The Commission's Second Letter of Formal Notice

Author Oliver Dixon  Licence CC BY-SA 2,0 Source Brexit and the Irish Border

Jane Lambert

On 3 March 2021, the Secretary of State for Northern Ireland announced that 

"For supermarkets and their suppliers, as part of the operational plan the UK committed to at the UK-EU Joint Committee on 24 February, the current Scheme for Temporary Agri-food Movements to Northern Ireland (STAMNI) will continue until 1 October. Certification requirements will then be introduced in phases alongside the roll out of the Digital Assistance Scheme." (see the minister's written statement of 3 March 2021). 

In a letter to Lord Frost dated 15 March 2021, Mr Maroš Šefčovič, Vice-President of the Commission complained that the announcement was a breach of the Northern Ireland Protocol which is an integral part of the agreement by which the UK withdrew from the European Union.

The letter is the first step in proceedings that the Commission has threatened to bring against the British government for the infringement of the withdrawal agreement.   It indicates that the Commission has two options.  It could bring proceedings in the Court of Justice of the European Union under art 12 (4) of the Northern Ireland Protocol:

"In particular, the Court of Justice of the European Union shall have the jurisdiction provided for in the Treaties in this respect. The second and third paragraphs of Article 267 TFEU shall apply to and in the United Kingdom in this respect."

Alternatively, it can start consultations under art 169 (1) of the withdrawal agreement:

"The Union and the United Kingdom shall endeavour to resolve any dispute regarding the interpretation and application of the provisions of this Agreement by entering into consultations in the Joint Committee in good faith, with the aim of reaching a mutually agreed solution. A party wishing to commence consultations shall provide written notice to the Joint Committee."

This could lead to arbitration in accordance with the dispute resolution procedures that I discussed in Dispute Resolution under the Withdrawal Agreement on 31 Dec 2020.

Either course could have adverse consequences for the British government. A press release of 15 March 2021 hints darkly at "the possibility to impose a lump sum or penalty payment" if the Commission prevails though it does not identify the authority by which such a penalty could be imposed and I can't think of any right now. However, it could make a finding that would embarrass the British government in its dealings with countries outside the EU.  As for the alternative, the press release warns:

"This may ultimately also result in the imposition of financial sanctions by the arbitration panel. In case of non-payment or persisting non-compliance, the EU could suspend its obligations under the Withdrawal Agreement (with the exception of the citizens' rights part of the agreement) or from the Trade and Cooperation Agreement, in accordance with Article INST.24(4), e.g. by imposing tariffs on imports of goods from the UK."

That would be damaging especially as the UK and remaining member states remain party to many other multilateral agreements such as the Atlantic alliance.

Anyone wishing to discuss this article or the resolution of disputes with the EU may call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact page.

"Global Britain in a Competitive Age"

Author Eric Gaba Licence  CC BY-SA 4.0, Source Wikipedia Indo-Pacific

Jane Lambert

In Global Britain in a competitive age The Integrated Review of Security, Defence, Development and Foreign Policy, the government has spelt out its objective in decoupling the United Kingdom from neighbours and allies with shared interests in the world's richest trading bloc. It may not be an attainable objective or even a desirable one but at least it is ascertainable.  The review reveals the direction of travel the first time since the referendum thereby allowing businesses and individuals to plan for the medium term.

The document consists of five parts and three annexes:

• The first part is the foreword in which the Prime Minister shares his vision for the UK in 2030 (pages 3 to 9).
• The second is headed "Overview" and is effectively an executive summary (pages 11 to 22).
• Part III is the national security and international environment to 2030 (pages 24 to 32).
• The "Strategic Framework" between pages 33 and 95 is the biggest part of the review and consists of 4 topics:
• The first is headed "Sustaining strategic advantage through science and technology" which is to be achieved by growing the UK's science and technology superpower and developing a cyber warfare capability.
• Shaping the open international order of the future which includes an "Indo Pacific Tilt" over 50 tears after Harold Wilson announced the UK's withdrawal from bases east of Suez.
• Strengthening security and defence at home and overseas includes expanding the nuclear arsenal more than 60 years after the cancellation of "Blue Streak".
• Building resilience at home and overseas.
• The last part is on implementation and consists of 2 ½ pages (96 to 99).

Annex A consists of a table listing spending priorities in the latest spending review,  Annex B is headed "Evidence and Engagement" and points to some of the people the authors of this review had consulted, The last annex is a glossary.

As an intellectual property lawyer, I should love to see the UK become a science and technology superpower with vibrant creative industries attracting investment and expertise from around the world.  I just can't see how it is going to happen. China applies for 1.4 million patents every year compared to the UK's 12,000. In the number of patent applications, the UK lies 9th behind China, the USA, Japan, South Korea, Germany, Russia and France (see Knoema Number of patent applications among residents).   In the European Patent Office. it consistently trails the Netherlands and Switzerland with a third and eight of its population respectively (see European patent applications per country of origin).

Although the UK economy may well bounce back once the COVID-19 restrictions are lifted, there is no reason to suppose it will grow consistently at historically unprecedented rates over the next 9 years.  Even on the most optimistic forecasts, it will be overtaken by countries that can take advantage of economies of scale.  According to Statista the UK will slip from 5th place in 2919 to  9th by 2030 behind China with $31,731 billion, the USA with $22,920, India $7,972, Brazil $5,862, Japan $5,852, Russia $4,730, Germany $4,441, France 4,206 and the UK $3,664 (see "The 15 countries with the highest gross domestic product (GDP) in 2030 (in billion U.S. dollars)").  

The review makes only one brief reference to the Belt and Road initiative, a massive road, rail, port and pipeline building project, on page 26 but fails to consider its impact on the world's economy.  It is likely to be massive. It will create a land bridge across the Asian and European continents by lowering the cost and speeding the transit of freight.  By so doing it will integrate the economies of all countries linked to that land bridge and increase still further the economic strength of China.

For this and other reasons, this review probably understates the consequences of the rise of China.  It tacitly acknowledges China's rise by referring in several places to a "multipolar" environment. However, if China has a GDP that is 38% larger than that of the USA the world will be distinctly unipolar.  If there is to be a new international order, Washington's influence will be diminished and that of middle-ranking powers such as the United Kingdom will barely register at all.  

The review makes all sorts of assumptions that may or may not be justified such as a continued union of Scotland, Wales and Northern Ireland with England.  Surely any review of defence policy has to plan for the possibility of the closure of the nuclear facilities on the Forth and Clyde and the loss of military shipbuilding capabilities in Scotland. It should also plan for a resumption of terrorist activity in Northern Ireland if the Good Friday agreement is abandoned for any reason.

Anyone wishing to discuss this article or any of the topics mentioned in it may call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Brexit Briefing February 2021

Standard YouTube Licence

Jane Lambert

This video from the Intellectual Property Office neatly summarizes many of the changes to the law that I discussed in my articles How Brexit has changed IP Law  17 Jan 2021 NIPC Brexit and What happens to European Union IP Rights after Brexit? 21 Feb 2021 IP Yorkshire and my presentations IP After Brexit on 20 Feb 2021 and How Brexit has changed IP Law 26 Jan 2021 (slides) (handout). The rights of British and other EU trade mark and Community design and plant variety owners in the 27 remaining EU member states will be unchanged. They can be enforced, assigned, licensed or charged in the usual way.

Although the logic of brexit is to refocus British trade and investment from Europe to the wider world, the EU remains the UK's closest, largest and richest market. British companies will continue to trade and invest there for the foreseeable future.  One immediate consequence of the expiry of the implementation period is that the courts of the UK have ceased to be EU trade mark and Community design courts.  If a Britsh business wishes to enforce or defend its EU trade mark or design registration it must seek redress in the courts of one of the remaining member states.  

Until 31 Dec 2020 English lawyers had full rights of audience before the Court of Justice of the European Union and the General Court and extensive rights of representation in the individual member states as the latest issue of Brussel News (the newsletter of the Bar Council's representative in Brussels) notes.  Those rights have now been lost and although the draft Trade and Cooperation Agreement makes some provision for cross-border practice which is certainly than nothing they are more limited.  Much the same is true of patent and trade mark attorneys who must now appoint agents to prosecute trade mark and design applications in the EU Intellectual Property Ofice.  In this regard, my chambers may be able to help because my colleagues, James Bridgeman SC and Guido Carducci live and continue to practise in EU member states and retain rights of audience in the EU and their national courts as I remarked in Does Your IP Strategy Still Work 26 Feb 2021 NIPC News.

Meanwhile, the brexit experiment of refocusing British trade and investment continues with new agreements with Ghana, Albania and Mexico, a "space bridge" with Australia and further negotiations with India and New Zealand. There have been reports of delays and obstacles in exporting all sorts of goods from unprocessed seafood to cheese.   London has been overtaken by Amsterdam in the value of share trading and a decline has been reported in the volume of SWAPs and derivative transactions.  Negotiations on equivalence in financial services are understood to have progressed slowly. Lord Hill recommended the liberalization of listing conditions in his UK Listing Review to make London more competitive.  A similar recommendation was made by Roy Kalifa in his Review of UK Fintech.  The thinking behind both reports is that the EU is now a competitor in the supply of financial services. No favours can be expected from it. The remedy is to develop new products and services and find new markets.

Anyone wishing to discuss this article or brexit generally may contact me by phone on 020 7404 5252 during office hours or through my contact form at other times.