Trade and Investment (post-Brexit) Blog September 2023

Brexit and the UK’s Retained EU Law (Revocation and Reform) Act 2023 (“the Act”)

 On 28th July 2023, the UK’s House of Commons Library published a research briefing on the Act, which summarises the legislative and policy background to the Act and provides an overview of its main provisions. It includes helpful explanations of:

  • The sunset provisions which provide the main framework for the expiry or “sunsetting” of retained EU law (REUL) at the end of 2023, and the UK Government’s change in approach to sunsetting during the Bill’s passage through Parliament.
  • The assimilation provisions which remove EU law and concepts and terminology from domestic law after2023. At the end of 2023, REUL will be renamed assimilated law, although the briefing notes that this change is symbolic , rather than of practical consequence, and that the name given to this body of law will have no effect on its legal status. As regards the repeal of the general principles of EU law, the briefing observes that it is not clear what principles the courts will be expected to use instead of the retained general principles of EU law, when construing the meaning and effect of assimilated law. UK common law principles party overlap with EU general principles, and would likely need to adapt to fill any gaps.
  • The interpretation provisions which deal with the validity, hierarchy, meaning and effect of REUL and assimilated law.
  • The scrutiny provisions which make it easier for the UK Government to amend or revoke retained direct principal EU legislation and section 4 REUL using ordinary powers to amend secondary legislation, and which remove the additional parliamentary scrutiny procedures that used to apply when ministers modified or revoked statutory instruments that were originally made under section 2(2) of the European Communities Act 1972; and
  • The main delegated powers which enable REUL to be restated, revoked, replaced or updated by regulations.

Interesting times!


Brexit and the Crisis of Democracy in Western Societies

 The UK, France, the US, Israel and a number of other Western democracies have recently undergone or are undergoing constitutional crises where the fundamental  credentials of democracy  have seemed to be under challenge.

What can be done to prevent schism and to promote harmony?

Perhaps the Cour de Cassation system in France provides at least a partial answer. The Cour de Cassation is the supreme court for civil and criminal cases in France. It is one of France’s four constitutional guardians, along with the Council of State, the Constitutional Council and the Jurisdictional Disputes Tribunal. One of its roles is to filter out appeals challenging the constitutionality of statutes before forwarding them on to the Constitutional Council  for review. The Court has played a role in holding together a sometimes turbulent people.

The UK’s two Houses of Parliament ( not to mention the Courts and the Executive)  were stretched to the limit during the Brexit crisis leading from the Referendum in June 2016 to Brexit itself in January 2020 and the transitional period ending on 31st December 2020 and one wonders how these ancient institutions would cope with further assaults on their integrity. A constitutional court for the UK with its own developing case law  ( which is something different from a more generally focused Supreme Court)  might be a way forward to ease political tensions. – although taking an idea from the French might not be the most popular way forward in some quarters!

The French political thinker, Montesquieu, was a great exponent of the doctrine of the separation of powers – a doctrine designed to ensure that no one organ of state becomes too powerful –  but it is also said that in his views he was influenced by the earlier  English political philosopher, John Locke. Perhaps, therefore, there is room  to believe that taking the best of political theory from both countries is one of the solutions to help solve current constitutional crises in Western democracies.

Strange times!


Brexit and Finland

 Finland shares with the UK the sturdy independence of spirit that has long characterised both nations, albeit from different vantage points on the Northern edge of Europe. Finland’s proximity to Russia and the UK’s proximity to the Atlantic have perhaps marked the differences between them culminating in the UK’s Brexit – the UK embraces the West  beyond the EU , whereas Finland sees comfort in being part of the EU.

The trade relations between the two countries seem encouraging, as the trade and investment factsheet published by the UK’s Department for Business and Trade (DBT) on 1st August 2023 shows. According to that factsheet, total trade in goods and services ( exports plus imports) between the UK and Finland was £8.0 billion in the four quarters to the end of Quarter 1 (Q1) 2023, an increase of 44.9% or £2.5 billion in current prices from the four quarters to the end of Q1 2022. Of this £8.0 billion:

  • Total UK exports to Finland amounted to £3.4 billion in the four quarters to the end of Q1 2023 ( an increase of 36.7% or £902 million in current prices, compared to the four quarters to the end of Q1 2022);and
  • Total UK imports from Finland amounted to £4.6 billion in the four quarters to the end of Q1 2023 ( an increase of 51.6% or £1.6 billion in current prices, compared to the four quarters to the end of Q1 2022).

The DBT factsheet also showed that that Finland was the UK’s 36th largest trading partner in the four quarters to the end of QI 2023, accounting for 0.5% of total UK trade.

On the investment side, the factsheet showed that, in 2021, the outward stock of foreign direct investment (FDI) from the UK in Finland was £9.5 billion accounting for 0.5% of the total UK outward FDI stock and that, in the same year, the inward stock of FDI in the UK from Finland was £480 million.

Jean Sibelius is arguably the most famous Finnish classical composer and his popularity amongst classical music fans in the UK is but one aspect of the ties that bind the two countries.

Finland‘s admission to NATO on 4th April 2023 is another link between the two countries.

The UK-Finland relationship continues to grow!


Brexit and CMA Final Guidance on Horizontal Agreements

 On 16th August 2023, the UK’s Competition and Markets Authority (CMA) published the final version of its guidance on the application of the Chapter I prohibition of the UK’s Competition Act 1998 to horizontal agreements.

The guidance is relevant to both existing and new horizontal agreements and replaces in the UK the European Commission’s guidance on horizontal co-operation agreements. It explains ( amongst other things) the application of the horizontal block exemptions set out in the UK’s Competition Act 1998 ( Specialisation Agreements Block Exemption) Order 2022 (SI 2022/ 1272) and the Competition Act 1998 ( Research and Development Agreements Block Exemption) Order 2022 (SI 2022/1271), which entered into force on 1st January 2023.

The guidance also explains the application of the Chapter I prohibition to R & D and production agreements that fall outside the block exemptions, as well as other common types of horizontal agreement (including purchasing agreements, commercialisation agreements, information agreements, standardisation agreements and standard terms), including when they are likely to breach competition law and when they are likely to benefit from an individual exemption.

The application of the Chapter I prohibition to agreements relating to environmental sustainability will be the subject of separate guidance which should be read alongside this guidance where a horizontal agreement relates to environmental sustainability . The CMA consulted on draft guidance on the application of competition law to sustainability agreements in February 2023.

The UK  permits individual exemptions from the Chapter I  prohibition, under section 9 of the Competition 1998, but ( like the EU’s similar legislation under Article 101 (3) of Treaty  on the Functioning of the EU) the conditions for the exemption have to be proven by the claimant at the time of investigation rather than applied for in advance because the advance clearance procedure was abolished in the UK  ( and also in the EU) in 2004 as a cost-saving measure. The guidance issued by the CMA ( and similarly guidance issued by the EU) is therefore particularly important.

Changing times!

David Glass is a Specialist in Business & Corporate, Commercial Contracts & Insolvency & Corporate Recovery

Disclaimer: Nothing in the Legal Insights section and this blog is intended to provide legal or other professional advice and, if readers are interested, they should consider taking separate legal or other professional advice accordingly.