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Brexit: Answering questions from the screen sectors

Tue 15th Jan 2019

Brexit will change the way UK businesses interact with the EU, including those working in the screen sectors. The BFI is working closely with both government, industry and European partners to help secure the best possible outcome for the screen industries, enabling us to sustain our close working relationship with the EU.

This page - taken from the BFI's website - provides concise answers to some of the key questions the screen industries have on Brexit. If you have additional queries or concerns, please email [javascript protected email address]

Last updated: 16 January 2019

When does the UK actually leave the EU?

The UK formally leaves the EU on 29 March 2019.

And what happens next?

This is still uncertain.

If the UK and the EU reach an agreement on the terms of the UK’s exit, as well as an outline of their joint aims for a future relationship, the UK will enter a ‘transitional phase’ after March 2019. The UK and the EU will negotiate the terms of their new relationship during this phase. The UK will continue to follow the rules of the EU throughout this period, with UK nationals continuing to be treated as EEA citizens. It is expected this would last until the end of 2020.

If no deal is reached on terms of the UK’s exit from the EU, no transitional phase will take place and negotiations on a new relationship will cease. The UK will revert to ‘third country status’ with the EU, placing restrictions on processes ranging from trade to mobility of people.

Will the UK and the EU reach a deal?

The UK Government has negotiated a provisional ‘withdrawal agreement’ with the EU, setting out the terms of its exit, as well as a political declaration outlining their joint vision for a future relationship. These required ratification by both the UK and European Parliaments to take effect.

Both documents were endorsed by the EU at a European Council summit in November 2018. However, on 15 January, the UK Government lost a vote in the House of Commons needed to begin putting this agreement into effect.

The House of Commons still has until March 2019 to secure a deal approved by both the UK and the EU. In order to achieve this, the UK may seek EU approval for amendments to the draft agreement, which must then be ratified by both the UK and EU Parliaments. If this process of ratification doesn’t happen, then a no deal scenario will be triggered.

Each answer below sets out what the screen sector should expect in both ‘deal’ and ‘no deal’ scenarios.

What does Brexit mean for the Creative Europe programme?

This question can be split into two: what Brexit means for the UK’s participation in the current Creative Europe programme, which runs until 2020, and what it means for its participation in the longer term.

The EU and UK have provisionally agreed that if a deal is reached, the UK can participate in current Creative Europe programme until it ends in December 2020. UK projects will be able to apply for funding right up until this point, with successful applications receiving funding as normal, even where their funded activity is set to take place after December 2020.

In a no deal scenario, the UK’s participation in Creative Europe will end as soon as the UK leaves the EU in March 2019. The Chancellor has guaranteed that HM Treasury will replace funding for those organisations/projects who had been selected for funding by the EU by this point. However, the UK will no longer be eligible to submit new applications for funding after this point. It is as yet unclear what will happen to applications that have been submitted but not selected by March 2019. Creative Europe Desk UK set this out in advice published in November 2018.

In the longer term, a new Creative Europe programme is due to take place 2021-2027. The declaration on the future of the UK-EU relationship published in November set out plans to negotiate the UK’s continued participation in cultural programmes post-2020 in the event of a deal. The Prime Minister has also said the Government intends to secure continued access to EU cultural programmes post-Brexit. If a withdrawal agreement is reached by 2019, the UK and EU will then begin to negotiate on whether such participation is possible.

The BFI is working with DCMS and other stakeholders to make sure proper financial support is available for the screen sector in every eventuality.

What will happen to freedom of movement?

Government has been clear that freedom of movement will end after the UK leaves the EU. If the UK and EU have reached a withdrawal agreement on their new relationship by March 2019, it will continue until the end of the transitional phase in December 2020, or sooner if both parties manage to agree a new relationship before this. UK and EEA nationals will be able to travel as normal between the UK and the EU up until this point. If no deal is reached, it will end at the point of exit in March 2019.

Is there a plan for a new immigration system?

The Government published an ‘Immigration White Paper’ in December 2018, setting out its plans for a reformed immigration system. This system will treat EEA citizens as ‘non-visa nationals’. This means they will be subject to the same rules as citizens from countries including the US, Canada and Japan.

Under this plan, all travellers to the UK and the EEA will have to obtain simple security checks before travelling in future. Both the UK and EEA systems will be simple, quick and low-cost, functioning in a similar manner to the US’ ESTA system.

How will this new immigration system work for those coming to the UK on a permanent basis?

Non-visa nationals looking to take up permanent employment in the UK (such as vfx workers) will need to obtain a tier 2 visa. This requires sponsorship from an employer, who must pay a ‘skills charge’ to make the recruitment. Workers must meet a minimum salary requirement in order to be eligible for a tier 2 visa. The Government plans to consult on the appropriate level for this requirement in the coming year. Workers will also be required to have a qualification at A-level (or equivalent) or higher. The White Paper set out plans to remove the annual limit on tier 2 places.

The rules for those coming to fill roles where the UK has skills shortages will be relaxed. The Government has commissioned a review of its ‘shortage occupation list’, which sets out these roles. It has pledged to do so on an annual basis in order to track skills shortages in the UK.

How will this new immigration system work for those travelling to the UK on a short-term basis?

Non-visa nationals moving for short-term work, such as to join a UK production, will be able to do so for up to three months without a visa. They will only require a ‘certificate of sponsorship” from their employer, which is cheaper and easier to obtain. For periods longer than 3 months, workers will require a tier 5 visa. The system for obtaining this will remain as it does currently. Non-visa nationals travelling to the UK for reasons other than employment, such as shooting on location or attending a film festival, will be able to visit for a period of up to six months without the need for a visa. However, rules for short-term movement for EEA workers will be subject to the UK’s negotiations with the EU on their future relationship.

How about UK citizens travelling to the EEA?

The EU has outlined plans to treat UK citizens as non-visa nationals even in the event of a no deal, allowing them to travel to the Schengen area without a visa for short periods of time. This is subject to the agreement of the European Parliament and a reciprocal offer from the UK. The UK has yet to confirm its plans for the short-term mobility of EEA citizens in a no deal scenario.

What will happen to EU citizens living in the UK?

The UK and EU have reached an agreement on rights for those EU citizens already in the UK, as well as those arriving before the end of the transitional phase. These citizens will be able to apply for ‘settled status’ after five years in the UK, allowing them to stay here permanently. Anyone that has not been in the UK for long enough by the end of the transitional phase can apply for temporary permission to stay until they have reached the five years required. Application processes will open later this year.

The UK has stated its intention to honour these commitments even in the event of a no deal. However, as there would be no transitional phase, this guarantee would only apply to those EU citizens who are resident in the UK by March 2019.

The UK cannot unilaterally guarantee the rights of UK nationals currently living in the EU. It is making strong representations to the EU to provide similar guarantees for UK nationals in the event of a no deal.

Will Brexit affect UK tax reliefs?

The UK’s Creative Sector Tax Reliefs will not be affected by Brexit — this includes those available for film, high-end TV, animation, childrens’ TV and videogames. In the BFI’s recent Screen Business report, the Chancellor restated that the “government is committed to supporting [the UK’s] highly-skilled and innovative creative industries through creative sector tax reliefs”. Content will still qualify for the Tax Relief if it passes the UK’s relevant cultural test. Creative sector cultural tests will also continue to recognise EEA content and personnel regardless of whether the UK secures a deal with the EU.

Some minor changes will be required if the UK is to continue to qualify for incentives in some EU member states after it has left the EU. UK Government, in conjunction with BFI, is working to ensure that member states reassess the mechanisms by which they assess the eligibility of content and personnel for these incentives to ensure the UK still qualifies.

These changes will have to be made in both a ‘deal’ and ‘no deal’ scenario. If there is a deal, UK personnel will have EEA status – and thus will be able to quality for cultural tests until the end of the transition period. However, in the longer term, amendments will be required for UK content and personnel to qualify post 2020. In the event of no deal, UK personnel will have EEA status until 29 March 2019. Those planning on accessing other countries’ incentives should seek advice from the BFI.

In addition, there are no major changes expected to the UK’s State Aid regime under either deal or no deal. This regime helps regulate how Government provides help to private industry, ensuring a level playing field for businesses operating across the UK and influencing their level of competitiveness relative to international counterparts too.

Will the UK still be able to co-produce with EU partners?

Yes. All co-production agreements including the bi-lateral co-production treaties and the European Convention on Cinematographic Co-Production signed by the UK will remain in place after Brexit. The UK’s bi-lateral treaties with Australia, Brazil, Canada, China, France, India, Israel, Jamaica, Morocco, New Zealand, Occupied Palestinian Territories and South Africa form part of UK legislation and therefore are not affected by Brexit. The European Convention on Cinematographic Co-production is governed by the Council of Europe, not the European Union, and the UK will continue to be a signatory.

Will a new trade agreement with the EU cover the screen sectors?

The political declaration voted on by Parliament in November set out the framework for the future relationship between the EU and the UK, and sets out intentions for negotiation on numerous areas of importance for the screen sectors  — including participation in EU programmes like Creative Europe, intellectual property, and movement of people.

If audiovisual services are excluded  — as they have been in previous EU trade agreements  — this will primarily affect broadcasters based in the UK which are broadcasting to EU Member States, since there will be no possibility of retaining the country of origin principle. In this scenario, UK-based broadcasters may need a new licence. The Government has provided technical advice to broadcasters and video on demand providers, in the event of no deal, which can be found here.

Will UK films and TV programmes still count as “European”?

Even if AV is excluded from a UK/EU deal, or in the event of no deal, UK content will still count towards quotas on “European works” for broadcasting and video-on-demand services in Member States. This is because European Works classification requires a programme to originate in either an EU country or a non-EU European country which is party to the European Convention on Transfrontier Television, to which the UK is party and will continue to be after we leave the EU.

In the event of no deal the quota provisions of existing AVMSD will continue to apply in the UK.

Will Brexit affect laws on intellectual property?

The UK and other EU member states are party to the main international treaties on copyright and related rights. Under the rules of these treaties, countries provide copyright protection for works originating in or made by nationals of other countries. These rules help underpin copyright legislation in all Member States of the EU and do not depend on the UK’s membership of the EU.

There is also a body of EU law on copyright and related rights that goes beyond the provisions of the international treaties, including several cross-border copyright mechanisms. These mechanisms are unique to the EU and provide reciprocal protections and benefits between EU member states.

If the way is cleared for a future trade agreement between the UK and the EU then the place of intellectual property legislation, including copyright, will be a subject of negotiation in that agreement.

In the event of a no deal, the UK’s continued membership of the main international treaties on copyright will ensure that the scope of protection for copyright works in the UK and for UK works abroad will remain largely unchanged. However, in the event of no deal, the UK will be treated by the EU and EEA as a third country and the reciprocal elements of EU law on copyright will cease to apply to the UK.

For the screen sector, these mechanisms are:

Portability of online content service: The Portability Regulation will cease to apply to UK nationals when they travel to the EU. This means online content service providers will not be required or able to offer cross-border access to UK consumers under the EU Regulation. UK consumers may see restrictions to their online content services when they temporarily visit the EU.

Country-of-origin principle for copyright clearance in satellite broadcasting: UK-based satellite broadcasters that currently rely on the country-of-origin copyright clearance rule when broadcasting into the EEA may need to clear copyright in each member state to which they broadcast. Broadcasters may want to consider whether they need to seek additional copyright permissions.

Orphan works copyright exception: UK-based Cultural Heritage Institutions that make works available online in the EEA under the exception may be infringing copyright. Institutions that currently use the exception may want to consider whether they need to remove works from their websites or limit access to content on a geographical location basis in the EEA.

How would leaving the customs union affect the AV sector?

Leaving the customs union could result in taxes on any goods traded across the UK/EU border, increasing the cost of trade to businesses. As the UK screen sectors mainly trade in services rather than goods, leaving the customs union is not as significant as it is for other sectors. However, it will affect our ability to move equipment around the EU temporarily for filming purposes. A new system for doing this will form part of negotiations on our new relationship.

What about the temporary movement of goods, such as filming equipment?

If a deal is reached, movement of goods will continue as normal throughout the transitional phase. Beyond this, the terms of movement will be subject to negotiation with the EU. The political declaration on the future relationship between the UK and the EU recognised the importance of temporary movement of objects and equipment for ongoing cultural cooperation. It set out plans to develop the smoothest possible arrangement for the movement of goods between the two, while recognising the importance of checks after the UK leaves the single market. An EU trade agreement with Japan, as well as a draft agreement with Chile, make special provision for the temporary movement of cinematographic equipment.

In a no deal scenario, temporary movement of goods between the UK and EU will be subject to rules broadly similar to those in place for temporary movement of goods with other non-EU countries. While precise rules vary depending on the nature of the goods to be moved, examples of processes to be followed may include the use of ATA carnets or customs declarations.

What is the Culture and Education Accord?

Whilst the UK is leaving the EU, we are not leaving Europe, and — recognising the UK and EU’s common heritage  — the UK still wishes to play an active and essential part in European culture. As such, the UK Government and the EU are keen to discuss an agreement on culture and education as part of the future partnership. The UK has a long history of collaborating with European partners through multilateral and bilateral initiatives across education, civil society, sport and creative and cultural industries, and a positive future relationship that reflects our shared values and history, and that will support the growth of culture, arts, sports and creative industries in the UK and the EU is to both parties’ mutual benefit.

An Accord could look at a number of key areas of mutual benefit, including:

  • potential continued participation in EU cultural and educational programmes where mutually beneficial;
  • temporary movement of cultural and sporting goods to support tours, events and production, in accordance with our wider proposals on goods;
  • protection of cultural property by supporting the return of cultural objects where these have been unlawfully removed; and
  • a statement of continued cooperation with EU cultural and educational events, groups and fora where we have shared objectives and values.

The Accord could also point to the importance of mobility for cultural professionals in order to facilitate ongoing cooperation.

What does Brexit mean for data transfers?

If the UK leaves the EU in March 2019 with no agreement in place regarding future arrangements for data protection, the legal framework governing transfers of personal data from organisations (or subsidiaries) established in the EU to organisations established in the UK would change. Companies that transfer personal data between the UK and the EU should read the Government’s advice here.