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EU warns UK businesses they could be shut out after a no-deal Brexit

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Barnier Davis
secretary David Davis (L) with the EU’s chief negotiator Michel


  • 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
  • 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

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
, 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

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.”

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