On 18 July 2018, the German Department of State distributed to associations in Germany, a first ministerial draft of a German Federal Brexit Implementation Act, Brexit-Übergangsgesetz (BrexitÜG), for consultation by 8 August 2018.
On 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.
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.
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.
- Part 1 – Is the Brexit Transition Period Lawful?
- Part 2 – Does the Brexit Transition Period Apply in the Domestic Jurisdictions of the Other 27 Member States?
- Part 3 – Are There Gaps in the Union Law During the Brexit Transition Period (Banking and Other Areas)?
- Part 4 – Can the European Court of Justice Decide on the Lawfulness of the Brexit Transition Period and Other Aspects of the Withdrawal Agreement?
The 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.
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?
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.
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.
On 28 February the EU27 produced a draft Withdrawal Agreement about which many have already written. Notably the UK had not previously produced its own draft (lawyers generally like to produce first drafts of documents as it gives control of the negotiation to them). To those of us unfortunate enough to live and breathe Brexit on a daily basis, there was little surprising contained within, and it merely reflected in legal form the principles contained in the December Joint Report.
In response to the draft agreement the key point of contention in the UK was the issue of the Irish border. Some slightly inflammatory language from the EU27 didn’t help calm choppy waters and led to accusations from some that the EU was seeking to “annex” Northern Ireland. Essentially the EU27 asserted the default of a “common regulatory area” between Northern Ireland and Ireland (i.e. Northern Ireland staying inside the Customs Union and Single Market) unless the UK could come up with a plausible alternative: either a very soft Brexit or the deployment of cutting-edge technology to eliminate the need for a hard border. Continue Reading