When will Brexit happen?
The UK is expected to exit the EU on 31 January 2020.
What is being negotiated?
The UK government and the EU have negotiated a withdrawal agreement and potentially will negotiate thereafter a future relationships agreement and a future trade agreement.
Key issues in the withdrawal agreement, if approved and unchanged, include the following:
A Transition Period
The future Ireland/Northern Ireland settlement including border arrangements
- The UK will respect its commitments under the Good Friday Agreement including its commitment to avoiding a hard border.
- Northern Ireland will remain within the UK customs area, ultimately therefore trading with the rest of the world (including EU) on the basis of the UK's trade requirements.
- However, goods imported into Northern Ireland from the UK or other non-EU source will be subject to EU tariffs unless it can be shown that they are not at risk of being transferred on to the EU.
- A joint Committee will be formed between UK and EU during the transition period to set rules for identifying when goods are not at risk of being transferred on to the EU.
- In relation to certain other regulatory matters (including state aid and VAT) Northern Ireland will align with EU rules.
- UK/Ireland agreements can be reached to allow free travel across the border for individuals (the Common Travel Area).
The future arrangements for EU citizens in the UK and UK citizens in the EU
- The objective should be to provide reciprocal protection for EU and UK citizens to enable the effective exercise of rights based on past life choices (e.g. to live or work in other countries).
- Entitlement to rights (being EU citizens’ rights) will be assessed at leaving date.
- Citizens legally residing in UK/EU (and those living/working across a frontier) at the end of the transition period will continue to be permitted to do so.
- Family members will have rights to join such citizens.
- Applications for settled status will be smooth and streamlined.
- Those with permanent residence will not be charged for applications for settled status.
- EU Social security coordination will continue for such citizens.
- Citizens’ rights will be enshrined in primary legislation in the UK, will be directly enforceable before the UK courts and the UK courts will have due regard to the CJEU decision on citizens’ rights.
- The UK will set up an independent body to monitor the implementation and application of these rights under the agreement.
The size of the final financial payment to be made by the UK to the EU
- A methodology has been agreed to calculate the UK’s ongoing contributions to and return of funds from the EU.
- The UK will continue to contribute to the EU for 2019/20 (the Transition Period) as if it was a member state.
- The UK will remain liable for its share of the EU’s contingent liabilities at the leaving date.
- There are specific provisions for the EIB, ECB, refugee facility and European Development Fund.
- Space assets are excluded, the UK will no longer participate in the EU space program.
Brexit without a deal: how will Brexit affect trade?
If no UK/EU future relationship agreement is reached at the end of the transition period, the UK may be able to trade with the EU nations on World Trade Organisation terms. The impact would vary substantially across different sectors. Agricultural and automotive sectors may face particular challenges.
Tariffs for goods imported and exported would increase costs and may cause administrative obstacles to trade.
There may be obstacles to supplying services to EU businesses/individuals including prohibitions in some circumstances.
The movement and employment of individuals may become more difficult.
Some current (non-EU) world trade agreements may fall away. Trading with non-EU countries may change to involve additional tariffs and other obstacles.
The UK may be able to negotiate bespoke trade agreements with certain nations. UK government has already reached agreement on a number of such deals in principle and is working on others.
A future relationship and potentially a trade deal will be negotiated either before the end of the transition period, or in the period after the transition period.
What are the legal implications of Brexit?
EU law will be disapplied from the end of the transition period although existing EU laws will be imported into UK law such that no sudden change is expected. Substantial new UK regulation may be introduced to replace it (over a period to 2021 or beyond). Court judgments may be required to clarify the effect of such changes.
The UK government, UK parliament and the devolved administrations face the challenge of disentangling the UK regulatory framework from EU law, while balancing the need to maintain a robust legal and regulatory system.
The disapplication of EU law will be implemented by the Government ‘Withdrawal Act.’ This will come into force if there is 'no deal' after the transition period if no alternative deal is reached.
The process for restructuring UK law includes the following:
- Repeal of the European Communities Act (ECA). The ECA gives direct effect to all EU law in the UK and provides for the supremacy of EU law where it conflicts with UK law. Repealing this Act separates UK and EU law from a domestic perspective.
- Transform applicable EU law into UK law. It is likely that this will need to substitute any EU institutions playing a role in the administration of such EU law with competent UK institutions.
- End the jurisdiction of the European Court of Justice in the UK. Once the court is no longer available as a point of reference for EU law the UK courts will have to decide whether to give any note to decisions it has made in the past or future decisions when considering matters which derive (or derived) from EU law.
How can Burges Salmon help?
The legal and commercial implications of Brexit are potentially very far-reaching. We are issuing sector specific guidance which we will continue to review and develop as more detail becomes available on the approach being taken to future relationships and future trade negotiations by the EU and UK and the impact on the UK economy.
We’ve already prepared briefings in areas as diverse as employment law, intellectual property, food and farming and transport which should help inform the decisions you’re making for your business.
If you would like further information on how Brexit may affect you or your organisation then please get in touch.