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How Should the Advertising Industry Prepare for Brexit?

Tim Cross  16 December, 2020

The global pandemic has put the UK’s departure from the EU on the backburner for most of the year. But as the end of the transition period on December 31st approaches, the issue has come back to the forefront. And with no trade deal yet secured, there’s still a lot of uncertainty for the advertising and media industries around how their businesses will be affected at the start of next year.

Nonetheless, there are steps businesses can take to best prepare themselves for January 1st, despite continued uncertainty over whether a deal will be reached or not.

What changes on January 1st?

The transition period has allowed trade between the EU and UK to continue as normal, with the UK remaining within the EU’s customs union and single market as UK Prime Minister Boris Johnson attempts to secure a last minute deal in time for January 1st, 2021.

When VAN looked at Brexit’s impact on the advertising and media industries back in February, it was assumed that by this point either a deal would have been reached, or both sides would have agreed a deal was not possible and we’d be preparing for a no-deal scenario.

Neither of those are true. Deadlines to reach a deal have been repeatedly missed, not helped  by the need for both sides to spend their time and attention on tackling the pandemic. But in each case these deadlines have been extended in the hopes that an agreement could be reached.

The deadline cannot be stretched beyond December 31st. So either the UK and the EU reach a deal to set the terms of trade between the two at that point, or trade is governed by rules set by the World Trade Organisation (WTO).

How can businesses prepare?

This uncertainty around how the UK’s relationship with the EU will look from January 1st makes it difficult to prepare, but there are still steps businesses in the media and advertising industries can be taking now.

The British government’s support site lays out the basics, to help ensure business can still run in a no-deal scenario. These include:

  • Companies which transfer personal data between the UK and EU will need to make sure they’re still able to do so, via Standard Contractual Clauses or other similar means (the Information Commissioner’s Office has created an online tool to help create these contracts).
  • Broadcasters will need to ensure they have licenses to broadcast across the EU if they currently only have a UK license. And broadcasters should check if they need to change their contracts to broadcast licensed content outside the UK.
  • Large online businesses providing digital services to the EU should appoint an EU-based representative.

And industry trade bodies have been advising members on how best to prepare for a potential no-deal.

Digital advertising trade group IAB UK has created a checklist, which covers some of the same ground as the UK government’s advice.

The trade body recommends auditing current contracts to check for references to the EEA or EU, and see whether they need to be updated in light of the UK’s departure. And contracts denominated in currencies other than sterling might be exposed to currency risk, which companies should be prepared for.

The IAB also advises that companies which handle personal data should make sure they have categorised which data belongs to UK citizens and which belongs to EU citizens, in preparation for the UK creating its own set of personal data safeguards.

The Advertising Association, a trade group representing advertisers, agencies and brands, highlights a few further areas in its advice.

The AA said that companies delivering advertising services in the EEA should check the legal, regulatory and administrative barriers they may face in each specific EEA country. Advertising agencies are likely to find it harder to deliver services to any EEA state without an established presence there, and should check the documentation and criteria needed to establish themselves in those states. In some cases, there may be nationality or qualification requirements or an economic needs test, according to the AA.

And companies which temporarily move goods between the EU and UK, for example film equipment for short-term shoots, will face limits on the value of goods they can move to the EU for free. Companies might want to get an ‘ATA Carnet’ (essentially a passport for goods) to mitigate these costs.

Still holding out for a deal

But while these steps will help prevent unnecessary nasty surprises for media and advertising businesses on January 1st, those providing this advice are still hopeful that a deal can be reached.

“UK advertising businesses will all want to see a deal in place by the end of the transition period and failure to secure a post-Brexit EU trade deal would be of huge concern,” said Stephen Woodford, chief executive of the Advertising Association. “In 2018, the UK exported £3.7bn worth of advertising services to EU nations, accounting for 53 percent of overall advertising exports, and any uncertainty over mobility arrangements, cross-border services and especially data transfers would be bad for advertising, bad for trade and bad for the economy.”

“With negotiations ongoing, we fervently hope that the EU and UK can finally reach a mutually beneficial long-term agreement in everyone’s interests,” he added.

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