Preparing for the EU Exit: Trading Services
Leaving the EU Single Market means that there will be changes in how cross border trade in services will be conducted.
The issues for services trade have not had as much focus as goods trade. In this feature, we highlight some of the common issues which services businesses need to consider and act upon in the weeks ahead.
What is changing?
Services trade sits outside of the NI Protocol, so from 1 Jan 2021 arrangements for Northern Ireland services firms will largely mirror those for similar businesses in the rest of the UK. Arrangements for services trade form part of the ongoing UK/EU negotiations on a new Free Trade Agreement (FTA).
Whatever the outcome of these negotiations, services firms will have less access to the EU Single Market under an FTA than they do currently. How much will change for an individual business will vary depending on which sector a firm is in and how the service is provided to the customer.
Assess the potential impact on your business
It is a complex picture so it is important to assess the potential impact on your business and identify what adjustments may be required.
Some of the key areas to consider are:
- Market Access: will you still be able to service your existing customers in the way that you do currently e.g. remotely from Northern Ireland? For some services, an establishment or representation within the EU is required when a service is being provided by a non EU business. You may need to change or update your business model.
- Cross border business trips: do you deliver a service with a temporary presence in an EU Member State? Visas and other approvals in advance of travel may be required, creating an additional cost and a need to forward plan.
- Recognition: are your qualifications, accreditations or authorisations still accepted to enable you to deliver the service within the EU? There may be a need to re-qualify or re-certify, if not in advance of 1 Jan 2021 then potentially in the medium term.
- Data: does your business handle data from a business or organisation in the EU? There are new contractual measures to be put in place to enable data flows to continue whether a data agreement is achieved between the UK and the EU or not. You should review the Data Protection at the End of the Transition Period guidance from the Information Commissioners Office.
What can I do now?
A good starting point is to review the guidance published by the EU - EU Readiness Notices for the End of the Transition Period. This guidance sets out what rules will apply on a whole range of issues from 1 Jan 2021 in the event that an FTA is not agreed by the end of the year.
If a deal is agreed between the EU and the UK, then there will be some provisions to facilitate trade in services and more detailed guidance will be provided at that point on issues such as mutual recognition of qualifications.
You should also contact your relevant professional body, institute or regulator for specific advice and insights e.g. on the provision of services across the island of Ireland. Many of them have bespoke guidance available for businesses in their sector.