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In or out? That is the question!

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Most of the talk around the upcoming EU Referendum has been led by the UK media but here, at the commercial team at Brethertons we want to focus on some of the legal issues likely to affect businesses.

Issues after withdrawal

The withdrawal by the UK from the EU would be an intricate, extensive and uncertain process. Following the withdrawal from the EU, building a new relationship would very much depend on the attitude that the other countries in the EU take towards the UK and how obliging all parties choose to be. 

As the EU has exclusive control over trade policies, the EU’s present trade agreements with non-EU countries are entered into by the EU in its entirety rather than by each member state. If the UK does therefore decide to withdraw from the EU in June 2016 the UK would need to negotiate trade arrangements with non-EU countries with whom it presently deals on EU trading terms. Unless otherwise agreed, the UK would not be able to rely on the EU trading terms on withdrawing from the EU.

Separating the UK from EU law and regulation would raise detailed technical issues.  This will have implications for those businesses that are affected by the UK’s membership of the EU and they would need to consider any potential ambiguity and possible change on their processes and strategy. 

Key issues include:

•    The sale or supply of products both across the EU or non-EU countries with which the EU has trade agreements. 
•    The supply of services dependant on EU passport rules or the acknowledgment of qualifications or standards.
•    The employment of persons from EU members in the UK, or from the UK in the EU.

As well as the above issues UK businesses will also need to contemplate the effect of the UK’s withdrawal from the EU on other areas. Some of these would include the rules surrounding competition and consumers, research and development, data protection regulations and free movement of capital.

Remaining in the EU

Whilst if the UK remains part of the EU David Cameron has been part of negotiations with the European Council and the following are the key reforms relevant to businesses: 

Economic governance. These measures seek to ensure that there can be further eurozone integration without prejudicing the rights of non-eurozone EU member states. There should be no discrimination based on the official currency of a member state and non-eurozone member states will not have to contribute to eurozone bailouts.

Competitiveness. The EU’s commitments to the internal market and free movement of goods, persons, services and capital are affirmed, along with a commitment to boost competitiveness and to reduce the burden of regulation on business. Unnecessary legislation should be repealed.