28 February, 2019

Hard Brexit may occur within a month

For just another month, the United Kingdom (UK) has a chance to ratify the agreement with the EU. If the agreement does not occur, UK will become a third country for the European Union, and it will no longer be subject to EU law. Companies that have either imported or exported from the UK will again be burdened with customs duties and different tax payments. Also the rules for registration and payment of VAT will be changed; declarations which are required for movement of goods across the UK will have to be submitted for customs clearance; prohibitions and restrictions of goods entering from the UK in the EU may be introduced; authorisations by authorized economic operators in the UK will no longer be valid in the EU, etc. In case of hard Brexit, it also means that the UK will no longer be in the SEPA area, which means payment under the same basic conditions as in the EU; an open transaction account in the UK will be counted as an account opened abroad and not as in the EU; the European Company will cease to exist, as well as the European Payment Order.

Due to all of the above, there may be several disruptions in the operation with the UK, which would prevent companies from doing business as they have been accustomed so far, and therefore for normal business continuation and reduction of damage all such companies should also prepare until 29 March for possibility of hard Brexit.

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