The new UK-EU relationship and actions to take

The UK-EU Trade and Cooperation Agreement sets out the conditions for future trade and areas of mutual interest. It covers many areas of interest for ADS members, including trade in goods, customs and trade facilitation, aviation, chemicals, data, security, EU programmes and R&D, and mobility.

The UK wanted some areas to be covered by separate agreements (for example on aviation safety) as part of the approach to governance, but the one agreement will encompass everything. The agreement has been supplemented by unilateral decisions on financial services equivalence and data adequacy.

As the UK is no longer under the jurisdiction of the European Court of Judice (ECJ) any disputes will look to be resolved diplomatically by the Joint Partnership Council, a new UK-EU joint committee.

With regards to the level playing field, the agreement sets out definitions of a subsidy and a list of common principles for both sides, which are similar to the EU’s system of state aid. However, the UK government’s analysis indicates an enhanced level of freedom in the approval of subsidies. The UK is also required to set up an independent competition agency to assess these common principles.

This deal means there are new actions businesses need to take:

  • to move goods between GB and the EU
  • to get products certified and/or approved to be placed on the UK & EU markets
  • for UK firms and individuals to engage in business activity and deliver services in the EU

This page summarises what has been agreed across these relevant areas, and the actions businesses may need to take from now on. It also provides signposts to more detailed information and guidance. If you are based in Northern Ireland, or looking for information on trading there  please head to our dedicated Northern Ireland page. There is also a dedicated page for more information on EU funding programmes and R&D.  

Trade in Goods

What has been negotiated?

The UK and EU will not apply tariffs or quotas on qualifying goods under the agreement.

Tariffs will not apply to goods which meet rules on local content and some goods are exempt from rules of origin requirements. The agreement outlines that UK and EU content can be treated the same in terms of cumulation, counting towards the local content provisions.

Aerospace products are tariff-free and are covered under the plurilateral WTO Agreement on Trade in Civil Aircraft and are not governed by the UK-EU agreement.

In relation to non-tariff barriers or technical barriers to trade, the UK and EU have agreed that they will undertake impact assessments if either side deviates from international standards. A specialised committee will govern these rules and facilitate cooperation.

Actions businesses need to take

UK traders need to check if their products comply with origin requirements and how to prove they originate from the UK.

Members can check which goods qualify for tariff free trade using the gov.uk tool and can find the right commodity codes for imports into and exports out of the UK online.

Customs and Trade Facilitation

What has been negotiated?

The agreement will require customs declarations and other administrative processes for businesses to process the movement of goods. The agreement allows for simplifications to some customs processes and forms and for eligible businesses to use trusted trader schemes.

The UK and EU have agreed mutual recognition of Authorised Economic Operator (AEO) schemes and have agreed to cooperate and exchange information on customs and VAT matters to prevent fraud and recover unpaid duties.

Actions businesses need to take?

Full customs declarations and controls will be introduced on 1 January 2022 as previously announced, although safety and security declarations will now not be required until 1 July 2022. The UK has taken unilateral action to phase in certain customs processes for EU goods imported into GB.

Recent supply chain challenges and complex new requirements, particularly for those importing products on animal origin, are adding to an already difficult time that business has been experiencing. The government has therefore decided to give businesses of all goods more time to adjust.

Details on the new border with the EU are contained in The Border Operating Model which has been updated to reflect the UK’s new Trade and Cooperation Agreement with the EU.

There are a number of areas where businesses need to continue to act, which include:

This EU document contains answers to FAQs on the new tax and customs arrangement.

New Guidance on Using Free Ports

For Goods under Export Control or for dual use

For businesses trading goods under export control or for dual use, there is a requirement to secure an EU dual-use OGEL, you can use the Goods Checker, to find out if this applies to you. This is required if you are exporting dual-use items in Annex 1 of EU Regulation 428/2009 to any EU member state from 1 January 2021.

With a one-off registration to use the Open General Export Licence Dual-Use Items in EU Member States members are able to export items to any importer in all EU Member States and the licence is not timebound.

With a one-off registration to use the Open General Export Licence Dual-Use Items in EU Member States members are able to export items to any importer in all EU Member States and the licence is not timebound. Further information is available on GOV.UK to help members identify what licenses they need, if any.

As a result of the agreement between the UK and EU on unfettered access, there are no controls on NI-GB movement of dual-use items. More information on the this can be found on the Northern Ireland section of our hub.

Webinars

Members are still able to access the ‘Preparing for Brexit’ series of webinars through the member’s area. While we plan and deliver a new series of ‘Managing Brexit’ webinars, the old webinars on Requirements for Defence Exports and Logistics and Freight still contain some useful information and guidance.

Aviation Safety

What has been negotiated?

Within the agreement is an article on aviation safety and a detailed annex covering airworthiness and environment certification. The agreement will help facilitate the recognition of each side’s aviation safety certificates and licenses and the annex covers aerospace design and production in detail. The agreement does not include a maintenance annex.

The UK and EU will now work, primarily through the regulatory authorities, to develop the Technical Implementing Procedures (TIP) that will support the airworthiness annex.

A specialised committee on aviation safety has also been created as part of the wider governance structure supporting the agreement. This committee is responsible for ensuring the agreement is operating effectively and smoothly for both sides and will also be responsible for agreeing new annexes to the agreement in the future.

ADS members can access a specific summary of the aviation safety agreement in the member’s area.

Actions businesses need to take:

Aerospace design organisations

UK-based design organisations should apply to the UK CAA for a UK 21J approval. This will ensure access to the UK market is retained. Under the new arrangements, it will provide access to the European market with new design certificates either validated or accepted by EASA. This application process also applies for Alternative Procedures to DOA (ADOA).

Whether the certificate will be automatically accepted or will need to go through a validation process is broadly set out below, with more detail to follow once the Technical Implementing Procedures (TIP) have been agreed:

  • Minor changes and repairs approved by the UK CAA or EASA will be accepted by both sides.
  • Type certificates and significant supplemental type certificates for the design of aerospace products will be validated by the other regulator. Both sides will assess the extent to which validation can be streamlined on a case-by-case basis.
  • The UK CAA will automatically accept non-significant type certificates, non-significant major changes or repairs, and technical standard order approvals issued by EASA.
  • EASA will validate non-significant type certificates, non-significant major changes or repairs, and technical standard order approvals issued by the UK CAA. The agreement provides the potential for automatic acceptance by EASA in the future, once the UK CAA has demonstrated its new capability in this area.

UK-based design organisations should consult the CAA website for full, detailed guidance.

Aerospace production organisations

The agreement sets out that EASA and the UK CAA will accept each other’s production systems. This means:

  • There will be mutual recognition of production approvals, and of the certificates issues by production organisations established in the UK and EU.
  • For new categories of products, the production method in one party will need to be approved by the other before they are subject to mutual acceptance.
  • Existing products will be accepted, and the CAA Form 1 and CAA Form 52 will be recognised as equivalent to the EASA Form 1 and 52.

UK-based production organisations should consult the CAA website for full, detailed guidance.

Aerospace maintenance organisations

The agreement does not include a maintenance annex, therefore companies that wish to maintain and certify EU-registered aircraft will need an EASA third-country approval.

Approved UK maintenance organisations will continue to be able to maintain and certify UK registered aircraft to the same extent as before.

UK-based maintenance organisations can consult the CAA website for full, detailed guidance.

Webinars

Members are still able to access the ‘Preparing for Brexit’ series of webinars through the member’s area. As a result of the new agreement on aviation safety, the webinar on this topic is now out of date. A new webinar covering the agreement on aviation safety is being planned as part of our new ‘Managing Brexit’ series.

Chemicals

What has been negotiated?

A chemicals annex has been included in the scope of the agreement, providing for implementation of the UN Globally Harmonised System and for cooperation between authorities. This includes the facilitation of cooperation over non-confidential information through a specialised committee under Technical Barriers to Trade.

The agreement does not allow the UK’s chemical regulator access to EU REACH data. Therefore, a duplication of information is envisaged.

Actions businesses need to take:

Producing or importing chemicals into Great Britain

In an effort to minimise initial cost and disruption to industry, the UK Government has transferred, or ‘grandfathered’, existing registrations held by GB companies on the EU REACH system to the new UK REACH system without a fee.

None of the guidance below applies to businesses based in Northern Ireland. Please visit our dedicated Northern Ireland page for information on the REACH regime in Northern Ireland, and how to import/export chemicals to and from Northern Ireland,

There are now two steps for GB-based entities with EU REACH registrations to take:

  1. By 30 April 2021, GB companies with EU registrations will have to notify the HSE and provide basic data such as company name, company details, substances registered, quantities produced and evidence of their existing ECHA registration.
  2. Within two years of 28th October 2021, companies would need to submit full information to support the registration, such as information and data on the properties of the substance and its safety. The deadline may be longer, depending on tonnage band.

Full guidance on the grandfathering process can be found on the HSE website.

For GB-based businesses importing chemicals from the EU or country in the European Economic Area (EEA) before the end of the transition period, there is a different notification timeline:

  1. Within 300 days (27th October 2021), companies are required to notify the HSE of the substances they import from the EU and/or EEA, including basic information about the substance and its safe use;
  2. Within two years of the 300 day deadline (28th October 2021), a full information package to support the registration will be required, depending on tonnage band.

Full guidance on Downstream User Import Notification can be found on the HSE website.

For GB-based businesses that were not previously a registrant, downstream user or distributor under EU REACH, and wish to import chemicals into GB for the first time, no transitional provisions will apply. These businesses are required to follow the processes for submitting a new registration under UK REACH.

Exporting chemicals to the EU

GB-based businesses moving chemicals into the EU or EEA countries have two options:

  1. Ensure that the importer holds an EU REACH registration for the substance or;
  2. Appoint an Only Representative in the EU or EEA country to register the substance.

Further detail is available on the ECHA website.

Webinars

Members are still able to access the ‘Preparing for Brexit’ series of webinars through the member’s area. While we plan and deliver a new series of ‘Managing Brexit’ webinars, the previous webinar on UK REACH still contains some vital and useful information on the actions businesses need to take.

Data

What has been negotiated?

The agreement reached between the UK and the EU does not cover data adequacy, a separate process alongside the negotiations on the trade agreement took place to examine this issue.

Following a careful assessment of the UK’s law and practice on personal data protection, the Commission concluded that the UK ensures an essentially equivalent level of protection to the one guaranteed under the General Data Protection Regulation (GDPR) and, for the first time, under the Law Enforcement Directive (LED).

Formal adoption of these decisions will ensure that personal data can continue to flow freely between the UK and EU for a first period of four years. On 28 June 2021, these decisions were approved by the EU Commission. This agreement was reached just a couple of days before the ‘bridging mechanism’ agreed alongside the Trade and Cooperation Agreement expired, which comes as a relief to businesses as additional legal measures are no longer required to transfer personal data.

The European Commission have formally adopted two decisions:

However, the adequacy decision currently excludes transfers of data for the purpose of UK immigration control. The commission will reassess their position on this once UK law become clearer.

Actions businesses need to take:

Given that the decisions are formally adopted, there is no action for businesses to take, however, the decision around immigration control will need to be monitored.

Webinars

Members are still able to access the ‘Preparing for Brexit’ series of webinars through the members area. While we plan and deliver a new series of ‘Managing Brexit’ webinars, the previous webinar on Ensuring Legal Data Flows still contains some useful insight into what adequacy means, and why it’s important for businesses.

National Security and Defence

What has been negotiated?

A security partnership establishes a new framework for law enforcement and judicial cooperation in criminal and civil law matters. Foreign policy, external security and defence cooperation is not covered by the agreement.

The agreement allows for continued cooperation between the UK and EU’s law enforcement and judicial authorities and both sides will continue to share criminal data such as DNA and fingerprints, as well as continuing to transfer Passenger Name Record (PNR) data.

There is agreement to establish regular dialogue in order to exchange information on policy developments, including in relation to international security, security of emerging technologies, internet governance, cybersecurity, cyber defence and cybercrime.

Actions businesses need to take

At this stage it is not clear what businesses will be required to do, if anything, linked to this area of the agreement. We will update this area as soon as the government publishes new guidance for business. Please continue to check back for updates.

EU Programmes and R&D

View our *NEW* dedicated page on EU funding programmes and R&D.

The UK and EU have agreed that the UK can continue to participate in some EU funded programmes on the basis that the UK pays into the schemes. This will enable the UK access to Horizon Europe, Copernicus and the EU’s Satellite Surveillance and Tracking (SST) services.

Given the agreement does not cover defence, there is no agreement on future collaboration and cooperation in relation to the European Defence Agency and European Defence Fund.

Workforce and Mobility

What has been negotiated?

The agreement covers provisions for temporary entry for work purposes with visa-free, short term business trips permitted for specific purposes. These include attending meetings, training seminars, trade fairs, purchasing goods or services and taking orders or negotiating the supply of services or goods. Short term business visits will be limited to 90 days in any 180-day period.

The agreement also allows for work trips for establishment purposes (setting up a company), intra-company transfers, to fulfil a contract to provide services lasting no longer than 12 months and for self-employed people providing services.

The agreement does not include mutual recognition of professional qualifications, but this could be agreed in the future. The UK is also able to negotiate this on a bilateral basis with EU member states, such as with a recent decision that allows UK solicitors to continue advising on English and international law in France as ‘foreign legal consultants’. It’s also important to note that the Withdrawal Agreement protects the mutual recognition of professional qualifications of UK citizens living in the EU, and EU citizens living in the UK, before the end of the transition period.

Actions businesses need to take:

The UK has protected the rights of EU citizens in already in the UK before the end of the transition period. If members of your workforce are EU citizens, they should apply for Settled Status by 30 June 2021.

The Government have provided guidance on Frontier Workers Rights in the UK. A frontier worker is an EU, European Economic Area (EEA) or Swiss citizen who is employed or self-employed in the UK but living elsewhere. Members should familiarise themselves with this guidance to determine the status of their workers and any permits they may need to apply for.

The Government has published guidance on visa requirements for the EU and on providing services and travelling for business in the EU.