Britain urges businesses to prepare for end of Brexit transition

BRITAIN today urged businesses to prepare for Brexit, just days before a transition period designed to smooth the UK’s departure from the European Union (EU) comes to an end, as many of the changes they needed to make would apply regardless of the outcome of the talks.

Britain and the EU clinched a trade deal on Thursday – one which preserves zero-tariff and zero-quota access to the bloc’s single market but which will still cause disruption.

The transition period, under which Britain stayed aligned to the EU’s trading and regulatory rules, ends at 2300 GMT on Dec 31.

The British government said that businesses needed to understand new rules on importing and exporting goods between the EU and Great Britain, and the different rules that apply to trade with Northern Ireland.

“The deal is done, but with big change comes challenge and opportunity,” cabinet office minister Michael Gove said in a statement, adding that businesses need to adjust to Britain’s departure from the EU Single Market and Customs Union.

“There are practical and procedural changes that businesses and citizens need to get ready for, and time to make these final preparations is very short.”

The transition period was initially agreed to keep existing trade ties unchanged for 21 months after the original planned Brexit date of March 29, 2019.

But the period was not extended after Brexit was delayed until Jan 31, 2020, and, with over 1,000 pages of trade agreement published in full on Saturday, businesses have less than a week to adjust to the new rules.

Businesses will also need to make customs declarations on EU trade, while hauliers need a permit to go to ports in the county of Kent or risk a fine.

A chance to do financial services differently

Brexit offers Britain a chance to do things differently in financial services, the country’s finance minister Rishi Sunak said on Sunday, but it will co-operate with the European Union on an approach to the sector despite little detail on the topic in its trade deal.

From Jan 1, British-based financial services groups lose automatic access to the EU’s single market, and both sides have said new market access must be negotiated outside the trade agreement in specific equivalence deals.

“Now that we’ve left the EU, we can do things a bit differently (in terms of financial services),” Sunak told broadcasters.

Britain and the EU clinched a trade deal on Thursday, but Prime Minister Boris Johnson has admitted it is an accord which does not have as much as he would have liked about the financial services sector and regulatory equivalence.

Under a system known as equivalence, access to EU markets will not be granted to banks, insurers and other financial firms based in Britain unless their home rules are deemed by Brussels to be “equivalent”, or as robust as regulations in the bloc.

The two sides will aim to agree a memorandum of understanding on regulatory cooperation in financial services by March 2021, and Sunak said that such language should provide reassurance.

“This deal also provides reassurance because there’s a stable regulatory co-operative framework mentioned in the deal,” he said.

“I think (that) will give people that reassurance that we will remain in close dialogue with our European partners when it comes to things like equivalence decisions.” – Dec 28, 2020

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