Home / Insight / Brexit

Brexit

Back to Brexit

(Last updated: 30 October 2019) 

On 23 June 2016 the United Kingdom voted in a referendum to leave the European Union ("Brexit").

Article 50 of the Treaty on European Union contains special provisions for the withdrawal of a Member State. These require a Member State which decides to leave to inform the European Council of its intention. The Treaties will cease to apply as of the date on which a withdrawal agreement takes effect or two years after withdrawal notification unless the European Council unanimously resolves to extend the deadline by mutual agreement with the Member State concerned.

On 29 March 2017 Theresa May submitted the withdrawal notification. On 14 November 2018 the United Kingdom and the EU agreed a draft withdrawal agreement under which the UK would leave the EU at the end of the two-year period, i.e. on 30 March 2019.

The draft withdrawal agreement was rejected by the British parliament several times at the beginning on 2019. On 13 March 2019 it also rejected withdrawal without an agreement with the EU.

At the special meeting of the European Council on 10 April 2019 the remaining 27 Member States granted an extension of the deadline until 31 October 2019. If the agreement is still ratified, the UK could continue to gain access to the single market and be part of the customs union during a subsequent transition period until 2020. Failing that, however, an unregulated Brexit may still occur on 31 October 2019.

On 7 June 2019, Theresa May resigned as leader of the Conservative Party. Former British Foreign Minister Boris Johnson was elected by party members to succeed her as party leader, and on 24 July 2019 the Queen appointed him as the new Prime Minister. He announced that he intends to lead the United Kingdom out of the European Union by 31 October 2019. He therefore wants to renegotiate the withdrawal agreement with the EU, but does not rule out an EU withdrawal without an agreement. 

On 28 August 2019, Boris Johnson applied to Queen Elizabeth II for a parliamentary suspension until 14 October 2019. Queen Elizabeth II had given her approval to this.

On 24 September 2019 the British Supreme Court declared that this parliamentary suspension was illegal and thus ineffective. The presiding judge made it clear that the break between sessions had never entered into force. One day after the ruling was announced, the parliament met again.

Even before the start of this parliamentary suspension, the House of Commons and the House of Lords voted against the will of Boris Johnson to approve the law against a No-Deal-Brexit, which came into force on 9 September 2019 after it had been signed by Queen Elizabeth II. The law requires the British Prime Minister to apply to the EU for an extension of the deadline of 31 October 2019 if no withdrawal agreement is ratified by 19 October 2019. The new elections proposed by Boris Johnson, on the other hand, did not receive the necessary majority in parliament twice.

On 17 October 2019 the British government and the EU Commission agreed on a revised draft withdrawal agreement. The European Council approved the draft on the same day but the British and European Parliament still have to approve it. On 19 October 2019, the House of Commons postponed a decision on the withdrawal agreement. A vote on the revised draft will not be taken until the legislation implementing the agreement in UK has been passed.  In the meantime, Boris Johnson has applied for an extension to the Brexit deadline beyond 31 October 2019 which Parliament had required him to do by law. On 28 October 2019, the remaining 27 Member States agreed to extend the deadline until 31 January 2020. Earlier withdrawal on 1 December 2019 or 1 January 2020 is possible if the UK ratifies the withdrawal agreement earlier.

On 29 October 2019, the British Parliament voted for early general election on 12 December 2019.

In the meantime, not only has the EU taken emergency measures and proposed time-restricted transitional arrangements for the most important areas, but the Member States are also preparing for a no deal scenario. For example, German legislators have arranged to make it possible for UK Limited companies to switch to a German legal structure under simpler conditions in the Act Amending the German Transformation Act, amongst others. In the German Act on Transitional Arrangements in the Fields of Labour, Education, Health, Social Affairs and Nationality after the United Kingdom of Great Britain and Northern Ireland leaves the European Union there are plans in place to maintain the status quo in pension and medical insurance through voluntary continued insurance. According to an announcement made by the Ministry of the Interior, a further transition period of three months will be arranged in the event of an unregulated Brexit during which British nationals and their dependants, who, until such time as an unregulated Brexit occurs, have been entitled to free movement, may continue to live and work in Germany without a residence permit. The German Act on Brexit Tax Support is intended to soften the tax consequences of Brexit. This would also give the German Federal Financial Supervisory Authority (BaFin) the option of allowing companies from the UK, which have been operating in Germany under the right of establishment or the freedom to provide services, to continue using a European passport/licence for a transitional period in the event of an unregulated Brexit.

However, if Britain leaves without an agreement, only individual areas will be covered by the (transitional) arrangements made. Many points remain unregulated. We offer you comprehensive advice on Brexit in all legal areas concerned. Please come to us with your questions so that we can work out the best solutions for you.

08/03/2019
Brexit-Up­date
07/03/2019
Brexit Up­date – Deal or no deal?
Fol­low-up zum We­bin­ar

Timeline: Brexit and other Events relevant to the European Union in this context

Brexit Timeline

Below we provide an overview of the possible legal consequences of Brexit, arranged according to the different areas of law. If you require any further information, please feel free to contact John Hammond at any time.

Explore more

Feed

Show only
21 Aug 19
CMS - Fo­cus­ing on Funds – Lux­em­bourg Brexit
14 Aug 19
The ins and outs of Brexit – em­ploy­ment and tax as­pects
01/11/2016
Brexit vote dampens deal­mak­ing ex­pect­a­tions, ac­cord­ing...
27/10/2016
Private Equity Pan­el 2016 III von CMS und FIN­ANCE:...