One area in which the Direct Selling Industry won’t be affected by BREXIT
(Direct Selling and BREXIT – the law)
Uncertainty is perhaps the worst enemy of business. BREXIT is shrouded in uncertainty, as regards timing and substance, even down to whether there will be a “deal” or not, whether the UK will remain a member, or possibly leave and re-join.
So let us venture to suggest one area in which we dare to be confident that there will be no change of any substance in the short, medium, or long term, namely the law.
UK law as regards direct selling has been derived from proposals originating both in the UK and the EEC/EU.
BREXIT does not raise any concern that the UK-origin law should be changed – quite the opposite, given the clamour for recovering sovereignty. EEC/EU-origin law was all implemented into UK law by virtue of UK legislation, so that will remain in force according to its terms and according to UK parliamentary procedures. Even the EU’s General Data Protection Regulation was brought into force in the UK by a practically identical Regulation of the UK Parliament, albeit under exactly the same name.
So the status quo is bound to prevail for quite some time, as there is no BREXIT-related need to change anything.
Why should the UK Parliament choose to change anything in this area? Leaving aside the contentious issue of the £200, 7-day limit, (which is itself unique to the UK and a feature of the UK-origin law) we are bound to think that changing anything in the UK law relative to direct selling in order to move out of line with the EU would make the UK a less attractive place for a direct selling business to be established. There will be quite enough costly friction for trade between the UK and the EU post-BREXIT without adding an element of regulatory inconsistency.
In one “legal” respect, BREXIT will make a change to the environment, in that the “freedom of establishment” principle will no longer be available to UK businesses (unless specifically part of a BREXIT deal), so businesses wishing to trade freely throughout the EU, whether originating in the UK or elsewhere, will need to be established as a company, a branch, or a subsidiary (as local rules require) in the EU. In this respect, BREXIT is already a minor bonanza for our colleagues in EU-resident law firms.