BREXIT : what will happen after 31 January 2020?
On Wednesday January 29th, 2020, the European Parliament approves UK agreement.
Reminder of the Brexit agreement consequences
Following the approval by the British Parliament of agreement 2019/C 384 I/01 published in the OJEU of 12 November 2019 conditions for the exit of the United Kingdom from the European Union (EU) on 31 January 2020 are about to be met.
The completion of ratification procedures is pending and in the very words of Michel Barnier, chief negotiator for the Brexit, “it is now clear that the UK will leave the EU at the end of this month”. The agreement will be implemented, subject to the formalisation of the last ratifying acts before 31 January.
From 1 February 2020, the United Kingdom will no longer be a member of the EU.
Save for some exceptions, the United Kingdom will no longer participate in the EU institutions.
However, the agreement provides that this date will mark the beginning of a transitional period, during which the whole of EU law will continue to apply (with the exception of certain institutional provisions) to the United Kingdom (art. 126 and 127), which will be treated in principle as a member State for the application of the provision of EU law (art. 7 paragraph 1 and 127 paragraph 7).
This implies that EU law will have the same legal effects on the United Kingdom and its territory as within the EU and its Member States.
Likewise, this means, for example, that for the application of a directive which governs operations in a different way according to whether they are carried out with a partner established in a Member State of the EU or with a partner established outside of the EU, a British partner will be treated as being established in a Member State of the EU until the expiry of the transitional period.
The United Kingdom will in principle be required to apply EU law during this period, even if it is amended or replaced and will bear, as all Member States, all consequences of any breach of EU law. This specifically concerns the four EU freedoms (free movement of goods, capital, services and persons).
The transitional period expires in principle on 31 December 2020. However, the agreement provides that it may be extended by a maximum period of one to two years (art. 132).
This period shall be used to organise the relations of the United Kingdom with the EU and/or the Member States from the day following the expiry of the transitional period.
The agreement however already establishes rules in certain areas of law which will apply until up to five years after the end of the transitional period (citizenship, customs, VAT, intellectual property, judicial and administrative cooperation…).
We will shortly present the key elements in each discipline of these specific provisions of the agreement in order to allow you to anticipate the decisions to be made in view of the end of the application of EU law in the United Kingdom.
Finally, the agreement includes three protocols including specific provisions regarding relations with Ireland, Cyprus and Gibraltar.
With the Brexit deadline looming, are you aware of all the consequences related to the United Kingdom withdrawing from the European Union?
It is now more likely than ever that the UK will leave the EU without an agreement in place to govern the new relationship. We would like to remind you of the most relevant legal, financial, tax and employment consequences of a so called “hard Brexit”.
Thanks to a multidisciplinary, tailored offer, our teams can support your adjustment to a hard Brexit and help you manage the challenges you face vis-à-vis the United Kingdom, against a changing and unstable backdrop.
Hard Brexit: our support offer
Ensure your business strategy
Adapt your tax strategy
Support you in your HR policy
Rethink you legal issues