On Wednesday 29 March, the UK formally notified the 27 other member states of the EU of its intention to leave the European Union (EU) by triggering Article 50 of the Lisbon Treaty.
Today’s notification comes as no surprise. We now have the certainty that was lacking in all the rhetoric and discussion which took place before and after the referendum on 23 June 2016: the UK will be leaving the EU.
Now begins a minimum two-year process of negotiation, during which the exact terms of our departure will be agreed. Unless the UK and the other member states agree to extend the negotiation period, the UK will exit the EU on 29 March 2019. The negotiated deal will require the approval of the UK and at least 20 member states (representing 65% of the EU population) as well as ratification by the European Parliament.
At the point of exit, the EU Treaties and other legislation will cease to apply to the UK. However the Government has stated that the Great Repeal Bill will confirm that EU legislation will continue to apply in the UK until each area of legislation has been reviewed on an individual basis. This at least provides some short-term certainty for UK businesses.
However, the trade terms applicable between the EU and the UK are likely to apply immediately upon our exit. The detail will depend on the negotiated deal, but it could include import and export duties. Where no trade deal is reached, World Trade Organisation rules will apply. What we do know, however, is that the way the UK trades with other countries is going to change.
Whatever your views of the result of the referendum, Brexit is now a reality – and business leaders need to be ready and respond to the opportunities and threats:
- Assess the risks and opportunities that Brexit brings, develop a plan to mitigate/take advantage and monitor developments. Consider how your supply chain might be affected and plan how to mitigate the risks.
- Gain an understanding of how your customers will be affected by Brexit and what that might mean for your business. Are there any opportunities and how might you mitigate the risks? If you currently export to the EU, what other markets might you target?
- Consider the impact on your employees and your ability to retain and recruit the individuals you need. It’s still unclear how EU/EEA/Swiss migrants will be affected, and they may need guidance. And what about your business’ recruitment plans? If you are likely to recruit EU nationals in the future, you will need to familiarise yourself with immigration sponsor and application processes and connect with organisations that can help you.
- Analyse what aspects of your business are regulated directly by European regulations or indirectly by UK legislation which gives effect to EU Directives. Keep informed of potential changes in these areas.
- Get your contracts Brexit ready. Ensure any contract you enter into from now on has considered the changes that the UK’s departure from the EU will bring and, ideally, caters for any changes to price, method or timing of delivery that Brexit may impact. For help in getting your business Brexit ready, visit Thrings' Brexit MOT.
For further information about anything contained in this article, or to discuss the possible implications of Brexit in more detail, please contact Kate Westbrook or visit the 'Business of Brexit' section on our website.
