Do Your M&A Before Exit Day, Companies Told: Brexit Update
(Bloomberg) -- The U.K. issued another batch of papers on its preparations for a no-deal Brexit. Highlights include a warning to companies to get mergers done before exit day, and a further call to drugmakers to stockpile.
On Cross-Border Trains (2:35 p.m.)
While the bulk of U.K. rail services are domestic and wouldn’t be affected by a no-deal Brexit, new bilateral arrangements are being sought to allow the continuation of cross-border trains to France, Belgium, the Netherlands and Ireland.
Britain would continue to recognize foreign-issued operating licenses and safety certificates for two years after Brexit, the government said, but U.K. companies operating in the EU would need to reapply for permits.
To maximize flexibility, the U.K. wouldn’t seek participation in the EU Agency for Railways, which regulates safety and interoperability, but companies would be encouraged to cooperate at a technical level.
More on Qualifications (1:52 p.m.)
British auditors may find EU countries no longer recognize their qualifications in a no-deal Brexit scenario. Auditors with EU qualifications can apply for those qualifications to be recognized in the U.K. until the end of Dec. 2020.
U.K. companies listed on an EU market may have to give listing authorities extra assurance that their accounts comply with financial reporting standards. And U.K. businesses with EU branches will have to comply with accounting and reporting requirements in the EU member state where they operate.
Red Tape for Horses - and Their Breeders (1:50 p.m.)
No deal could be a headache for horse breeders and trainers.
Without a divorce agreement, it may not be possible to transport horses to countries in the EU -- for example Ireland -- unless the bloc allows the U.K. to become a listed third country on the day it leaves. Even if it gets that status, horses would need ID and health documents to travel.
Dublin Tempers Breakthrough Expectations (1:40 p.m.)
Ireland’s Foreign Minister Simon Coveney sought to play down expectations of an imminent breakthrough in negotiations, continuing a theme he set out Thursday. Speaking to RTE radio, he said optimistic reports were “not well founded,” and underlined again that a deal hasn’t been done and “a lot of work” remains. Once again, he re-iterated that Northern Ireland’s Democratic Unionist Party shouldn’t be allowed to veto progress.
Meanwhile Nigel Dodds, the DUP’s leader at Westminster, tweeted that any backstop should be “time limited.” Still, some could see a chink of light in that Dodds doesn’t seem to wholly reject the concept of a backstop.
Businesses May Need to Restructure (1:35 p.m.)
Previous releases of the U.K.’s no-deal papers have already shown businesses face more red tape in the event of Britain tumbling out of the bloc. But the government said Friday British companies operating in the EU may need to restructure in order to continue their business.
Companies undertaking cross-border mergers were also advised to complete them before Brexit or face them not being recognized in the EU, and British citizens may have to meet additional nationality or residency requirements in order to run businesses in the EU.
Companies that operate across the border with the EU were advised that they’ll continue to have a “functioning regulatory regime” in Britain in the event of a no-deal Brexit, and that “as far as possible, the same laws and rules that are currently in place continue to apply.”
Companies outside the EU that operate in Britain were also advised they’ll be treated the same as currently.
No-Deal Warning to Lawyers, Professionals (1:28 p.m.)
Professional qualifications from other European Economic Area nations will no longer be recognized in the U.K. in the event of a no-deal Brexit, the government said. That will affect lawyers, as there would be no reciprocal recognition.
Lawyers from the EEA would no longer be able to conduct proceedings in court on behalf of a client, carry out litigation, conveyancing, probate, notarial activities or the administration of oaths as they are reserved for advocates, barristers and solicitors from the home state.
They would not be allowed seek admission to the profession in England, Wales or Northern Ireland based on experience. The U.K. would also leave the SOLVIT dispute resolution service and will close its center.
Employees from U.K. businesses might need visas or work permits to provide services to clients within the EEA countries.
U.K. Faces Rush to Replicate Trade Deals (1:23 p.m.)
If there’s no deal, there’s no transition period. That means the government will have to rush to replicate the free-trade deals with other countries whose benefits it now enjoys via its EU membership. Meanwhile, it will trade on World Trade Organization terms.
“The government will seek to bring into force bilateral U.K.-third country agreements from exit day,” it said. “Where arrangements to maintain particular preferences in a no-deal scenario are not in place by exit day, trade would take place on WTO terms.”
Drugmakers Told to Stockpile for Trials (1:20 p.m.)
The government warned drugmakers to stockpile experimental treatments coming from EU nations in case of possible border delays to prevent the ruining of clinical trials.
“It may be necessary to start making any contingency arrangements ahead of the 29th March 2019 to provide assurance to trial participants and for the trials,” it said.
No-Deal Brexit Threat to Markets ‘on EU Radar’ (1:15 p.m.)
The threats that a no-deal Brexit could pose to financial markets are “clearly on our radar,” Valdis Dombrovskis, vice president of the European Commission in charge of financial services policy, told Bloomberg TV. The commission is waiting for a report on Brexit risks from a working group formed by the European Central Bank and the Bank of England, he said.
May Rules Out Permanent Backstop (12:15 p.m.)
Prime Minister Theresa May would never agree to a Brexit deal that left the U.K. permanently tied to the so-called Irish backstop, her spokeswoman Alison Donnelly told reporters.
The premier’s position is that the backstop -- a legal guarantee to ensure the Irish border remains all but invisible after Brexit -- must be temporary until the U.K.’s future relationship with the European Union is set, she said. The government wants that to be by the end of 2021 at the latest.
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