Brexit update: Governance, financial services & IP rights

By June 30, 2020News

Here is a selection of articles on Brexit-related developments:-

Brexit and Governance

One of the main sticking points in discussions between the UK and the EU for a new post-Brexit UK-EU relationship following the end of the transition period is the issue of Governance and in particular the role (if any) that the Court of Justice of the European Union (CJEU) is to have in determining any disputes over EU law arising from any new post-Brexit UK-EU deal.

The EU side is clear that the CJEU must have such a role and indeed that the EU could be in breach of EU law if it entered into a deal with the UK which did not provide for the right of the CJEU to decide upon matters of the interpretation of EU law. The UK side is equally clear that, just like in many other trade deals into which the UK has entered, there is no need to include such a provision and that the usual arrangements for dispute resolution, including binding arbitration, should apply.

The UK House of Commons Library has published a research report on 19th June 2020, which analyses the positions of the two sides in their negotiations so far on governance issues, including with regard to the CJEU, and in particular points up the wish for the EU to have a single overarching agreement on all major post-Brexit UK-EU relationship issues as contrasted with the wish on the part of the UK side to have at least 10 separate agreements on key issues so that breakdown between the parties in one area should not automatically penalise them in other areas. The report concludes by saying that time is running short for sorting out these issues if a deal is to be reached between the UK and the EU during the transition period on the basis for their new post-Brexit relationship.

Brexit and Financial Services

On 23rd June 2020, the UK House of Commons published a written statement from the UK Chancellor of the Exchequer, Rishi Sunak, explaining the UK approach towards implementing financial services regulation following the end of the transition period.

In his written statement, Mr Sunak explained that, taking full account of the need for the UK to maintain the highest standards of financial services regulation, there is, nevertheless, a need to customise regulation for the UK market, bearing in mind that the EU will inevitably go its own way in financial services regulation without taking into account the UK’s specific interests. The statement then goes on to deal with Solvency II (the EU Solvency II Directive, which the UK will be reviewing so as to take account of the structural features of the UK insurance sector), CSDR (the EU’s new settlement discipline regime, which the UK will not be implementing), SFTR (an EU reporting obligation for non-financial counterparties, which the UK will not be implementing),  the EMIR Refit Regulation (an EU regulation amending EMIR, which the UK will effectively be adopting), BMR (the EU Benchmarks Regulation, which the UK will be modifying for use in the UK), MAR (the EU Market Abuse Regulation, which the UK will be modifying for use in the UK) and PRIIPS (the UK’s packaged retail and insurance-based investments products regime, which the UK will be upgrading).

The UK’s proposals seem to be in line with UK’s support for “equivalence” in the financial services sector post-Brexit as between the UK and the EU but it is unclear whether they meet the EU’s requirement for a “level playing field” in that sector.

Brexit and Intellectual Property Rights

The European Commission has published Notices to Stakeholders on EU trade marks and community designs and separately on copyright and related rights pointing out the changes that will take place in the availability and enforceability of those rights following the expiry of the transition period and in the event of a “no deal” between the UK and the EU on their post-transition period relationship. It seems that UK nationals (without a habitual residence in the EU) and UK-registered businesses will no longer be able to get a number of those rights (eg the so-called “sui generis” database right for EU databases under the EU Database Directive – similarly, EU nationals and businesses would no longer be entitled under EU law to get a “sui generis “ database right for UK databases).

On 26th June 2020 the UK Government published details on its website of changes to international trade mark registrations, EU protected designs and EU and international designs, taking effect after the end of the transition period and generally confirming that comparable UK rights would immediately and automatically apply in place of the corresponding EU rights with respect to the UK after the end of the transition period but that in some cases steps would need to be taken to assert those rights and/or opt out of those rights as required by the rights-holders concerned. This is a technical and complex area of law and merits close study to make sure that rights are not inadvertently lost or compromised.

The  impact of Brexit on intellectual property rights is perhaps one of the most significant consequences of Brexit.

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