Brexit Timetable – Where will the European Court of Justice Opinion on the Draft Withdrawal Agreement fit into the equation?

Brexit Clock

The clock is ticking! With only seven months left until the leaves the EU on 29 March 2019.  With the European Council Summit on 18 October 2018 eagerly anticipated by all parties there is some expectation, that until that date it will not be resolved whether the UK and EU are able to agree on a Withdrawal Agreement, which would form the basis of the Transition Period from 30 March 2019 to 31 December 2020.

An open issue remains on whether or not any agreed final draft Withdrawal Agreement, will be submitted to the European Court of Justice (ECJ) for the usual legal opinion the ECJ renders under Article 218 (11) Treaty of European Union (TEU) in respect of international agreements the EU enters into.

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Preparing for the Withdrawal of the UK from the EU

Brexit Tearing of FlagsOn 19 July 2018 the EU Commission published a paper on “Preparing for the withdrawal of the UK from the EU on 30 March 2019”.

The paper deals both with a “Deal Scenario” where the EU27 and the UK enter into a binding Withdrawal Agreement prior to 29 March 2019 and also with a “No Deal Scenario” setting out the consequences of no Withdrawal Agreement being entered into.

The Preparedness Paper in particular lists and summarizes the 68 sector and industry specific Notices to Stakeholders which the EU Commission has issued during recent months.

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Never a dull moment in Brexitlandia…

On Friday, the British Cabinet met in Chequers, the Prime Minister’s country retreat, to agree among itself, a position to propose to the EU27 on its intended future relationship with the EU after Brexit. A mere two years after the referendum. Key points involved agreeing to maintain a “common rulebook” for all goods and agricultural products and the establishment of a “combined customs territory”, under which the UK would apply its own, possibly lower, tariffs and policies for goods for the domestic market, and EU tariffs and policies for goods entering the EU. These, the Cabinet considered, would go some way to enabling the UK to maintain a frictionless, or close to frictionless, border in Ireland and mainland Europe, while giving it an independent trade policy, particularly in relation to services. On jurisdiction, the UK would pay “due regard” to EU case law in respect of the common rulebook, but would not technically be bound by its decisions, nor would the ECJ resolve disputes between the UK and the EU. Free movement would end and be replaced with a “mobility framework”.

A Government White Paper is expected to be published on Thursday, with considerably more detail than the three-pager that was published at the start of the weekend. In its current form, the proposal may not fly in Brussels. It looks like the fabled “cherry picking” of the UK requesting the benefits of EU membership without fully signing up to the Four Freedoms, and the fear in Brussels is that it would give the UK a competitive advantage that other members states do not have. But it is at least the first document emerging from the UK government that explicitly accepts trade-offs will need to be made.

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Brexit Transition Period Insight

Please see below our latest insight into the legal position of the proposed Brexit transition period.

Firstly we have examined the legality of the transition period; if the transition period applies in the domestic jurisdictions of the other 27 Member States; taken a closer look at identifying any gaps in EU law during the transition period and finally, if the European Court of Justice can decide on the lawfulness of the transition period and other aspects of the withdrawal agreement.

Statement of Intent for EU Citizens

Brexit FAQThe Home Office recently published details of its EU Settlement Scheme with information on how EU citizens in the UK can apply for settled or pre-settled status when the scheme is phased in towards the end of 2018. Our Brexit FAQs provide practical guidance on the key points of the scheme and can be forwarded directly to any of your EU/EEA employees with questions or concerns about what Brexit means for them.

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How difficult will it be to hire EU workers after the Brexit transition period?

Navigating Brexit: The Migration Minefield

This week we’ve partnered with EEF on a new report ‘Navigating Brexit: the Migration Minefield’. The report highlights the need for clarity, simplicity and urgency in the Government’s messaging to stem the flow of EU citizens from the UK, taking their much needed skills with them.  A copy of the full report can be accessed online.

The next big question is –  what hurdles will manufacturers face when seeking to hire new EU arrivals after the Brexit transition period?

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VAT to the Future

Some surprises have been unearthed in a report from Parliament’s European Scrutiny Committee on the future of VAT in the UK after Brexit. Published in accountingweb.co.uk this week, Jeremy Cape examines the report and demystifies what it means.

The European Scrutiny Committee, chaired by long-time eurosceptic Sir William Cash, published its report on VAT: EU proposals for reform and the implications of Brexit on 3 April 2018. While this report attempts to look in isolation at the EU’s proposals for the “true” single EU VAT area, Brexit intrudes at every turn.

The committee identified that in relation to VAT, Brexit presents a trade-off and urges the government to set out how it intends to balance competing pressures with respect to trade, the Irish border and how the UK will sit post-brexit in the EU VAT system.

The committee states that: “any decision by the UK to diverge from the harmonised standards that underpin the common VAT system could have unforeseen consequences, potentially rendering the whole cross-border system that allows for border controls to be waived technically unworkable”.

Jeremy examines the report in more detail here.

Navigating the Road Ahead: Cost of Sourcing Retail Products

The UK’s retail sector is one amongst many that will be significantly affected by the country’s withdrawal from the EU following a transition period.  Yesterday we are launched the first edition of the Quarterly UK Retail Brexit Trade Review. The Review contains economic, policy and legal analysis on the impact of changed trading terms and narrative on the progress of UK and EU trade negotiations specific to the retail industry.  The research in this first Review outlines three possible trading models for the UK’s long-term, future relationship with the EU; each model has different implications for the cost of sourcing imports, both from the EU and beyond. Analysis is provided across eight key sectors within the retail industry, including an outline of a range of opportunities the UK government should pursue in the event of a “no deal” scenario.  Research suggests that £7.8 billion could be added to the cost of retail goods if the UK fails to agree a deal with the EU.

The Quarterly UK Retail Brexit Trade Review was produced in partnership with Retail Economics and includes contributions from Matthew Lewis, Robert MacLean, Annabel Mace and Jeremy Cape.

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