- Reuters/Francois Lenoir
- A host of industries could be shut out from the EU after Brexit, Brussels has warned.
- Airliners, chemical companies and water producers may need to relocate their business activity to the continent to avoid being shut out from the single market, according to a memo.
- Brexit Secretary David Davis had considered taking legal action against the EU for making worst-case scenario contingency plans.
LONDON – Brussels has warned a host of industries with operating licenses in the UK that they will have no right to work within the European Union if Britain leaves the bloc with no deal in 2019.
The EU sent “be prepared” memos to industries including airliners, seafarers and drugmakers at the end of last year, warning that licenses to operate within the single market will lapse after Brexit, the Financial Times reports.
The memos warned that Britain will become a third country after Brexit and some industries will need to establish EU entities to replace their UK licenses in order to continue doing business within the single market.
The memos reportedly make a number of stark warnings, including:
- UK-issued operating licenses for airliners will “no longer be valid” in the EU unless carriers are relocated to somewhere within the EU and owned by EU nationals.
- The same applies to road transport operators. They “must have a stable and effective establishment in an EU member state.”
- Chemical groups will see their business disrupted unless they secure approval for products from within the EU. “Holders of product authorisations must be established within the union,” the memo says.
The memo highlights that several British businesses and contracts would be severely jeopardised by the UK government walking away from Article 50 talks with no withdrawal agreement in place.
Brexit Secretary Davis has reacted angrily to the warnings, accusing the EU of devoting too much time to worst-case scenario contingency planning and not placing enough emphasis on the potential of a future trade deal.
In a leaked letter sent to Theresa May, Davis advised the prime minister to consider taking legal action against Brussels for the damaging measures of its no-deal planning.
“The EU has adopted a number of measures that put agreements or contracts at risk of being terminated in the event of a ‘no deal’ scenario and/or would require UK companies to relocate to another member state,” Davis wrote.
“The commission had issued similar unilateral statements on company law, civil justice and private international law, transport and the breeding, transportation and protection of live animals.”
However, officials warned him that any legal challenge against the EU would be costly, time-consuming, politically-risky and probably fail.
The FT notes that the EU believes in comprehensive contingency planning in order to be prepared for all possible outcomes of withdrawal negotiations, including moving businesses from Britain to somewhere within the EU27.
The EU has expressed surprised over Davis’ anger towards its contingency planning.
Asked about the letter on Tuesday morning, an EU Commission spokesperson said: “We are surprised that the UK is surprised that we are preparing for a scenario announced by the UK government itself.”