Brexit: Automotive industry

Why does Brexit matter to you?

The United Kingdom submitted on 29 March 2017 the notification of its intention to withdraw from the Union pursuant to Article 50 of the Treaty on European Union. This means that, unless a ratified withdrawal agreement establishes another date, all Union primary and secondary law will cease to apply to the United Kingdom from 30 March 2019, 00:00h (CET) ('the withdrawal date'). The United Kingdom will then become a 'third country'.

If no withdrawal agreement is in place on 30 March 2019 the EU Treaties will cease to apply to the UK. It is understood that, should there be "no deal", there will be no transition period and EU law (in particular, the Single Market) will cease to apply to the UK/EU relationship from that date.

Preparing for the withdrawal is not just a matter for EU and national authorities, but also for private parties. As the British government publishes a series of technical notices outlining how businesses should prepare in the event of a no-deal it is becoming more and more clear that a “no deal” scenario will have many unwanted and adverse effects on companies in the UK.

In case of a hard Brexit, what will change?

No deal would also hamper the UK’s ability to trade cars globally since the EU negotiates all Free Trade Agreements (FTA) for the EU28 collectively. By virtue of its EU membership, the UK benefits from 68 FTAs which on exit day would no longer apply.

Subject to any transitional arrangement that may be contained in a possible withdrawal agreement, Directive 2007/46/EC establishing a framework for the approval of motor vehicles and their trailers and of systems, components and separate technical units intended for such vehicles (hereinafter collectively referred to as "motor vehicles") will no longer apply to the United Kingdom as of the withdrawal date. This has in particular the following consequences:

1. CONSEQUENCES FOR THE IDENTIFICATION OF ECONOMIC OPERATORS

Pursuant to Article 5(3) of Directive 2007/46/EC, manufacturers established outside the Union must appoint a representative established in the Union to represent them before the Member State type-approval authorities. Manufacturers' representatives established in the United Kingdom will not, as from the withdrawal date, be considered as established in the Union for the purposes of Article 5(3).

Therefore, to the extent that Directive 2007/46/EC is still relevant to their activities, manufacturers established outside the Union are advised to take the necessary steps to ensure that, as from the withdrawal date, their appointed representatives are established in the EU-27.

2. CONSEQUENCES FOR TYPE-APPROVALS AND TYPE-APPROVAL AUTHORITIES

Motor vehicles within the scope of Directive 2007/46/EC may only be registered, sold and enter into service if they are accompanied by a valid certificate of conformity issued by the manufacturer attesting that the vehicles have been manufactured in conformity with the EU type-approval granted by a Member State authority.

As from the withdrawal date, Directive 2007/46/EC will cease to apply to the United Kingdom. This means that, as from that date, the United Kingdom approval authority will cease to be an EU type-approval authority under Directive 2007/46/EC. As a result, it will not be possible as from the withdrawal date for a manufacturer to place on the Union market motor vehicles accompanied by a certificate of conformity referring to a type-approval granted by the United Kingdom approval authority formerly competent under EU law. In particular, the United Kingdom approval authority will no longer be in a position to perform any of the functions and activities of an approval authority for the purposes of Directive 2007/46/EC with respect to type-approvals it granted prior to the withdrawal date. Moreover, the United Kingdom approval authority will no longer be able to issue revisions or extensions to such approvals on the basis of Article 14 of Directive 2007/46/EC.

How can we help you?

Our specialists are ready to guide your company through the swamp of regulatory issues in a post-Brexit landscape.

We provide advice on incorporating a company in Belgium in case you need to relocate or in case you need a EU – based company to continue your business.

Belgian government is working on creating an entrepreneur-friendly environment: corporate tax rate has been decreased to 29% and will further be lowered to 25% in 2020. SMEs will benefit a decrease in the rate to 20% (on the first tranche of 100.000 Euro), corporate law will be reformed by 2019 and provides more flexible corporate entities and less strenuous formalities.

Belgium is ideally positioned at the heart of Europe to continue your activities on the mainland.

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