REPORT: Brussels has already started shutting Britain out of billion euro contracts

LONDON — Brussels has started freezing out British firms from contracts worth billions of euros and urging them to decamp to other EU countries, according to an internal memo seen by the Financial Times.

The memo, written by senior EU officials, reportedly tells staff to encourage the UK’s private sector to consider the need “to have an office in the EU” and prepare for the “legal repercussions” of Brexit.

Britain’s two-year exit process from the European Union began in March when Prime Minister Theresa May triggered Article 50. The note outlines how Britain is set to lose out financially even during the two-year period that it remains in the EU.

The memo says that agencies should “take account” of the fact that Britain will be a “third country” — a country outside the EU — in two years. In practice, that means awarding billions of euros worth of contracts for research projects or services to countries which are remaining in the EU.

The memo states: “Apart from the legal requirement for a contracting party to be established in the EU, there may be political or practical reasons that speak in favour of contracting parties established in a specific member state, not only at the conclusion of the contract, but also throughout the duration of the contract.”

It also advises them to avoid “unnecessary additional complications” with the UK before it leaves the bloc in 2019, and tells them to prepare to “disconnect” the UK from sensitive databases — potentially the same day that Britain leaves the EU.

It said that companies who move data around the EU should consider their legal arrangements, if a data transfer deal with Britain does not prove possible by the time Britain leaves the EU.

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