Brexit: Main take-aways from the Danish government's Brexit press conference

9.19.2019

On 18 September 2019 the Danish Government held a press conference where the ministers of taxation, foreign affairs and trade presented which initiatives were or would be undertaken to prepare Denmark for a no-deal Brexit on 31 October 2019.

Brexit taskforce

The Danish government will establish a taskforce in order to coordinate and implement measures to prepare for a 'hard Brexit' (i.e. a no-deal scenario). The taskforce will include ministers from all major ministries, here among the ministry of foreign affairs, finance, justice, taxation, trade, etc. 

Establishment of a reserve force

In preparation for the increased pressure that the Danish authorities expect to experience under a "hard Brexit" scenario, for example due to the need to clear all shipments from the UK through customs, a special reserve force will be implemented. The reserve force will be able to quickly provide assistance across both ministries and other governmental authorities.

The minster of taxation announced that he expected a 'hard Brexit' to result in an increase by up to 15% of goods to be handled by customs. 

Focus on aiding workers

The government intends to work closely with public employment agencies, so the agencies are equipped to provide guidance to individuals whose jobs are affected by a 'hard Brexit'.  

Provide increased information to SMVs

Recognizing that a 'hard Brexit' will mostly likely have the greatest effect on small and medium-sized companies (SMVs), the Danish government will intensify its efforts to keep SMVs informed on potential pitfalls and help their businesses continue as unhindered as possible. The Kromann Reumert Brexit team will of course follow such intensified efforts.

Specifically, regarding taxes and duties, a hotline will be established, and the ministry of taxation expects to publish over 30,000 sets of guidelines.  

Conclusion

The press conference underlines the fact that the Danish Government considers a 'hard Brexit a real risk and that it may likely take place on 31 October 2019. The fact that the government has found it necessary to provide increased information to SMVs supports our own experiences that the preparation level of many SMVs is inadequate. 

We recommend unprepared SMVs to quickly establish their own internal Brexit taskforces. The taskforce's primary objective will be to analyze the business' supply chain, sales channels towards UK and flag all interactions with UK counterparts, for example customers, suppliers or employees. The contractual basis for the flagged UK counterparts should be analyzed with an immediate focus being on:

a) Can we continue to fulfill our obligations to the counterpart (i.e. do we expect delays or increased administrative burdens in light of Brexit)?
b) If the obligations following from the contract become more burdensome, which party will have to bear the costs associated with the more burdensome fulfillment?
c) Can the contract be terminated or altered due to Brexit (i.e. how is force majeure defined and/or is there a so-called 'hardship' clause)?

If your business or taskforce has questions regarding the interpretation of your contracts in the light of Brexit or has other questions regarding the impact of Brexit on the existing business, we are happy to elaborate further.