Brexit and Digital Assets
On 10th January 2023, UNIDROIT, the International Institute for the Unification of Private Law, announced a consultation on its Draft Principles and Commentary on Digital Assets and Private Law. UNIDROIT suggests that all states adopt legislation consistent with the principles, to increase the predictability of digital transactions in their own state and in cross-border transactions.
The 19 principles concerned address issues including:
- The definition of digital assets and related concepts such as transfer
- How to determine the applicable law for proprietary issues in relation to digital assets
- The rights of innocent acquirers
- The concept of custody (such as where a trading platform facilitates trades of digital assets between users using a hosted wallet), the duties owed by a custodian to its client and the consequences of insolvency of the custodian
- The granting of security over digital assets, making security effective against third parties, and the priority and enforcement of security rights and
- The relationship between the principles and other laws including national procedural law
The principles only cover private law issues and, in particular, proprietary rights. Regulatory, intellectual property and consumer protection issues are out of scope.
The deadline for responses to the consultation was 20 February 2023. The Law Commission of England and Wales’s consultation on its Digital Assets paper closed on 4 November 2022.
The EU has also been busy in matters digital and, on 23 January 2023, a European Declaration on Digital Rights and Principles for the Digital Decade was published in the Official Journal of the EU.
The EU Declaration aims to:
- Support solidarity and inclusion through connectivity and education, foster participation in the digital public space, increase safety in the digital environment, and promote sustainability
- Help with fulfilling the objectives of the 2030 Digital Compass, adopted on 9 March 2021 and
- Guide the concrete work on the Digital Decade Policy Programme, launched on 15 September 2021
There is a lot happening in the development of laws in the digital space in the post-Brexit era.
Brexit and ChatGPT (Chat Generative Pre-Trained Transformer)
ChatGPT (a so-called chatbot developed by OpenAI) was launched on 30th November 2022 and has taken the tech world by storm.
This includes the world of “law ops” (tech – supported law document generation and other law operations supported by tech tools).
In an article by journalist, Danny Fortson, for The Sunday Times on 12th February 2023, entitled “AI [Artificial Intelligence] will change our lives”, Mr Fortson quoted Josh Browder, the British founder of “robot lawyer” start-up DoNotPay, as predicting that the day when lawyers become an “obscure profession” is closer than one thinks, due to the leap in AI capabilities. According to the article, Mr Browder said that “the average person won’t need a lawyer ever. We won’t even know what a lawyer is”.
Lawyers may still be needed for some things, however, because, as an article by journalist Jess Jones in City AM on 14th February 2023 points out, AI in general (and perhaps ChatGPT in particular) raises lots of legal issues, particular in the context of regulatory law.
Furthermore, on 15th February 2023, the Law Society of England & Wales Gazette reported that the “magic circle” law firm, Allen & Overy, is integrating Harvey, the AI platform built on a version of Open AI models enhanced for legal work, into its global practice.
Food for thought in the post-Brexit era when legal technology might soon reduce a lot of the barriers between peoples in the generation of legal documents and the handling of cases.
Brexit and Denmark
Denmark and the UK have a long-standing close relationship, both politically and economically. It is not surprising, therefore, that that relationship has to some extent been affected by Brexit.
On 24th February 2023, the European Commission announced that, under EU State aid rules, it had approved two Danish schemes totalling around €118 million (DKK 880.8 million) to support the Danish fishery, fish processing and wholesale sectors affected by the effects of the withdrawal of the UK from the EU.
Both schemes are due to run until 31st December 2023 and are planned to be financed under the Brexit Adjustment Reserve, established to mitigate the economic and social impact of Brexit, subject to approval under the terms of that Reserve.
This EU Commission announcement gives an opportunity to focus on the wider aspects of UK–Denmark trade and investment post-Brexit.
According to a UK Department for International Trade (DIT) factsheet published on 17th February 2023, the total trade in goods and Services (exports plus imports) between the UK and Denmark was £15.4 billion, in current prices, in the four quarters to the end of Quarter 3 (Q3) 2022, an increase of 7.8% or £1.1 billion from the four quarters to the end of Q3 2021. Of this £15.4 billion:
- Total UK exports to Denmark amounted to £7.9 billion, in current prices, in the four quarters to the end of Q3 2022 (an increase of 19.1% or £1.3 billion compared to the four quarters to the end of Q3 2021) and
- Total UK imports from Denmark amounted to £7.6 billion, in current prices, in the four quarters to the end of Q3 2022 (a decrease of 1.8% or £140 million compared to the four quarters to the end of Q3 2021)
The DIT factsheet showed that Denmark was the UK’s 23rd largest trading partner in the four quarters to the end of Q3 2022 accounting for 0.9% of total UK trade.
According to the DIT factsheet, in 2021, the outward stock of foreign direct investment (FDI) from the UK in Denmark was £6.5 billion accounting for 0.4% of the total UK outward FDI stock and, in the same year, the inward stock of FDI in the UK from Denmark was £7.6 billion accounting for 0.4% of the total UK inward FDI stock.
This is an important trade and investment relationship, which seems to be recovering from the disruptions of Brexit!
On a more personal level, in a notice on its website entitled “How does Brexit affect you?”, the Danish Ministry of Foreign Affairs states “Denmark greatly appreciates the British citizens who have chosen to live in Denmark and contribute to Danish society”.
In turn, the UK Government website states that “we work with Denmark for a positive European future, building economic growth and trade. We improve the strong relationship between our countries, and work together to reduce global conflict, increase trade and investment, and to beat threats to our national security”.
Denmark is the setting for one of Shakespeare’s greatest plays, Hamlet, and one of the most famous quotes from that play is “We know what we are, but know not what we may be”. Perhaps, this is a metaphor for the relationship between the UK and Denmark in the post-Brexit era.
We shall see!
Brexit and the Windsor Framework
On 27th February 2023, the UK Government and the EU Commission announced the new Windsor Framework which, subject to the necessary approvals from both sides, is intended to amend and/or replace the now somewhat infamous Northern Ireland Protocol on the post- Brexit Northern Ireland- Great Britain–EU trade and investment relationship.
According to UK Government press release, the Windsor Framework delivers on three main objectives:-
- The Windsor Framework delivers free-flowing movement of goods between Northern Ireland and Great Britain and removes any sense of a border in the Irish Sea within the UK
- The Windsor Framework protects Northern Ireland’s place in the Union [of the UK] and
- The Windsor Framework safeguards sovereignty and fixes the democratic deficit by putting the people of Northern Ireland in charge
Some new terminology has been introduced into the lexicon of Brexit by the Windsor Framework, including the so-called “Stormont Brake” which, according to the UK Government press release, means that “the democratically elected Northern Ireland Assembly can oppose new EU goods rules that would have significant and lasting effects on everyday lives in Northern Ireland”.
Evidencing that the Windsor Framework is really quite far-reaching, the UK government has published sector ”explainers” on a variety of subjects:
- A Food Retail Green Lane
- Goods moving from Northern Ireland (NI) to Great Britain (GB)
- Goods moving GB-NI – Green Lane
- Human Medicines
- VAT and Excise
The Windsor Framework will be reviewed by interested stakeholders but there is no doubt as to how The Times feels about the new deal. Its leader editorial on the Windsor Framework on 28th February 2023 has the strapline “Rishi Sunak’s new deal on the Northern Irish protocol is a remarkable political achievement that delivers real benefits and deserves the widest possible support”.
According to The Times in its editorial, “After nearly seven years of political turmoil, it is Mr Sunak who looks destined to be the prime minister that finally got Brexit done”.
Many would hope that this thought is the father to the deed!