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Pitfalls in 24 languages

April 6, 2017 4:18 PM
By Chris Higman, LDEG member based in Germany

As Mrs. May was busy signing her Article 50 letter to Donald Tusk, which will have the effect of revoking my citizenship of the European Union, I was on a business trip to Indonesia. On returning to Frankfurt airport I went through passport control using the accustomed short queue labelled EU/EEA/CH. This made me conscious of the fact that in two years time I will have to use the longer queue together with my American, Chinese and Indonesian friends. That is unless the signs are changed. However there is not sufficient space on those signs to add a simple "/UK" sticker, so it will involve completely changing the signs at considerable expense. As a local taxpayer I can hardly approve of such expenditure, even if it does cause me personally some inconvenience. So it is probably the long queue in future.

There are, however, more serious issues, where the UK's departure from the EU will require changes to laws and regulations at a national or even regional level in the 27 remaining countries, if unintended consequences are to be avoided. One example is in banking regulation in Germany. As in most countries, banks are required to maintain a minimum amount of capital in relation to its risk-weighted assets. The actual regulation refers to government securities from EU countries, Switzerland, USA, Canada, Australia, Japan and a number of other OECD countries. The UK as a member state of the EU is not mentioned explicitly. If the regulation remains unchanged, then on the UK's departure from the EU, the UK stock will no longer qualify for this purpose. This might even have the consequence of a significant sell-off of UK securities, not only by German banks, but by banks in any country in or outside the EU that has framed its regulations in a similar manner - hardly what leaving the EU was designed to achieve. Or at least so I assume.

This item has been identified and as long as the German government decides to act, the problem can be resolved. But it raises another question. How much other national (or in some cases such as Wallonia or Catalonia even regional) legislation and regulation is framed on the assumption that the UK is a member state of the EU? And who is going to plough through laws and regulations in 27 or more jurisdictions in 24 languages to check what other unpleasant surprises are lying in wait for all concerned?