IMPACT – MEDIUM
The EU and U.K. have reached a provisional deal on the transition period that will follow March 29, 2019 when the U.K. formally withdraws from the EU. The transition period is meant to give businesses time to plan before new immigration and trade rules take effect.
Background: Negotiators have been wrangling over the terms of the transition for the past month, and the deal reached reflects that the EU won concessions from the U.K. on nearly all of the terms it sought.
EU negotiator Michel Barnier said the deal marked “a decisive step,” while U.K. negotiator David Davis said it would allow businesses the ability to “plan for the future with confidence.”
BAL Analysis: While the terms of the transition deal are clearer, particularly regarding citizens’ rights and the length of the transition period, the overall withdrawal deal is still uncertain until it is ratified, which is likely to be in 2019. Companies should plan for EU employees in the U.K. (and U.K. employees in the EU) to retain their free movement rights through 2020, but are encouraged to pursue residency documents when eligible. Further changes are likely to occur as both the U.K. and the EU negotiate the terms of Brexit.
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