Trade in Services
2.1. Trade in Services
From 1 January 2021, regardless of the outcome of ongoing negotiations, the UK will no longer apply the rules of the EU’s Single Market for Services. This will mean an end to the automatic facility in EU law that has generally allowed UK businesses, as businesses established in an EU Member State, to provide services in another EU Member State. UK businesses will no longer enjoy such benefits as freedom of establishment, a common regulatory and supervisory environment, or the EU’s system of recognition of professional qualifications. The concept of ‘passporting’, which implies that authorisations issued by one Member State based on Union rules are sufficient to access the entire EU Single Market, will also no longer apply to the UK.
If you are an Irish company operating in the UK, or a business in the UK, including Northern Ireland, operating in the EU, you must now prepare for these changes to access rights and take steps to understand the impacts on your operations of any rules, procedures, and/or authorisations that control the provision of services in each jurisdiction.
The impact of these changes in the areas of Financial Services, Energy, the recognition of professional qualifications, and Public Procurement is set out below.
2.2. Financial Services
The risks to financial stability, the financial services sector, and consumers of financial services are considered to be relatively low as a result of extensive preparations already undertaken. Some level of market disruption will be unavoidable, but the financial system as a whole is expected to be sufficiently resilient to withstand it.
Whilst the ‘passporting’ of financial services between the EU and the UK will no longer be possible following the end of the transition period, in certain cases, the EU may recognise that the regulatory or supervisory regime of a non-EU country is equivalent to the corresponding EU regime. Temporary equivalence decisions have already been granted for financial stability reasons in a number of areas and the European Commission continues to assess if it is possible to adopt further equivalence decisions. For its part, the UK has introduced a Temporary Permission Regime (TPR), allowing for EEA firms to operate for a limited period of three years after the passporting regime ends while they seek authorisation from the UK regulators.
The 2020 Brexit Bill includes a number of measures which will minimise disruption including in relation to settlement finality and to enable UK and Gibraltar insurance undertakings and intermediaries to continue to fulfil contractual obligations to their Irish customers following the end of the transition period. Further information on the Bill can be found in section 1.5 of this Action Plan.
As a large transmitter of data between the UK and EU, the financial services sector will also be particularly impacted by the outcome of parallel discussions on data adequacy.
A disruption to the supply of natural gas, electricity or oil in Ireland as a consequence of Brexit is not anticipated.
Electricity and Gas
The Department of Communications, Climate Action and Environment (DCCAE) has worked with key State bodies including the Commission for Regulation of Utilities in Ireland (CRU) and the transmission system operators for electricity (EirGrid) and natural gas (Gas Networks Ireland), respectively, to ensure that they have updated plans in place to address a range of electricity and gas matters in areas such as the trading of electricity and natural gas.
In the case of electricity, the Withdrawal Agreement provides for the continued operation of the Single Electricity Market on the island of Ireland. However, in the absence of an agreement on energy issues, in the current EU-UK negotiations, the current ‘day ahead’ trading arrangements in place for trading across electricity interconnectors between EU Member States will no longer be possible between the SEM and Great Britain, with the UK becoming a third country and no longer part of the EU Internal Energy Market. This will result in a loss of efficiency in SEM trading. A number of contingency arrangements have been put in place to improve ‘intraday’ trading across the interconnectors and facilitate greater liquidity between SEM and Great Britain in that timeframe, such as multiple Nominated Electricity Market Operators (NEMOs) on the Great Britain side and the accommodation of complex orders in the three intraday auctions, scheduled to go live in September.
It is expected that the current rules for trading natural gas across interconnectors with the UK will remain the same. However, in the case of any future gas supply emergency disruption, the UK will no longer be legally bound by current EU law obligations to provide Ireland with assistance. Ireland is therefore continuing to work with our EU partners in the negotiations with the UK to ensure continued future cooperation on natural gas security of supply.
2.4. Recognition of Professional Qualifications
Existing EU professional qualifications will continue to be recognised in the UK and likewise existing UK qualifications will continue to be recognised in the EU. This recognition is supported by a number of measures including provision in the Withdrawal Agreement for the grandfathering of currently recognised qualifications.
Any person applying to have their qualification recognised for the first time from 1 January 2021 will no longer be covered by the EU’s Professional Qualifications Directive. The recognition of new EU qualifications in the UK and vice-versa, will continue to be possible following the end of the transition period, although this will be based on national rules and processes will be more complex.
Extensive work has been carried out by Irish regulators and competent authorities, across a vast array of areas, to prepare for this change. Outside of the framework provided by the EU, new arrangements will however be more complex and subject to the approach taken by individual regulators and competent authorities.
Recognition of Professional Qualifications – Fluorinated Gas (F-Gas)
Under EU Regulation EU 517/2014 (and associated implementing regulations) those working with F-Gas equipment (primarily in the refrigeration, air conditioning and heat pump sectors but also fire suppression, mobile air conditioning, solvents, and electrical switchgear) must be certified by an EU certification body, and the legislation also requires mutual recognition of certificates obtained in EU Member States. When the UK becomes a third country, arrangements for the mutual recognition of UK qualifications and certificates will cease to apply. Individuals who currently rely on a UK certificate will need to recertify in order to continue to operate in the sector and to avoid the potential need to retrain.
A recertification scheme, supported through widespread communications and stakeholder engagement, has seen 2,833 individuals with UK F-Gas certificates receive an Irish (EU-27) certificate to date, by way of mutual recognition of their UK certificate. The 2020 Brexit Omnibus Bill will allow for the re-certifying of individuals with UK F-gas certificates/qualifications to continue for a six-month period after the transition period ends (individuals can apply for recertification during the first four months of this period).
2.5. Public Procurement
The Withdrawal Agreement deals with ongoing public procurement during the transition period. The Agreement effectively provides legal certainty on public procurement procedures that are pending before the end of the transition period. These should be completed in accordance with EU law, hence under the same procedural and substantive rules as the ones under which they were launched.
In the remaining time within the transition period, the Government will work towards addressing the implications of Brexit on existing guarantees associated with EU procurement law, and assisting businesses to develop a high level of awareness of the implications of the end of the transition period on purchasers and suppliers involved in procurement.