Brexit Briefing:Transport Sector perspective

21 Pages·2016·0.44 MB·English

Brexit Briefing:
Transport Sector
perspective
July 2016
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Introduction
On 23 June the OUnK 2v3o tJeudn eto t hleea UveK twheil lE vUo.te on its future in the EU.
This discussion Tphaips edri sceuts soiount spoamper b sreietsf foauctt s oamnde ibsrsiueef sf arcetgsa rredginargd tinhge EthUe dEeUc ivsoiotne and highlights some areas of
areas of considecroantisoidne froart iUonK ftorar nUsKp oTrrta cnosmpoprat ncioems poapneireast inogp einra thineg A inv itahteio An,v Liaotgioisnt,i cLso g&i sPtiocsst ,& S Phoipspt,i nSgh iapnpdin g and Rail & Bus
Rail & Bus sectosresc. tors.
We also exploreIf h yoowu wKPoMulGd liisk eh etolp dinisgc iutss c lyieonutrs b ausssiensess stehse rreisskpso.nse to the EU vote and how KPMG may help please speak
with your KPMG contact or one of the contacts listed in this discussion paper.
If you would like to discuss your businesses response to the EU vote and how KPMG may help please
speak with your local KPMG contact or one of the contacts listed in this discussion paper.
Timing, process,
outcomes
and implications
On 23rd June 2016 the UK voted to leave the EU
Based on the 23 June 2016 referendum, a possible timeline is shown below:
UK completely
removed from EU
Businesses should
June 2016 referendum membership
evaluate what risks
and/or opportunities
Brexit would present for 2017 2018 2019
them and prepare
2016 2017 2018
accordingly
Defining the terms of
Determining the nature of the UK’s relationship with the EU
the UK exit
Economic uncertainty may be felt immediately following a vote to leave the EU and persist while
Immediate impacts
the precise terms of exit are thrashed out
Each EU regulated sector would face different
regulatory conditions
Implementation of
Companies benefiting from EU agreements would see
changes
an impact on the conditions applying to their access to
the single market
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(“KPMG International”), a Swiss entity. All rights reserved.
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Possible post referendum scenarios
Exit
Membership of Membership of Other alternatives
EEA EFTA but not EEA
(like Switzerland)
(like Norway)
• Participation in the EU • Participation in inter- UK leaves both EU and
internal market but no governmental EEA and:
access to EU FTAs organisation promoting
• Enters into a customs
free trade
• Member of EFTA union with the EU (like
• Free movement of • Participate in EFTA free Turkey) OR
trade agreements
goods, services, people • Negotiates a new free
& capital • Not part of EU VAT area trade area OR
• Not part of EU VAT area • Negotiate a bilateral • Becomes an
• Certain principles of EU trade agreement with independent member of
law apply re: regulation the EU the WTO
& employment
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What are the implications?
For clients and their businesses?
For their customers?
BREXIT
For the market infrastructure?
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What will change?
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People Services Capital Goods
… and many other regulatory, economic, employment law, other legal and
tax aspects too
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Implications of a Brexit – sector overview
Transport is one of the EU’s most strategic common policies with EU and national regulators having created a complex
regulatory environment. Brexit means that UK domiciled transport operators would no longer be required to conform with
EU regulation. This slide poses a selection of questions for operators in each sub-sector.
Business Business
— What is the impact on the business if access to European destinations is restricted — How will shipping companies respond to the uncertainty, and potential cost and
whilst country by country bilateral access is negotiated (including continued access to revenue implications, whilst trade agreements are renegotiated so that UK laws
the USA)? interact with EU laws and international requirements (i.e. UN compliance)?
— Will the possible removal of EU restrictions on foreign ownership rules open — Is the UK’s pre-eminence in maritime insurance at risk with a Brexit? How will the
investment opportunities in UK airlines? Conversely, will UK domiciled investors be complexity and cost of insuring ships and cargoes in the UK and EU be affected?
considered foreign and restricted from owning more than 49% of European airlines? Customers
Customers — What impact will customers experience if shipping companies are faced with
— What is the impact on choice, cost and convenience for customers? How will ticket increased costs (including customs duties)?
prices may be affected (if any)? Will destination choice and convenience (i.e. visa free — How will the added complexity arising as contract terms are amended to
travel etc.) be restricted on a Brexit? accommodate both EU and non-EU status of counterparties impact customers?
Market infrastructure Market infrastructure
— With AOC’s issued on a national basis under harmonised European — With 4 of the 5 largest global shipping companies EU based
rules, would the UK rules change or remain as is on a Brexit? (Maersk, MSC, CMA-CGM and Hapag-Lloyd) and with some of the
— Will EU261 airline consumer protection for flight delays/cancellations, world’s largest ports in the EU (e.g. Rotterdam, Hamburg,
or an equivalent, continue to apply to UK travelers? Antwerp, Piraeus), what impact does a Brexit have on continued
UK market access?
Transport
Business Business
— How will freight traffic between UK/EU be affected? Is it likely that — Would UK bus operators continue to be subject to EU emissions
import duties would be imposed (and crucially imposed upon us)? standards on a Brexit?
How would customs duties and processes be affected? — How would competition for rail franchise tendering be affected in
— What is the impact on freight operators business model on a Brexit? the UK/EU if “foreign” bidders are restricted or decline to
Customers Customers participate?
— I
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Market infrastructure Market infrastructure
— Will the USO, which is an EU law directive, be loosened on a Brexit? What — With the UK having influenced the development of Technical Specifications for
impact does this have for RMG? Interoperability (TSIs) in the European rail industry, would the UK elect to continue to
— How will the market landscape change if competition rules are relaxed? For comply with these directives on a Brexit?
example, what would happen if RMG were no longer required to continue to — Will the 4th Railway package which aims to remove the remaining barriers to create a
provide last mile services to competitors? single European rail area apply to UK operators on a Brexit?
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Implications of a Brexit – cross sector impacts
In addition to the business, customer and market infrastructure questions posed by the Brexit decision, there are
additional questions that apply across all sub-sectors on the Transport industry. Whilst this is not intended to be
comprehensive it is intended to highlight some key areas for consideration.
Remain
Staffing Ease of intra-EU Impact on State Public
travel Aid rules procurements
regulations
• What is the legal status of • What is the impact on intra- • EU regulations focus state • How will local authorities
EU citizens employed by UK EU tourism if cost, choice aid on addressing market and government tender
based transport operators and convenience dissuade failures and not unfairly processes for transport
i.e. at airports, on trains, UK travelers? influence competition provision be impacted by a
tubes, airlines etc.? • What is the impact on between member states Brexit?
• Similarly, what is the status airlines, long distance TOCs, • Outside of the EU, would UK • Would the UK/EU restrict
of UK citizens employed in and bus/coach operators? regulators have the ability, “foreign” bidding for
EU operations by UK based and would they consider, UK/European rail franchises?
• How will business travel
transport companies? the use of state aid to
between UK/EU be affected • What would be the impact
support the transport sector
• What is the impact on UK by a Brexit? on UK operators of any
in its competitiveness if
transport operators if they changes to public
required?
employ “foreign” workers procurement regulations?
i.e. visa requirements etc.?
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Impact on significant regulations
The UK has on many occasions been a driver for change within the area of European
transport regulation. This potentially suggests that Brexit would not have a significant
impact on the underlying legislation and approach, although whether the UK would
continue to apply the EU standards post Brexit if the industry demanded change is unclear.
Some
rules
Some Some rules will be could be
rules may maintained tightened
be
relaxed
.
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