2020 was such a challenging year that many concerns fell by the wayside. One such set of issues were preparations for Brexit, which would surely have received more attention in a less dramatic year. Now, though, the transition period is almost over and Brexit day itself draws near. It's time to give more thought to what the commercial sector needs to do to prepare for and react to the change.

Brexit has wide-reaching implications for an enormous number of businesses. There is bound to be an impact of Brexit on UK companies. They need to consider how the change will impact the movement of goods and services to and from the European Union. EU businesses need to consider similar issues affecting their own trade with partners and customers in the UK. Manufacturers and retailers should be particularly concerned with Brexit, as it will undoubtedly affect the flow of both supplies and components as well as finished goods and services that are delivered across borders. Whether your business is a giant or a small start-up, you must carefully consider how Brexit is going to change your operation. These matters impact small businesses and in turn even things like the Henderson smaller companies trust share price

The effects of Brexit can reach even further into otherwise-unaffected industries because it has the potential to affect any commercial contract that involves the UK and the EU. The United Kingdom's transition period for Brexit comes to an end on December 31st, 2020, regardless of what deals and agreements may be struck before the deadline. That means the time to consider Brexit's impact on your business's contractual relationships is now.

Brexit: The Core Concerns

Although the specifics of Brexit's impact will vary from industry to industry and company to company, we will all see clear alterations in the way we do business. Our team has taken a wide perspective to gather some fundamental and practical advice that can help your business prepare for post-Brexit operations no matter what industry you work in.

How Contracts Refer To The EU

Any commercial contract that mentions the EU (in establishing zones of exclusivity or defining selling rights, for instance) may unintentionally change the way that contract treats the UK after the nation leaves the EU. An area of exclusivity that is contractually defined by referring to the EU may, contrary to the parties' intentions, exclude the UK after the changeover. This is why companies need to carefully examine the way their contracts address geographic scope before Brexit. Any territorial definitions which rely on referring to the EU or EEA may need to be updated. Intellectual property licenses, non-compete clauses, and agreements for franchising, distribution, and agency may all be affected. Contracts should be updated by either including a dated reference to EU membership at the time the agreement was signed or by making express, separate reference to the UK. In many cases, a formal variation will be required to amend the contract properly.

Supply Chain Concerns

The withdrawal of the UK from the Union means that customs procedures once again have to be considered when goods are moved between the EU and the UK. Many existing contracts do not address compliance responsibilities and liability for customs requirements. Your company may need to develop new plans for addressing its export and import responsibilities. Will you need to handle these responsibilities on your own, or will they be shared with contractual partners? Most importantly, you should apply now for an Economic Operator Registration and Identification number. This will be essential for moving goods between Europe and the UK after Brexit.

Tariffs

Once the transition period is over, tariffs may apply to goods and services supplied across the border. Businesses should make a careful study of how such tariffs will be calculated, investigate ways of reducing tariff costs, and which parties in contractual relationships will be responsible for tariff expenses. Depending on the severity of tariffs, it may be useful or even necessary to seek alternate sources of goods and services within your business's country of origin.

Businesses that supply other businesses or individual consumers need to be ready to factor tariff costs into their quotes. If your business intends to pass tariff costs wholly or partially on to your customers, make sure that your quotes make it clear that you are doing so.

Tariffs should be another factor considered when reviewing existing contracts. Establish, if possible, which parties are responsible for changes in tariff costs and consider if the existing arrangement should be altered. Depending on how extensive tariffs are, how contracts address them could have serious ramifications for one or more parties.

Currency Exchange Rates

It is likely, if not certain, that Brexit will continue to affect exchange rates as it has done ever since it became a possibility. Exchange rate volatility increased sharply immediately following the June 2016 referendum, with the Pound losing ground against both the Euro and the US dollar. You need to be aware of how changes in the exchange rate may impact your business going forward and even property rpices if buying from abroad according to this online estate agents. How are your existing contracts affected? Is your business exposed to undue risk? Do you need to revise existing contracts and/or update new ones? As with most Brexit concerns, remember to examine exchange rate fluctuation in the context of which party or parties are responsible for absorbing costs.

Delays

Brexit will introduce extensive customs checks on goods entering and leaving the UK. This means that the movement of goods will inevitably slow down. You need to examine your business's supply chain and consider how customs delays will impact your operations. Where does the liability lie? If your suppliers can no longer meet your needs in a timely fashion, what alternatives are open to you. You should consider these areas in particular:

* How time-sensitive is the delivery of a given supply or product?

* Will customs delays result in liquidated damages and/or service credits?

* What liabilities is your business exposed to?

* Will customs delays make termination rights applicable?

Data Security

Data protection has been an increasingly visible concern as the end of the transition approaches. Contractual arrangements covering data protection need to be reviewed. UK businesses that receive personal data from EEA states, in particular, need to consider revisions to their procedures to ensure that they remain compliant with all applicable regulations. Follow this link for additional information on data protection arrangements.