What does 31 January really mean? How does the transition impact my business? Are there legal and regulatory changes from next week? Look at our FAQs to find out …
This FAQs document provides a brief overview of the impact of Brexit on your business on 31 January 2020 and beyond.
On 31 January 2020, the UK will formally leave the European Union, after over 40 years of membership. The UK’s relationship with the EU will no longer be governed by the EU Treaties, but instead by the terms of the Withdrawal Agreement agreed between the UK and the EU in late 2019. Following that agreement, the UK will be in a “transition” period, which commences the moment the UK leaves the EU and is currently set to end on 31 December 2020.
Under the terms of the transition, most EU law continues to apply to the UK and in the UK and continues to be interpreted and applied as if the UK were still an EU Member State. This means that during the transition period, from the perspective of business not much will change in terms of the UK’s relationship with the EU. For many, it will feel as if the UK has not left.
But the UK will have left the EU. At the end of the transition period, currently 31 December 2020, there are likely to be significant changes to the UK’s business environment.
During the transition period itself, the UK will no longer participate in EU governance and decision-making and will instead focus in 2020 on the negotiations relating to its future relationship with the EU, which the UK Government hopes to have in place by the end of the year. Many believe this to be an extremely demanding timetable, but the UK Government insists it will not request an extension to the transition period under any circumstances. The UK will also continue engaging with the negotiations with other countries, including replacing various EU free trade agreements by the end of the transition period.
It is vital that businesses monitor the negotiations closely and remain engaged with the process. The decisions that will be taken during the course of the negotiations will impact the shape of the UK economy for years to come. We, Hogan Lovells, are uniquely placed to help our clients over the coming months to prepare for the various potential outcomes.