Brexit Insight From the EU-27: France
The French Parliament authorised the government to take measures – known as orders (ordonnance) – which should otherwise be taken pursuant to law, in order to map out the consequences of a “no-deal” Brexit. The government had either six months or a year to pass those orders, following publication of the law.
The government was authorised to take any measure relating to the control of goods to and from the UK and relating to the administrative status of legal entities established in the UK and carrying out business in France. The orders define the conditions pursuant to which economic activities related to the UK and goods flowing to and from the UK can carry on.
The orders provide, in some instances, pragmatic adjustments to existing French legislation, unusual exemptions, and simplified administrative procedures and shorter delays to allow regularisation of the status of corporates or individuals concerned.
By way of example, the orders cover the following matters:
- The carrying on by the beneficiaries of licences and authorisations for the transfer of products and materials (e.g. satellites, space rockets, etc.) to the UK, delivered pursuant to Articles L.2335-10 and L.2335-18 of the Code of Defense, prior to the exit of the UK, of the supply of such products and materials until the term of such licences and authorisations
- The access of French entities to interbanking payment and settlement and delivery systems of third-party countries (including, of course, the UK) by ensuring the final nature of
transactions effected through these systems
- The designation of a competent authority to supervise activities linked to securitisation
- The introduction of specific rules for the management of certain collective investments
- The continuity of the use of framework agreements (typically ISDA documentation) in the realm of financial services
- The “sécurisation” of the conditions in which agreements entered into prior to the loss of recognition of licences granted to UK entities in France will be performed
- The continuity of the transport of persons and goods between France and the UK through the Channel tunnel
The obvious aim of the orders is to preserve the interests of France and the status of French citizens and other persons whom European legislation protects.
Last but not least, a simplified temporary procedural regime is envisaged to enable the carrying out of works needed to build, modify or develop, with a degree of urgency, premises, facilities or port, train, airport or road infrastructures, as required to re-establish a control of goods to and from the UK.
The consequences of these measures could greatly affect not only the property of individuals, but also that of corporates, with a probable impact on their activities, which may not be neglected. Indeed, derogations and adjustments brought changes to the legislation
relating to expropriation, urban planning, zoning, preservation of cultural or historical sites, roadway, public domain, public procurement, rules applicable to maritime ports, public consultation and environmental assessment. It is clear that the wording of the orders was dictated by the urgency of the actions to take.
Other issues French corporates will face include:
- The transfer of personal data to the UK
- The export/import of goods
- The access to funding to the extent it used to be provided by UK entities