The Brexit transition period has now come to an end, and a trade agreement has been reached on the UK and EU’s future relationship.
What does this mean for games, and how will the industry be affected? Here, Ukie provides an overview on the major areas impacting the games industry – from data flows, to changes to trade.
Continuing the flow of data between the UK and the EU is a major issue for our members.
With the UK becoming what is known as a third country to the EU, there were concerns that the free flow of EU data into the UK would cease come January 1st 2021.
As a data adequacy agreement was not included in part of the trade deal, a temporary bridging arrangement has been agreed to allow data to continue being transferred from the EU to the UK for four months, which may be extended up to six months. During this time, the EU has committed to completing its ongoing adequacy assessment.
The UK Government remains confident an adequacy agreement will be reached within this time. However, it is still advised as a measure of contingency that games companies put in place alternative measures such as standard contractual clauses before the end of the temporary bridging arrangement.
This is because although achieving a data adequacy agreement is very much in the interest of both parties, and despite how data regulations between the two are currently broadly the same (the GDPR is retained in domestic law now the transition after the end of the transition period and so the key principles, rights and obligations remain the same), the UK can expect more scrutiny by the EU in how it processes its data as it becomes a third country.
Physical Trade – CE Marking
If you currently manufacture goods for or distribute goods to the UK market with the CE marking, there are a few actions you must take.
Products which previously required CE markings will need to carry the new UKCA marking for importation into Great Britain. However, please note that Northern Ireland will still require the CE marking. Products are allowed to carry both the UKCA and CE until there is divergence between the two; divergence is not expected to occur for the foreseeable future.
Businesses should endeavour to phase in the UKCA marking as soon as possible. However, to allow businesses time to adjust, CE marked goods can continue to be placed onto the GB market until 1 January 2022. Existing stock already fully manufactured, CE marked and ready to be placed on the market before 1 January 2021 do not necessarily have to meet this deadline.
Until 1 January 2023, you have the option to simply affix the UKCA marking on a label affixed to the product, or on an accompanying document (as opposed to physically on the product).
Manufacturers based within Great Britain will need to identify a representative based within the EU whose name and address can go on the product as a contact point for the Market Surveillance Authorities. This can be a contact with importer responsibilities or authorised representative. The latter is a legal party that acts on behalf of the manufacturer and ensures products comply with UKCA/CE markings.
The opposite is also the
case for manufacturers based within the EU who export into the UK.
Most importantly, Great Britain will no longer recognise authorised representatives and responsible persons based in the EU. If you use an authorised representative, you will require one based in the UK for products being placed on the GB market. Again, the vice versa also applies. You will have to appoint this as soon as possible.
The address for the authorised representative must then be included on product labelling where the UKCA mark has been affixed.
However, while we believe this advice to be correct, we do advise businesses to review their own support chains and seek legal advice for their individual circumstances as this is a complicated area.
The digital trade of software and games is another key aspect for games companies to consider.
If you are a UK business supplying digital services to consumers in the EU, you must either register for the Non-Union VAT MOSS scheme in an EU member state, or register for VAT in each EU member state where you supply digital services to consumers.
Equally, supplies of digital services to UK consumers are liable to UK VAT.
This is particularly relevant for marketplace platforms.
The UK is no longer bound by EU state aid regime. This means there is potential for the UK Government to enact more beneficial subsidy schemes, however the terms of the Brexit agreement means that there are still limitations over what the Government (or the EU) can introduce.
UK companies will also miss out on EU funding schemes such as Creative Europe and Ukie will continue to work with Government in the development of schemes which can support the games industry including the Global Screen Fund announced in the November Spending Review.
The end to freedom of movement is a key pillar of Brexit. British citizens will no longer be entitled to work in EU member states without a visa, and vice versa.
Despite this, UK nationals do not generally need a visa when travelling to and from within the Schengen area for short stays of up to 90 days in a rolling 180 day period. This includes short business trips or stays related to attending conferences, and trade fairs.
In addition to this, each Member State has its own list of activities it allows to take place visa-free. You can check them here.
Meanwhile, for recruiting EU workers, UK employers should take note of the new immigration system in place which now applies to both EU and non-EU nationals.
Employers will need to obtain a sponsor license to issue work vias to foreign workers. It is recommended that employers apply for sponsor licenses now in order to prepare.
Employers should also ensure that any EEA employee currently in their UK organisation should apply to the EU Settlement Scheme. The deadline for this is 30 June.
Additional info on this:
IP rights are broadly unchanging. The trade agreement enforces a baseline of IP rights which neither party can weaken – however, it also provides flexibility for both sides to go further in the protection and enforcement of IP rights in the future.
Other notable aspects
The trade agreement includes commitments from both the EU and the UK Government to provide clear and accessible online information about the agreement. We look forward to clear guidance being made available for our games companies.
In the meantime, should you have further questions on Brexit, feel free to contact the Ukie policy team at email@example.com. We are also able to connect you to one of our legal members.
We will keep this updated as the situation develops.
With thanks to Charles Russell Speechlys, Harbottle & Lewis, and Sheridans
Further points of information: