Half a year after Brexit – what is new?

Although half a year has already passed after Brexit, not all rules have become definitively established. There is still uncertainty regarding the resolution of business disputes involving an EU-UK element, the applicability of transitional periods, e.g. for the CE marking to supply products to the United Kingdom market. There is, however, good news, too – the UK data protection rules have been recognised equivalent to the EU data protection system. Thus, this article deals with the relevant news related to dispute resolution, protection of trademarks, data protection and product safety requirements.

Dispute resolution

Until the beginning of this year, disputes involving an EU-UK element have been resolved in line with the EU rules on the applicable law, jurisdiction, recognition of judgements etc. The uniform legal regime undoubtedly facilitated the resolution of complex cross-border disputes rendering it more efficient and predictive. Nevertheless, from 1 January of this year, the EU rules have ceased to apply to EU-UK disputes and issues of jurisdiction and recognition and enforcement of judgements have become to a significant extent subject to different national regulations.

It has been widely accepted that the UK’s accession to the Lugano Convention would help to minimise the negative consequences of Brexit on cross-border dispute resolution, as the rules established by this convention are analogous or similar to the EU rules. Consequently, the UK joining the contracting states of the convention – the EU, Norway, Switzerland and Iceland – was a welcome and awaited move.

Nevertheless, in May of this year, the European Commission publicly announced a recommendation for the EU not to approve the UK joining the convention. The Commission pointed out that the Lugano Convention is a flanking measure of the internal market and relates to the EU-EFTA/EEA context; meanwhile, the UK is a third country without a special link to the Internal Market.

Notably, a final decision on the UK joining the Lugano convention will be taken by the Council. Until the EU takes a final decision on the UK acceding to the convention, the jurisdiction of disputes involving an EU-UK element as well as recognition and enforcement of judgements will continue to be governed by national laws and, in some instances, by other international legal instruments.

Thus, the first half a year after the end of the Brexit transitional period has not brought, unfortunately, legal certainty in respect of dispute resolution.

Protection of trademarks

With the expiry of the Brexit transitional period on January 1 of this year, the EU trademarks have ceased to enjoy UK level protection. Nevertheless, the UK Intellectual Property Office has automatically granted UK trademark equivalents to all EU trademarks registered and valid until January 1 of this year.

Half a year after the end of the Brexit transitional period, there have been no changes regarding this issue. Nevertheless, it is essential to recall that automatic UK trademark equivalents are not granted to EU trademarks filed but not registered before 1 January 2021. Owners of such trademarks, seeking protection in the UK, must file a registration application with the UK Intellectual Property Office by 30 September 2021. If this deadline is met, trademarks in the UK will be registered to maintain the primary application date of the EU trademark.

Data protection

The EU-UK Trade and Cooperation Agreement set out provisions of a six-month transitional period during which data could freely move between the EU and the UK until June 30 of this year. At the end of June, the EU adopted a decision recognising the UK data protection rules to be equivalent to the EU data protection standards. It means that data can continue to move freely between the EU and the UK. Such a decision was adopted because the UK, after leaving the EU, has not made any material changes in its data protection rules and they continue to be based on the EU data protection regulation and the Law Enforcement Directive. This decision means that businesses will continue to use the free movement of data between business entities from the EU to the UK and vice versa, without the need for any additional safeguards (e.g. standard contractual conditions or data transfer impact assessment).

This decision will also facilitate the implementation of the Trade Agreement which provides for personal data exchange in certain areas, e.g.in cooperation on criminal issues.

The “equivalence” decision adopted by the EU for the first time is limited in time and will be effective for a period of four years – it will expire automatically on 30 June 2025. After this period, it will be reassessed if the UK data protection standards have not changed and if this system can be further recognised as equivalent. Even during this four-year period, the EU will perform an assessment of the UK personal data protection standards, and if the protection level guaranteed by them changes, the EU reserves the right to withdraw its decision.

Product marking requirements

For those carrying out trade in certain products (electronic, toys, electromagnetic, aerosol, radio equipment, lifts etc.) in the UK market, only half a year remains to adapt to the new marking requirements. In order to ensure compliance with the product safety standards, the UK introduced two new standards: UKCA and UKNI (designated for the market in Northern Ireland). EU-based manufacturers or distributors wishing to continue product export to the UK after 1 January 2022 must obtain the already marking – UKCA (or UKNI), as the previous CE marking will not be recognised (the CE marking remains applicable for products distributed on the EU market).

This means that products supplied to the UK market will have to comply with the UK-established requirements, rather than with the EU-established requirements. The current UK-established requirements are actually analogous to the EU requirements; therefore, a product complying with the requirements for the CE marking will actually comply with the requirements for the UKCA (or UKNI) marking. It should be noted, however, that adaptation to the new marking requirements takes time because additional contacts with the UK authorised institution are required; thus, compliance with these requirements should not be left for the last months of 2021. Important: if under the CE marking requirements self-declaration was allowed without the notified body, the same regime is also applicable to the UKCA marking.

Notably, some argue that the set period for manufacturers to adapt to the new marking requirements which should come into effect in their entirety from 1 January 2022 is too short. Consequently, the currently applicable transitional period might be extended in the future.

Finally, it should be noted that the UKCA marking requirements will also apply to medical devices, railway interoperability equipment, building products and explosives for civil uses; however, these products are subject to special marking rules.

 

 

 

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Agnė Kisieliauskaitė

Agnė Kisieliauskaitė

Senior Associate / Lithuania
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Gintarė Taluntytė

Gintarė Taluntytė

Senior Associate / Lithuania