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Commercial newsletter – Brexit update

31 January 2020

Thomas Miles


After numerous delays and extensions, the date that the UK will leave the European Union has finally been reached. At 11pm on 31 January 2020, the UK ceases to be an EU Member State.


So, what will change at 11:01?


Well, not a lot. For the next 11 months, until 31 December 2020, the UK will be in the agreed transition period, where the current relationship will continue. The UK will remain in the single market and the customs union. EU law will continue to apply to the country, travel and personal rights will remain, and the UK will continue to enjoy the benefits of EU membership.


The only practical change is that the UK’s MEPs will have left the European Parliament, and the country will cease to play a pro-active role in the EU and European law-making. A major legal difference is that the UK will have formally left the European Union, so there can be no further extensions to Article 50.


During the transition period the clock will then be running for the government and the EU’s negotiators to establish the two parties’ future relationship. In addition, the UK will now seek to set up new trade deals, not only with the EU, but also with other countries such as the US, China, Japan & Korea. Although any new trade arrangements cannot commence until 1st January 2021 at the earliest, the UK Government will be anxious to expedite negotiations.


Some points on the future relationship have been agreed in the Withdrawal Agreement that was agreed by Theresa May and then renegotiated by Boris Johnson (such as the right for EU citizens to have settled status, and the arrangements to avoid a hard land border in Ireland that mean that Northern Ireland will continue to follow EU rules on agriculture and manufactured goods).


However, with such a short period before the transition period finishes, it appears that there may be insufficient time available to completely resolve the ongoing relationship. We will see.


Trade talks will inevitably be pushed to the forefront, but there are also matters such as security and intelligence cooperation, fishing, data transfers, education and the Erasmus scheme, and collaboration on research matters.


The UK’s ‘divorce bill’ will have to be agreed, with estimates of what the UK will have to pay to cover its prior commitments varying dramatically.


As the UK will now have formally left the European Union, it is now vital that you ensure that you have considered the impacts that Brexit will have on your business.


Company directors are under a duty to ensure that they have taken steps to promote the success of their company. That means that your Brexit-related preparations should be extensive.


You should review how the changes to the legal and commercial landscape may affect your business, supply chains and customers, and ensure that you have made provisions to cover any disruption and maximise any opportunity.


Should you require any assistance with Brexit or any other commercial matter, please contact our 3CS Commercial Law team which can advise accordingly.

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Solicitor/Head of Legal​​

Thomas Miles