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By Yasmine Lingemann

Belgians are big savers. According to recent figures released by the National Bank of Belgium (BNB), Belgians have reached a record high in average household savings, with figures reaching 290 billion euros in aggregate regulated savings accounts. On average, the household savings ratio in Belgium is 12.6%, which by comparison is just over double that of the UK, where households save 6.2% of their disposable income. Belgians have traditionally saved a lot, yet even in an era of zero or negative interest rates on savings, the lack of spending is beginning to become problematic and even a hinderance to the national economy.

Globally, the Coronavirus pandemic has hurt economies everywhere. With firms in the UK and Europe also having to simultaneously adapt and create contingency plans to prepare for the end of the Brexit transition, businesses face the situation where they need to use alternative methods to attract clients and re-establish confidence in their company. In Belgium, that means trying to encourage people to spend more and save less at the same time as rising unemployment, weakening job security, and people generally tightening their belts and restricting spending to the bare necessities.

Despite this, firms must not lose hope: Now is the time to seek new opportunities. Businesses are responding, many are offering their goods and services in a different way. In Belgium, where consumers have traditionally been less open to online commerce, increased time at home in front of a screen enables households to be more susceptible to e-commerce and advertising. Businesses must use this time to improve communication and dialogue with their clients to reestablish trust and retain brand loyalty. Getting active online and keeping your customer base up to date on changes will help businesses in the long run and hasten the adoption of a more digitalised economy.

Belgium government support has not been as forthcoming as in the UK. However there are a variety of loans and tax deferral schemes that have been put in place to weaken the damage felt by Belgian firms.

Click here for Belgium’s government website to see how your business can benefit from the support available: https://www.belgium.be/en

Here at the British Chamber of Commerce, we will continue to update you with the necessary information to help all our members to succeed. We are all in this together, and with the right plans in place, consumer confidence can be restored. BritCham offers support, guidance and specialised coverage for both Brexit and COVID-19, including webinars, workshops and events that will give your firm the tools it needs to navigate through this challenging period.

See our website here for more details on how we can help you: https://www.britishchamber.be/

The practical implications of Brexit on everyday UK-EU trade is becoming clearer week by week. This week, Amazon announced changes affecting Amazon sellers, customs briefings and enquiries ramped up, and the impact on product availability and businesses started to become evident. The detail is very welcome, and helps businesses prepare further. For some, the impact will be more difficult to manage and will effect consumer choice, price and availability.

The UK government’s publication of its border operating model provided traders and logistics operators with more detailed information on the requirements for UK exports and imports. While much of the overall approach was predictable, the details of the arrangements make clear the challenges that traders will have to adapt to, and the costs likely to be incurred.

This week, retail giant Amazon announced the end of Fulfilment by Amazon (FBA) for UK sellers delivering to customers in the single market (and vice-versa). Sellers will now have to divide their inventory between UK and EU-Based Fulfilment Centres to avoid losing sales in either market.

This will raise the cost of reaching customers through increased storage and transaction costs of shipping their goods to warehouses in both markets. With Amazon putting in transitional measures before 1st January 2021, sellers Christmas trade may be affected too.

As so often, it’s the detail that counts. The UK’s plan to introduce postponed VAT accounting will be a boon to the cashflow of UK importers. But some businesses are beginning to see additional unwelcome challenges. For example, fresh fruit and vegetables delivered by air from Africa to the UK and its Benelux neighbours are distributed across the region. Since these goods movements will now need phytosanitary checks at the entry point, the opening hours of phyto offices at ports and airports now become a critical factor in avoiding lengthy delays.

With the time for preparation now short, the UK government is stepping up its communications to businesses with webinars for Belgian and Irish firms this week and more to come.

With its network of expert members and the backup of its UK chambers, Britcham is there to help you. If you have questions, contact us at BusinessContinuity@britishchamber.eu

Glenn Vaughan – Senior Adviser

UK Govt – Border Operating Model: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/899991/200713_BPDG_-_Border_Operating_Model_FINAL_1320_edit.pdf

The UK Government has published its long awaited border operating model. It makes clear how the border with the EU will work – at least in most cases. But some important questions remain, and the cost to business, in customs administration work alone, will be substantial. The government has responded to some key demands from British Chambers of Commerce for measures to improve cash flow. But if there’s not a deal, the cost will be higher again – and key questions remain unanswered.

While businesses will welcome more detail on processes for trading goods overseas, some questions still remain unanswered, including on trade across the Northern Ireland border and the operation of the Goods Vehicle Management System. We will continue to look at the detail and how it affects businesses over the coming weeks.

The Border Operating Model provides clarity and certainty for the border industry and businesses, including technical detail on how the border with the EU will work after the transition period and the actions that traders, hauliers, ports and carriers need to take. It covers all of the processes and systems, across all government departments, that will be used at the border. It provides clarity on the end to end journey for moving goods across the border – with information about controlled goods and new government systems that will support trade.

To help businesses prepare for these changes and continue to trade, guides on how to import and export goods are available in the form of a ‘journey’ (see below). That’s important since so many UK based companies currently trade only with the EU. They need to clearly see every step they need to take to ensure that their goods are transported successfully.

This will cost businesses money. With full border controls in place at all ports from January 1st next year, regardless of any deal that is agreed with the EU, an estimated 200 million more customs declarations will need to be made by traders annually. At a cost of £20 to £45 per declaration the cost to business could be in the region of £4bn to £9bn.

The UK government has listened to the British Chamber network and reintroduced Postponed VAT Accounting, as well as allowing the deferment of duty and VAT on EU imports for at least 6 months from January 2020.   And many businesses will appreciate the introduction of bond-free duty deferment accounts, which will provide much needed help to cashflow for businesses and reduce import costs.

Along with the European Commission’s Communication last week on preparing for the end of the transition period, it’s clear firms that import and export across the UK-EU border should take action now including the appointment of customs intermediaries and addressing approvals and certifications.

With its network of expert members and the backup of its UK chambers, Britcham is there to help you. If you have questions, contact us at BusinessContinuity@britishchamber.eu

Glenn Vaughan – Senior Adviser

Hyperlinks also below.

UK Govt – Border Operating Model: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/899991/200713_BPDG_-_Border_Operating_Model_FINAL_1320_edit.pdf

How to import and export goods between Great Britain and the EU from 1 January 2021: https://www.gov.uk/government/publications/how-to-import-and-export-goods-between-great-britain-and-the-eu-from-1-january-2021

European Commission – Getting ready for the end of the transition period: https://ec.europa.eu/info/european-union-and-united-kingdom-forging-new-partnership/future-partnership/getting-ready-end-transition-period_en

Last week’s virtual summit of EU leaders discussed the proposal for a revised long term budget and EU Recovery Plan – put together by the Commission in double quick time. Much of the discussion between member states is inevitably informed by a calculation of who gets what and who pays, so it will not be easy or very quick. But the effectiveness of the EU response will really depend on how the money is spent and avoiding the temptation to create new barriers to business.

At the end of May 2020, the European Commission presented its proposal for a comprehensive reconstruction plan. 750 billion will be mobilised for the “Next Generation EU” action. In addition, the long-term EU budget 2021-2027 will be increased to a total of EUR 1.85 trillion.

The Commission says the plans will deliver resources at the scale and speed needed and focused on green and digital as engines of growth as well as increased resilience for Europe’s ‘open strategic autonomy’ model. It also emphasises the importance of avoiding fragmentation of the single market. Good to hear.

The package focuses mainly on cohesion and recovery along with a boost to Horizon Europe and more money for the planned Just Transition Fund for decarbonisation, and a new health program.

The biggest lump of cash – a new Recovery and Resilience Facility of €560 billion – will offer financial support for investments and reforms with a grant facility of up to €310 billion, and will be able to make up to €250 billion available in loans.

The scale and effectiveness of spending will be central, but it also needs broader global coordination. As pointed out by JBCE (Japan Business Council in Europe) recently, this is not just about the EU alone. So the EU’s response needs to be timely, but also coordinated wherever possible through multilateral and bilateral action. More important for the medium term, the EU’s openness to trade, ideas, innovation and people needs to be part of the answer.

The recovery plan will be based on a model of “open strategic autonomy” and there has been much made of the need to strengthen and diversify supply chains. While that’s undoubtedly true, there’s always a risk that the need to protect its people and companies can be used to push a protectionist agenda. 

That’s why it will remain important for business to make the case, loudly and persistently that recovery will be built on international cooperation and free and fair trade, as well as a vibrant single market and that Europe remains #Open4business

Glenn Vaughan – Senior Adviser

There are many outstanding issues still to be negotiated as part of the future relationship between the EU and the UK, however one area where there shouldn’t be much disagreement is over the British government request to join the Lugano Convention.

There should be an overwhelming interest for both sides to keep the existing relations in this field. The consequences would be severe and very negative for businesses and consumers on both sides of the Channel should there be no agreement to continue enforcement of civil and commercial judgments.

The Lugano Convention covers cross border enforcement of civil and commercial legal judgements. It applies between the EU and Switzerland, Norway and Iceland and sits alongside the Brussels 1 Regulation rules for the EU member states.

Although the UK will not be an EFTA member, the Convention is also open to non-members, such as the UK. In addition, the existing ETFA members (Norway, Iceland and Switzerland) have all supported the UK’s accession.

The decision to support the UK’s application should not be overly controversial. It eliminates the need for multiple legal actions in different countries, and the risk that companies can’t get their assets that are in other countries. As a result, the system significantly reduces the risk of doing business with someone in another country. Once a judgment is reached under the system, enforcement is rarely contested.

Without this system in place businesses will need to calculate for potentially multiple actions in different countries, especially in cases related to assets that are in another country.

Without Lugano accession enforcement of judgments will no longer happen automatically and the result is likely to lead to the other business party challenging the judgment. This can open up multiple issues, such as whether the compensation that the first court awarded is acceptable or whether the original judgment is questioned by the enforcing court. All substantive laws as to how disputes are settled are different from one European country to another and the Lugano/Brussels system is the only way to smooth these differences over and ensure that a pan-Continental dispute settlement system can work.

Most businesses aim to reduce these risks by agreeing choice of court clauses. Brussels I and Lugano reduce the risk further by setting the rules under which the choice of court clauses are respected by all. As national laws differ on this point, without the overarching framework, there is still the risk of litigation surrounding whether the choice of court clause that you have negotiated and expected to be able to rely on, is in fact valid.

If a business ends up in litigation, much more expense is needed to solve what are essentially procedural issues (such as whether you are in the right court that has the power to solve issue). Litigation also lasts longer as there are more complex issues to be solved. In addition, the end result can still be questioned by another court, costing businesses even more money.

This significantly raises the cost of doing business and this will often have bigger impact on SMEs. Smaller companies, without large legal departments, would have to budget for costs that have not existed in Europe since the 1970s, when the first Brussels convention came into force creating the system which is now applied throughout Europe.

Consumers on both sides of the channel also risk losing out, as under this system the legal system used is based on where the consumer is based, allowing consumers to easily get legal remedy. Without this, consumers buying across borders will be at a serious disadvantage and will find it far harder to enforce their rights.

The damage will not just be inflicted on UK based businesses and consumers. Those based in the EU will also suffer significantly and needlessly if there is no agreement on this point.

All trade needs a secure legal system to underpin it. We have one which already exists, and which works well. This hugely benefits businesses and if the UK does not have access to it, it will significantly increase the cost and reduce the amount of trade that will take place between the EU and UK.

The British government has recognised the benefits which comes with staying in the system. Switzerland, Iceland and Norway want the UK in the system. We urge the European Union to recognise this and ensure that the UK can swiftly accede to the Lugano Convention. In doing so cross border trade, which already faces significant challenges post Brexit, will at least be underpinned by a common legal system for civil and commercial trade.

Daniel Dalton – CEO

The chamber kicked off 2019 by discussing the state of play in three different areas, welcoming high-level and expert speakers.

With Kris Dekeyser, Director “Policy and Strategy” at DG Competition at the European Commission, we tackled merger policy.  As the trends have shown the number of merger notifications submitted to the Commission has been increasing over the last years, with 2018 witnessing the highest number of notifications ever. While those were concentrated in some sectors at first (e.g. pharma), they then expanded to other sectors and will continue to increase for the coming years. To read more about this event, click here.

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Next, with Gunnar Hökmark MEP we looked at the conclusions drawn from the Banking Union. In response to the crisis, a number of initiatives were put in place (the Single Rulebook in particular) in order to strengthen financial stability, and ensure that the banking sector is safe, reliable, and better supervised for the single market. Our report on the event can be found here.

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On a totally different note, we then tackled the curious case of the Border in the Case of a No Deal Brexit with an expert panel, and learned that in the UK alone, there are up to 250,000 companies that only trade within the EU. Each one of these companies will need to consult a customs specialist in order to ensure they have the right certification when the UK begins to trade with the EU from the outside. However, a key issue lies with the amount of customs experts that exist, as it takes up to 3 years to become a fully trained and operational customs specialist. To read more about this pertinent topic, click here.

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To make sure you don’t miss out on an event in the future, visit our website to see what we have coming up.

Stay tuned for our next monthly overview!

Bernada Cunj

Head of Policy and EU Affairs

The British Chamber of Commerce | EU & Belgium

Youth political engagement is vital for the future of Europe. Democratic participation can take many different shapes, each act adding up to something greater. Citizens are taught from a young age that in life there are rights and responsibilities. But what modern tools can they use to accomplish these responsibilities in an effective manner?

Voting is a perfect example of one such tool – at a certain age (18 in most Member States, but 16 in some), people receive the right to vote, which is a responsibility to express their opinion and enjoy the features of a participative democracy that their ancestors fought for securing. The involvement in this process is sometimes perceived as being obsolete or uncool by young people, but do they know anything about the voting advice applications?

One such application being the newly designed electoral exercise that VoteWatch Europe has developed. Based on the voters answers to a set of questions, the application helps them discover a candidate or a party that best matches them. If this idea interests you, give it a try and play the game! (Preferably before the elections :D)

How should young people get involved?

It is important for young people to engage with politics. Fortunately, there are several tools that they can use to do this. The first step is to inform themselves. In an era of fake-news spreading with the speed of the internet, reliable information is increasingly harder to find. This happens especially in the case of political discourse: false information and misconceptions are constantly spread by politicians seeking office, or seeking to remain in office, as well as by various interest groups hoping to benefit themselves.

Young people have the responsibility to make informed choices and share the knowledge they acquire with their peers.

In the increasingly digitalized age, it is important to have access to objective information and a platform to provide it, such as VoteWatch Europe.

What VoteWatch Europe is?

VoteWatch Europe is a platform for political engagement aimed to deliver objective and factual information on the positions of politicians in the European Parliament, as well as the Council with regards to all issues debated at a European level. By merging sophisticated statistics with insights from politicians, institutions’ staffers and top notch independent researchers, VoteWatch Europe provides the public with real-time, data backed analysis and forecasts on European and global developments.

For instance, their latest insights revolve around which EP political groups are labeled as ‘fake’ and why those labels persist.

VoteWatch Europe identifies the political groups with the lowest cohesion through a practical and objective political affinity measure, which increases transparency.

This information is particularly relevant to knowing more about the true nature of the politicians that represent their electorate in the European institutions’ decision-making process.

What other tools can they use?

In addition to various informative reports, VoteWatch is also helping increase youth political engagement, having designed, along with five European organizations, a multilingual digital platform, YourVoteMatters. YourVoteMatters aims to serve as a communication tool between the 2019 candidates in the European elections and their electorate. This is achieved by including a series of policy debriefings, as well as a survey-like option that enables the electorate to find out which MEP or new candidate their views most align with.

Along these lines, the European institutions have also recently acknowledged the importance of engaging youth in politics. As another tool for this purpose, a campaign called ‘This time I’m voting’ has been created. The campaign has the sole purpose of energising young voters and including them through sharing various videos and articles featuring citizens expressing their reasons for getting involved and voting in the European elections.

Youth participation is critical to the future well-being of Europe. There are several tools that can be used in order to achieve this and organisations like VoteWatch are here to contribute.

All that is left for young people to do is engage and change Europe for the better.

 

The chamber’s young professional network, Brussels New Generation, is hosting a Lunch and Learn with VoteWatch Europe on the 25th February, on finding reliable information on the political stances of EU decision-makers and understanding the evolving regulatory landscape after the upcoming EU elections.

For more information and to register, click here.

 

We talk to Helena Raulus of the UK Law Societies, Chair of our Single Market Task Force and member of the EU – UK Future Relations Committee

What are your biggest priorities at the moment?

As Head of the UK Law Societies’ Brussels Office, my daily work revolves mainly around Brexit right now. I have a particular expertise on the different forms of EU cooperation in judicial matters and the functioning of mutual recognition within the Single Market. Of course this has a special relevance now , as the UK and EU are currently in the act of re-defining the structure of their relationship.

The discussions in the Single Market Task Force support my work, as many of the EU internal market developments will still be of great relevance to UK lawyers and their clients who operate in the EU.

What single market issues are on the table now?

The tax transparency and fairness, and the anti-money laundering initiatives are of particular interest to the legal profession, and to businesses operating in a cross-border context. Both the EU and the UK will try to maintain an open and well-regulated digital economy, which means that there will be further proposals on data transfers, data localisation or blockchain technology.

What should we be looking out for?

Both sides will have to examine how to regulate the platforms of the sharing economy: are these really new forms of doing business? Or are they just extensions of a franchise-type of activity where the same mechanisms of employment or the provision of services for money take place? If so, how can the current regulations apply to these new businesses?

Given that these challenges are the same both for the EU and the UK, and that it is foreseeable that the EU and the UK economies will be linked for the coming decades (regardless of the shape of the ultimate deal), it is useful for me to participate not only in the Brexit discussions, but to be aware of the developments in the single market more generally. This is something that the Task Force provides me with, as I have access to its members’ broad expertise.

How do task forces work? How can members get the most out of them?

The job of the chair and vice-chairs is help ensure that the chamber’s meeting programme is really valuable to members. We advise on the priority issues for business, who are the key players and what are the key points in the decision-making process. That way we can say who members need to talk to, about what, and when.

Any member can influence our programme by letting us know what’s important to them. Drop us a line here, or talk to me or a member of the chamber team!

Preparing for Brexit 

It is less than 5 months until Brexit and the Article 50 deadline on 29 March 2019, and whilst rumours abound of deals, unfortunately – from a business perspective – the spectre of a non-orderly withdrawal outcome remains fully in view. With a few exceptions, it is a wide and deep business consensus that such a no-deal outcome would be an extremely disruptive negative outcome for economic operators on both sides of the Channel. It’s worth repeating – from a business perspective – no deal is the worst deal for everyone.

If there is no withdrawal deal, one might hope there will be side deals covering key issues such as aviation or data, but this cannot be guaranteed, particularly if negotiations break down badly. Consequences will be unpredictable, both politically and economically.

Irrespective of that, we can expect significant disruption at all UK/EU borders – notably with France, Belgium, the Netherlands and in main airports. This is a simple function of the UK leaving the Customs Union and the Single Market without a ready replacement legal framework and with the systems developed to take over.

The situation of the Irish Border in the case of no deal is also unclear – both sides have committed to no ‘hard border’, though both sides may have legal obligations under both EU law in the case of Ireland, and under the WTO in the case of the UK to undertake customs and regulatory checks. Once the UK has left the EU Customs Union and Single Market, there will have to be checks and formalities for goods, the only question is where these checks will take place and exactly what formalities will be applicable.

Preparedness notices from both the EU and the UK Government have flagged the respective legal provisions at the moment of the UK leaving the EU, but do not give a clear roadmap for affected businesses in the case of a collapse of the withdrawal negotiations or a non-ratification by the respective parliaments.

At a minimum, companies should be looking at the potential impact on their supply chains of a potential raising of regulatory and customs barriers, possible queues on both sides of the border as new systems and formalities are introduced, as well as the possible restriction of freedom of movement for staff. On a sector by sector basis, the cessation of regulatory arrangement and licensing may also create new barriers to market.

The British Chamber of Commerce | EU & Belgium will stay close to the UK Government, the EU institutions and the Belgian Authorities during this challenging period. We are the go to organisation that authorities are asking for feedback from on business concerns. Get in touch, use our platform and share your concerns, specific or otherwise so that we can get them to the right people.

Matt Hinde, Fleishman Hillard, and Morten Petersen, EPPA, Co-Chairs of the Future Relations Committee

If you have more questions about the prospect of a no deal Brexit, you can find more information on our website page – What to do if there is no deal?

Our next Brexit event – Brexit and Future Relations – An Update on the Irish Perspective – will take place on the 20th November. You can find more information on our website.

 

 

Like every autumn in Brussels, this one didn’t disappoint with regard to its packed schedule, and we would like to believe that we didn’t either!

We kicked off with the discussion on Cartel Enforcement: Current Practice and Updates where we learned that since February 2018, companies breaching antitrust regulations by taking part in cartels has resulted in hundreds of million in fines, while ¾ of cartel cases originate from leniency applications.

On a different note, Kate Kalutkiewicz updated our members on the state of play with regard to EU-US Trade Deals. A special emphasis was put on China and the current state of trade relations with the US, as an increasing threat of a trade war looms between both countries, plus we discussed the reform of the Dispute Settlement System in the WTO and the view of the US on the Mutual Recognition Agreements (MRA). More specific trade sectors were also examined, such as chemicals, aluminium and car company regulations.

We also hosted a panel debate on eHealth – Engendering Health Systems’ Sustainability. The positive impact that eHealth can have on EU member States’ Health Systems was stressed throughout the discussion between the panellists and the participants. A wider implementation of digital health across the EU would allow, amongst others, tremendous savings resulting from the use of mobile health applications. A better pooling of data at the EU level would also have huge benefits, reducing for instance the time to diagnose rare disease. The main issue in this field arises from data privacy, record linkage and a lack of incentives from both doctors and governments to use digital technologies.

Under the Future Relations Committee, the chamber organised three events, starting with the roundtable debate with legal industry and the UK Justice Minister on EU-UK Civil Judicial Cooperation, Lucy Frazer. At this event we had the opportunity to discuss how the UK’s withdrawal from the EU has created many legal complications due to the intertwining of UK and EU law. It can be seen as one of the largest areas to negotiate in the agreement as companies wish for the legal protection to remain consistent, or at least to have a large enough transition period so that the adjustment is smooth. The second event saw Philip Rycroft, DExEU Permanent Secretary, give an Update of the UK EU Exit planning process, and finally we hosted the UK Ambassador to Belgium, Alison Rose, who updated us on the current situation in the negotiation process.

Our last event in September was organised with our members Digital Together, who took part in the workshop Digital Movers and Consumers. The objective was to initiate the creation of a dialogue between digital businesses, non-digital businesses, consumer associations, policy makers and other stakeholders to ensure that all viewpoints are shared to help formulate appropriate future regulation and legislation in the digital space in Europe.

Just two days before a crucial Parliamentary vote, we hosted a debate on Single Use Plastics , where many concerns and issues for industry were raised, in particular the issue on the Extended Producer Responsibility (EPR) and its lack of clarity.

Our FDI Screening Mechanisms event kept our members informed, helping us to understand that the EU has no single Foreign Direct Investment (FDI) screening mechanism, but several states in the EU have their own screening mechanism, which are strongly related to national security.

Finally, to finish the month of October, we organised a discussion on eCommerce after Coty and beyond, during which we heard about the Coty decision, which saw the European Court of Justice (ECJ) ruling that luxury good suppliers may prohibit the online sale of their goods by authorised retailers on third-party platform (such as Amazon) – a fascinating example of the intricacy of the enforcement of e-commerce rules.

If you want to learn more about our events, please visit our website, read our detailed event reports or join us at one in the future.

Bernada Cunj

Head of EU Events and Policy

The British Chamber of Commerce | EU & Belgium

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