Brexit and collection of your trade claim

March 29th 2019 England, Scotland, Wales and Northern Ireland will leave the EU. With this so-called Brexit the United Kingdom becomes a country outside the European Union. From that moment forward other trade-agreements will be applicable (if any). But what about the Brexit and the collection of your trade claim?

 At this moment parties agreed in principal to a time-limited implementation period till December 31st 2020. During this period United Kingdom will still be treated as a member of the EU. This was agreed definitively past weekend. However this implementation period is part of the larger total Withdrawal Agreement. Therefore this period will be only absolutely certain when there is a definitive Withdrawal Bill in the UK.

No worries

Negative ideas about the Brexit and what will happen afterwards are bussing around. But is it neccassery to worry so much? True, the UK economy is going through a tough patch due to Brexit uncertainties. Therefore it is eminent that you prepare for any event by examining the implications of Brexit for your business. After Brexit, Great Britain will not adept new laws stating that paying invoices coming from the mainland of Europe are not to be paid. Neither will there be the same in the EU for invoices from the UK.

After Brexit, goods and services rendered from the EU to the UK and the other way around, will have to be paid. Probably there will be even more emphasise on that matter as the UK is eager to boost confidence in the UK as a trade partner. The UK plans on working together with the EU to ensure the UK remains covered by those international agreements, including free trade agreements, to which it is currently a party by virtue of the UK’s EU membership[1].

Expectations after Brexit

Expectation from our office in the United Kingdom are clear. At least until the end of the transition period, so until December 31st 2020, the simplified EU court procedures like the European Payment Order[2] and the European Small Claims Procedure[3] will remain in place and to these procedures EU law will be applicable. These legislation was already mentioned in the Draft Agreement of March 2018 but was not yet among the legislation that was certain to be continued. Most probably they will be in the draft that will be issued after last weekend.

Existing national proceedings

Next to that, England and Wales already have their own fully integrated, automated and simplified system for uncontested claims. Scotland has its own national Order for payment as well as a Small Claims Procedure. These national proceedings basically equal the European procedures. The proceedings in Northern Ireland are just a touch more complicated but also here still the national ruling is that invoices need to be paid. The assured expectation however is that all these countries, as EU procedures since long have been part of their national legislation, will preserve these procedures. This creates trust for you as entrepreneur, as you would like to remain doing business with the UK after Brexit.

Already agreed-to legislation

In the meantime several regulations that are intertwined with the above mentioned procedures for collection proceedings, have already been accepted and will be continued after Brexit. Among others the regulation governing the choice of law applicable between trade partners also called Rome I[4] and Rome II[5] will be continued by the UK after Brexit. As well as the European rules on award of contracts were already accepted by both parties in the negotiations. As said the aforementioned simplified procedures for collection were not yet definitively agreed upon but we are sure this will be in the draft derived from negotiations in the past weekend.

All points agreed to in March 2018 are in the Draft Agreement  on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community[6]. Be aware, this draft is only applicable during the implementation period thus until December 31st 2020. During that period parties will negotiate definitive agreements and legislation that will become applicable after the implementation period.

Don’t get yourself scared by Brexit implications. Prepare but be assured that trading with the UK and vice versa will be possible and will be lucrative. If you apply strict rules on your credit management and debt-collection combined with a good debt-collection partner in the United Kingdom, you will have nothing to worry about really.

[1] See: Open letter to business on Implementation Period, 26 January 2018

[2] Regulation (EC) No 1896/2006 of the European Parliament and the Council of 12 December 2006 creating a European order for payment procedure

[3] Regulation (EC) No 861/2007 of the European Parliament and the Council of 11 July 2007 establishing a European Small Claims Procedure

[4] Regulation (EC) No 593/2008 of the European Parliament and the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I)

[5] Regulation (EC) No 864/2007 of the European Parliament and the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II)

[6] TF50 (2018) 35 – Commission to EU 27

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  • European Credit Control handles our complete credit management. Very open and direct communication. Their support helps us to avoid debt-collection cases. For every company small or big i would recommend European Credit Control.

    Nico van der Zaan - Owner, Social Elephant BV

  • European Credit Control handles all our invoicing and credit management. Very satisfying. Our customers pay on time which gives us more cashflow, more time and saves money. Our customer contacts are better and we can focus on what we are good at: creating video content that make our customers happy. They also supported us in two legal matter at court which were done with great succes! They are to the point, fast and effective. Very satisfied.

    Patrick Don - Owner, Briteminds Media BV

  • European Credit Control has handled the collection abroad since 2011 to our full satisfaction. She cashing for us mainly within the EU but also in South Africa, Australia and New Zealand. ECC uses a system in which we can monitor all our receivables irrespective of the country of the debtor. This gives clarity in the handling. Where necessary, they use the abridged European procedures when it appears necessary to enforce the claim in court. Because these steps are taken in the country of the debtor, a great deal of money is saved. The rates for legal support are very favorable and tailored. We are happy with their service.

    Tom van den Hurk - Credit Manager EMEA & amp; APAC

  • Since June 2016, ECC manages the debt collection of our receivables. We send the reminders and reminders ourselves. If payment is still not forthcoming, we transfer the claim to European Credit Control. We are very satisfied with their service. The lines are very short and we respond quickly and clearly to our questions and e-mails. In addition, 95% of the items handed over are still collected and we even receive some interest and expense reimbursement. And if this amicable collection does not work then they also take care of the legal proceedings to the court. In short, a nice and good debt collection agency that is pleasant to do business and that provides the collection in a correct and neat manner.
    Fred van der Bruggen - Finance