On 29 March 2017, the United Kingdom (UK) notified its intention to withdraw from the European Union (EU) invoking the procedure in Article 50 of the Treaty on the European Union (TEU). On 11 April 2019, following a request by the UK, the European Council agreed to extend further the period provided for in Article 50(3) TEU until 31 October 2019. Unless the UK ratifies the agreement on the withdrawal of the UK from the EU and the European Atomic Energy Community (Withdrawal Agreement) by 31 October 2019 or requests a third extension to which the European Council agrees by unanimity, the UK will be a third country as of 1 November 2019 without an agreement to ensure an orderly withdrawal.
In order to adequately prepare for Brexit, it is primordial for EU businesses and the EU financial services industry to finalise their preparations for the UK’s withdrawal. As a reminder:
- in the absence of a Withdrawal Agreement, there will be no transition period and EU law will cease to apply to and in the UK as of 31 October 2019, and
- if the Withdrawal Agreement is ratified by the UK before 31 October 2019, most of the legal effects of Brexit will apply in accordance with the respective transition periods, the terms of which are set in the draft Withdrawal agreement.
Even if the Withdrawal Agreement was ratified, business action would be required to prepare for after the transition period, i.e. after 31 December 2020, when the EU rules for the internal market and the EU Customs Union would cease to apply to the UK. Preparedness would thus be required in any case, albeit at a later stage.
Update on recent Brexit developments