UK joining Lugano Convention is essential for EU Business and Consumers

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

Reaction to European Council (Art. 50) guidelines on the framework for the future EU-UK relationship – 23rd March

 

The British Chamber welcomes the EU and UK transitional agreement allowing additional time for a deep and comprehensive future relationship agreement to be negotiated. We also, welcome the UK and EU’s joint intention to achieve a post-transition relationship that satisfies the mutual interests flourishing between them.

We ask:

• the European Council to deliver a negotiation mandate which enables the broadest and deepest possible relationship between the UK and EU to be agreed,

• the UK to present, without delay, its written proposals for a deep and comprehensive future relationship with the EU27 as soon as possible, and that this proposal contain sufficient details on how trade between the UK and EU in each business sector will function, so that EU and UK business have enough time to understand how it will need to adapt and minimise disruption to customers, supply-chains and the workforce.

REACTION TO EUROPEAN COUNCIL’S CONCLUSIONS – BRITISH CHAMBER OF COMMERCE| EU & BELGIUM 15th December

The British Chamber of Commerce | EU & Belgium welcomes the declaration by the European Council that “sufficient progress” has been made in the negotiation of the UK withdrawal from the EU, and its decision to move to phase two. We urge the Commission to proceed swiftly with the negotiations on a withdrawal agreement incorporating the terms of the joint report of 8 December. We also urge the Council to grant the Commission a mandate to open negotiation on a transitional period at the earliest possible occasion. We stress that the withdrawal agreement which includes the transitional arrangements should be adopted well ahead of the 29 March 2019 deadline. We further welcome the Council’s intention to start discussions on a negotiation mandate for the future EU-UK relations early in the new year.

Our member companies have a common interest in the success of Europe as a whole, including both the EU and Britain. We hope that the EU27 and the UK will negotiate a deep and comprehensive agreement that supports the invaluable relations between the two partners.

First and foremost an orderly withdrawal agreement must be reached, which includes a transitional period that allows all economic activity to continue unhindered during and after Britain’s withdrawal from the EU. The transitional arrangements shall ideally maintain the status quo and ensure the application of the acquis communautaire in the UK for the period necessary to grant businesses certainty, until the full implementation of the future relationship.

With little time available for extremely complex negotiations and ambitious objectives, we are calling for profound and constructive progress in the weeks ahead on negotiating the transitional arrangements and a framework for the future. We will continue working with the negotiating authorities and national business representatives across the UK and EU27 to forge common understanding that a strong and close future relationship is in the best interest of everyone.

—– END —-

 

Press Contact: Uzma Lodhi – Head of Communications – +32 2613 2855

 

About the Chamber

The chamber has been serving the international business community here for over 100 years and we are committed to the long term – continuing to be the ultimate Gateway to Europe. Our members are small to large businesses from Britain and across the world – all with a stake in the success of Europe and its economy. They employ 1.2m people in the UK alone, with at least as many again in the rest of Europe.

Joint Statement

An alliance of northern European Coastal Chambers accounting for 70% of EU-UK trade urge British and EU negotiators to create clarity on a future trade friendly relationship as soon as possible now that sufficient progress has been made.

The Federation of Belgian Chambers of Commerce represented by Voka – Flanders Chamber of Commerce and BECI – Brussels Chamber of Commerce, the British Chambers of Commerce, Chambers Ireland, the Danish Chamber of Commerce, the French Chamber of Commerce and Industry, the German Chambers of Commerce and Industry and the Netherlands-British Chamber of Commerce have today handed over a joint statement to the British and EU Brexit negotiators. They urge the British and EU negotiators to strive for a breakthrough in the first phase of the negotiations to ensure talks on transition and the future EU-UK trade relationship can start as soon as possible.

Countries from the northern European coastal area have always maintained exceptionally good trade ties. Trade between the United Kingdom and the other 6 European Union countries in this area amounted to 344bn EUR in 2016, accounting for 70% of the total EU-UK trade. The English Channel, located in the middle of the North Sea area, is for example the world’s busiest shipping lane, with more than 500 vessels passing through the strait on a daily basis, as well as being a key transport link between the EU and Ireland. A sudden and chaotic disruption of trade in this region would have a substantial economic impact that should not be underestimated.

The northern European Coastal Chambers were therefore pleased to learn last Friday that sufficient progress has been made in the first phase of the Brexit negotiations. The Northern European Coastal Chambers now call on the United Kingdom and the European Union to move on to discussing the outlines of a future trade friendly EU-UK relationship that fully respects all aspects of the integrity of the Single Market as soon as possible.

The northern European Coastal Chambers also believe a realistic transition period is needed to provide time for companies to adapt to the new EU-UK trading relationship. A status-quo like transition period – announced with sufficient notice – ensuring the UK remains in the customs union and the Single Market for the duration of the transition period, with all the appropriate rights and obligations, would be best to provide business with the highest possible degree of certainty and predictability.

 

 

Press contacts:
Belgian Chambers
– Voka – Flanders Chamber of Commerce and Industry
Mr Tom Demeyer
Tom.Demeyer@voka.be
0032 472 84 15 99
– Beci – Brussels Enterprises, Commerce and Industry
Mr Jan De Brabanter
jdb@beci.be
0032 499 588 845

British Chambers
– British Chambers of Commerce
Mr Allan Williams
a.williams@britishchambers.org.uk
0044 (0)7920 583381
– British Chamber of Commerce – EU & Belgium
Ms Uzma Lodhi
Uzma@britishchamber.eu
0032 (0)499 515553

Chambers Ireland
Mr Ian Talbot
ian.talbot@chambers.ie
00353 87 234 4829

Danish Chamber of Commerce
Mr Kasper Ernest
ker@danskerhverv.dk
0032 491 25 56 11

Deutscher Industrie- und Handelskammertag
Franziska Stavenhagen
0032 2 286 – 1634
stavenhagen.franziska@dihk.de
French Chambers of Commerce and Industry
Mr Christophe Duday
c.duday@ccifrance.fr
0033 1 40 69 38 31

Netherlands British Chamber of Commerce
Mrs. Lyne Biewinga
lbiewinga@nbcc.co.uk
0031 70 205 56 56

British Chamber calls for focus on jobs and economy for UK and EU27

The British Chamber of Commerce in Brussels is calling on both Britain and the EU to focus on jobs and the economy in Brexit negotiations.

“We need the best possible agreement between the UK and the EU, that takes into account the highly interconnected nature of our economies. If we’re to avoid unnecessary damage to jobs and businesses across Europe we’ve got to have clarity, certainty, and practicability” said Tom Parker, chair of UK-EU relations for British Chamber.

Given the complexity and time-sensitivity of the negotiations, we believe this will be a two step process and that the two parties should agree as soon as possible to an amicable divorce, with the rights of residents, financial settlement, and the sensitive questions related to Northern Ireland being resolved. They should then agree to a transitional arrangement that provides legal certainty for a clearly defined period during which a satisfactory and comprehensive agreement on the new EU-UK relationship can be reached.

Delivering a seamless business environment between the UK and EU27 will be very complex, particularly given the limited amount of time available. That’s why the British Chamber has established a set of 10 guiding priorities, which we believe must underpin the future agreement. “Ongoing access to the single market, seamless customs arrangements and availability of skilled labour are absolute musts for any future UK-EU partnership” Parker added.

 

—END—

About the British Chamber

The British Chamber is unique: an international network that connects your business with other businesses, a wide spectrum of national and European policymakers, and customers and clients. We can facilitate your relationships with the European policymakers and Institutions that your business needs to reach. We are a platform for developing your business whether just starting up or well established. We are the gateway to a global trade and investment business solution. Our network of business support services and partnerships with the UK Trade & Investment (UKTI), the Belgian regional investment agencies in Brussels, Flanders and Wallonia, and the European (COBCOE) and global network of UK Chambers of Commerce gives you the direct contact and connections you need to succeed.

 

Contacts

Uzma Lodhi – Head of Communications – uzma@britishchamber.be