiction, recognition and enforcement in some family law matters be transposed into UK law.
The problem is that if the UK does this, but other remaining EU member states no longer recognise us as being a 'Member State' then, among other things, there may be a situation where a UK court will recognise ongoing proceedings in Germany, but the German court will not necessarily recognise ongoing proceedings in the UK.
Under the current rules, when a person is divorced in the UK, that divorce is entitled to automatic recognition in Germany. Equally, when a German court grants a divorce, it is entitled to automatic recognition in the UK. This is because the Brussels II bis Regulation provides that judgements of Member State courts are recognised without further procedure. However, when the UK leaves the EU, Germany will again require that British divorces are subject to a recognition procedure (known as an Anerkennungsverfahren). However, the UK would still recognise German, Italian and French divorces without further procedure.
This is not a great outcome. We do not want a situation which does not provide reciprocity. The problem is that whether a German court recognises British court judgements is really something that the UK Government has little control over, unless a treaty can be negotiated to regulate matters.
The mind boggles at the other numerous issues that could arise.
Indeed, there are numerous difficulties that can arise even between different parts of the UK when matters haven't been carefully thought through. Last year, for instance, it was recognised that there was a lack of a statutory mechanism to register and enforce an English order placing a child in secure accommodation in Scotland.
The difficulty is that some issues, especially matters involving children, require swift action. Where British and EU authorities have expedited procedures for dealing with intra-EU cases, these procedures may fall away and cases will be dealt with more slowly by all countries concerned.
There are old rules dealing with matters that can potentially be re-introduced to deal with matters currently dealt with under Brussels II bis. For example, where there were competing ongoing EU cases in the past, UK courts could resort to a common law doctrine called 'forum non conveniens'. However, this doctrine requires the court to consider which court is most 'convenient' to hear the dispute and this is a costly exercise to undertake. This discretionary doctrine has produced copious appeals, adding significant expense and time to already potentially ruinous divorce cases. For all the problems that the EU's 'first in time' rule has, including the race to raise proceedings, the rule has the advantage of being clear.
Whatever view one has of Brexit, the issue of reciprocity cannot be ignored. Either it should be agreed that the Brussels II bis Regulation continues to apply to the UK, with mutual recognition with other EU Member States, or we need to think – (quickly) - about new legislation.
A copy and paste job will not work here. One possibility is replicating the Brussels II bis Regulation with a similar mechanism to the Lugano Convention, which allows for reciprocal enforcement in non-family commercial and civil cases in non-EU EEA states. This is a framework that could operate outside of the EU if there was the required political will. Time is getting short for getting matters resolved.
It may be that where there are holes in existing rules, we may have to look at developing our own rules for jurisdiction in family actions sooner than we like. If we do, then we need to make sure that these rules are well thought out and work efficiently. Perhaps it may also give us an opportunity to re-think some of the tricky jurisdiction issues that still exist between the constituent parts of the United Kingdom.
