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Whilst there was a collective sigh of relief that the UK and EU agreed a deal on Christmas Eve, thus avoiding a disorderly exit from the Single Market and Customs Union, one thing that is certain is that our trading relationship with the EU has fundamentally changed.
This 1200-page document covers a multitude of areas of trade and cooperation between the UK and EU and reflects the complexities of a 40-year relationship. Hence, it maybe some time before we fully understand all of the ramifications of this agreement.
Specifically, on trade the deal is regarded as a generally positive on goods and preserves the zero tariffs and quotas treatment that we had as an EU Member, but there is new complexity added with new rules of origin and VAT collection. There are many unanswered questions surrounding the future relationship on services, which are key to the success of our economy. The hard work of navigating these new arrangements in the midst of a global pandemic starts now.
Below we’ve summarised some key areas which are likely to have an impact on advertising and marketing services. Please note that this list is not exhaustive, and we recommend that you seek professional advice to address any legal or tax issues.
The following issues are explored below:
Personal Dataflows
The agreement puts in place temporary provisions for the continued free flow of personal data until a data adequacy decision is reached. This provides a welcome reprieve from what could have been an unwelcome cliff-edge at the end of the transition period. In the meantime, we have sought clarity as to what this means for the ICO’s participation in the One Stop Shop mechanism. The One Stop Shop mechanism applies when there is a personal data breach and it means that the organisation involved only needs to interact with one lead data authority.
Whilst the signs are that we will get a data adequacy decision before the 1 July 2021, businesses are being advised to incorporate Standard Contractual Clauses in contracts with their EU partners as a precaution, to minimise the potential risk of disruption. For more information please visit the ICO’s website.
Digital trade
This agreement contains some of the most modern digital trade provisions and ensures that there is no requirement to localise data or computing facilities, forced sharing of source code or the imposition of custom duties on electronic transmissions.Provisions concerning electronic signatures or electronic documents have been included in the agreement ensuring that the majority of contracts can be completed digitally.
The agreement includes online consumer protection and anti-spam provisions giving consumers strong protections when buying from businesses in either the UK or the EU. How cross border consumer rights will be protected in practice post Brexit remains to be seen.
Cross-Border Broadcasting
Country of Origin rules under the EU’s Audiovisual Media Services Directive (AVMSD) will no longer apply to the UK. This will have a particular impact on UK-based broadcasters carrying UK advertising cross-border. Where previously they could rely on Ofcom rules and licensing to broadcast EU-wide, the new reality is that without an EU licence, UK-based broadcasters would be subject to host state rules and this will affect the type of advertising they can broadcast into the EU.
Audio-visual services
In keeping with EU precedent and the Cultural Exception (L’exception Culturelle) audio-visual services are excluded from Services and Investment provisions in the agreement.
Temporary Exports
The agreement’s coverage of goods and tariffs does have some benefits to the advertising industry in that it covers the temporary movement of professional equipment for production, broadcasting, filming, cinematography, sound or television recording, as well as exhibitions, meetings and fairs. It also includes the distribution of tourist publicity material. This effectively means that such equipment or materials will not be subject to import duties or taxes so long as the equipment is re-exported within a specific period.
Immigration
Freedom of movement has ended, as of 1 January 2021 and the UK has implemented a new points-based immigration system in its place. The deal does not preserve free movement in any way. The rights of EU/EEA citizens, resident in the UK prior to 1 January 2021, however, are protected in the Withdrawal Agreement.
This agreement does not impact mutual rights of UK and Irish nationals moving to from UK or Ireland, known as the Common Travel Area.
Short-term business visits
Under the agreement (current pandemic travel restrictions notwithstanding), UK business visitors will be able to visit EU Countries without a visa but only for certain permitted activities and certainly not for remunerated work. The maximum length of stay is 90 days in any six-month period. Business visitors will also need to check the validity of their passport as some countries will not allow entry with less than 6months left and the passport must also be less than 10 years old.
This is the list of permitted activities for short term business visits:
| a. Meetings and consultations | g. Purchasing |
| b. Research and design | h. After-sales or after-lease service |
| c. Marketing research | i. Commercial transactions |
| d. Training seminars | j. Tourism personnel |
| e. Trade fairs and exhibitions | k. Translation and interpretation |
| f. Sales |
However, some EU Member States have expressed reservations to the general terms of the deal, so it makes it difficult to rely on the main deal as a definitive guide to entry permissions across the EU. For example:
| For all of the activities listed above | Cyprus, Denmark, Croatia require work permits, including economic needs test, required in case the short-term business visitor supplies a service.
Latvia requires a work permit for operations/activities to be performed on the basis of a contract. Malta requires a work permit . No economic needs tests performed. Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required. Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year. |
| Marketing research
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Austria: A work permit is required, including economic needs test. Economic needs test is waived for research and analysis activities for up to seven days in a month or 30 days in a calendar year. University degree required.
Cyprus: A work permit is required, including economic needs test. |
| Trade fairs & exhibitions | Austria, Cyprus: A work permit, including economic needs test, is required for activities beyond seven days in a month or 30 days in a calendar year. |
| Commercial transactions | Austria, Cyprus: A work permit, including economic needs test, is required for activities beyond seven days in a month or 30 days in a calendar year.
Finland: The natural person needs to be supplying services as an employee of a legal person of the other Party. |
Cross-Border delivery of Advertising and Market Research Services
There will be a number of changes particularly in how UK companies, that do not have an establishment in the EU currently, operate cross border. In line with EU WTO commitments, roughly half of the EU Member States require an economic means test for Contractual Service Suppliers. Fortunately, some of our biggest export markets France, Germany and Ireland will not require this. Self-employed independent professionals will need to review local laws as this will be subject to individual host state rules.
Intra-corporate transferees and business visitors for establishment purposes
The agreement has provisions on intra-corporate transferees and business visitors looking to set up or invest in a business. Generally speaking, these activities will not require work permits but check local regulations for specific exemptions. Some EU Member States exclude non-profit organisations from these provisions. Management and specialist level intra-corporate transferees are allowed to stay up to three years and trainee employees up to one year. Business visitors for establishment purposes can stay up to 90 days within any six-month period.
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