By Shane Barber
It might take time for the effects of the UK’s historic Brexit vote to take hold but Australian businesses that do, or plan to do, business in Europe need to frame future plans with the UK’s exit from the European Union in mind.
The fine print will take some time to finalise but it’s worth starting some audits immediately to uncover your company’s exposure to the Brexit.
Once Brexit takes effect it will have an impact on the free movement of goods, services and employees across Europe. Where are your European distributors and warehouses based? Will that be a problem post Brexit? Is there the opportunity to streamline European distribution ahead of the pack?
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Companies with operations in Europe should also consider a workforce audit to determine where their employees work in Europe and their immigration status. It would be timely to review employment contracts and policies, and identify any potential problems well ahead of the separation.
When it comes to planned mergers, cross border mergers between UK and EU organisations will be more complicated after the separation and this needs to be considered when timetabling takeovers.
It’s also worth reviewing existing or draft contracts which refer to “Europe” as a single entity; in the future companies may need to have separate agreements for the EU and the UK. Also do contracts which are Europe-wide need to be renegotiated if the value of that contract is diminished by the Brexit? The territorial scope of contracts may require a UK carve out.
Digital businesses meanwhile need to pay careful attention to the potential impact of Brexit on the European Digital Single Market and data transfer regulations. Even after Brexit, any UK company doing business with Europe will have to comply with the General Data Protection Regulation expected to come into force in 2018.
But once Brexit is achieved UK organisations will no longer have automatic private data transfer rights in Europe and will need to apply for approval from the European Commission injecting additional red tape and potential costs and complications. This will also have implications for companies considering locating data centres or cloud computing in the UK after the Brexit.
Another potentially vexed issue is that of intellectual property, and the likely introduction of new IP legislation into Scots and English law. At the same time there is potentially going to be a delay in the implementation of the Unified Patent Court as the UK separates from the EU.
An IP audit now will give organisations time to identify which IP could be at risk and leave time to arrange for further IP applications and registration to assure protection until and beyond Brexit.
Yes, this could take two years to play out. Proper planning now could save time and tears in the future.
Shane Barber is the managing partner of Bird & Bird in Australia.
This article was first published on SmartCompany.