This post aims to provide an insight into the legal implications of the UK formally leaving the EU at an undecided time in the future.
The decision made on 23rd June 2016 as a result of the EU referendum, is for now, just a representation of the public opinion. Article 50 of the Lisbon Treaty 2009 (which starts the process of the UK leaving the EU) has not yet been invoked.
What is Article 50?
This Article sets out the process by which countries can formally depart from the EU. In order to invoke it, the UK government must inform the EU in writing or in an official statement at a meeting of the European Council.
Once Article 50 is invoked, there will be a period of at least 2 years where there will be no change whilst the UK negotiate the terms of the exit and any future trade relationships. Being part of the EU, The UK legislation has incorporated a vast amount of EU laws covering a wide range of practice areas and Industries and this legislation will stand in the UK until the UK ceases being an EU member.
An example illustrating the current climate can be seen through retail sales figures for July 2016 which were up on the same period last year, defying predictions of a post-Brexit slump. Furthermore, UK industrial output grew at the fastest rate for 17 years in the April-to-June 2016 quarter, up 2.1% compared with the first quarter of the year. The Office for National Statistics said very few respondents had been affected by the uncertainty from the referendum vote.
In the upcoming months, businesses and practitioners are likely to be engaging with the Government to put forward their views on an appropriate future model for the UK’s relationship with the EU.
The Fourth Money Laundering Directive must come into force by 24th June 2017. This was largely supported by the UK and is likely to be transferred into UK law during the transitional period and continue to be applied post Brexit.
What’s going to happen now following the Brexit vote?
At this stage it is not clear when, where or how negotiations will be conducted between the UK and the EU, or how long it will take to conclude new trade arrangements with both EU and non-EU countries.
Once the UK depart from the EU, they may consider joining the EEA as this would continue to recognise multiple areas of EU legislation. This includes the freedom of movement of people, capital, goods and services.
The UK’s eventual departure from the EU will undoubtedly impact different practice areas and industries. There will therefore be a period of inevitable adjustment whilst the legal system absorbs the effect of the Brexit vote.
Business as usual…for the moment anyway
At the present time, the UK will continue to abide by EU treaties and therefore since the decision to leave the EU was made, there have been no significant changes which would adversely impact our Company’s business dealings from a commercial viewpoint. We remain fully committed to providing corporate professional services to our clients and shall continue to build longstanding business relationships.
Should you wish to discuss further please contact Animo.