IMPACT – MEDIUM

EU member states are expected to sign off on a set of tough Brexit negotiating points, including a requirement that the U.K. accept EU laws and budget if it seeks a transitional “implementation phase” following the U.K.’s break from the EU in the spring of 2019.

Key points:

  • EU officials, including European Council president Donald Tusk, have made it clear that any “implementation phase” sought by the U.K. would only be permitted if the U.K. continues to abide by EU laws, court rulings and fees. Such a phase should last no more than three years, EU officials say.
  • EU officials are also holding firm that “substantial progress” must be made on how the U.K. will leave the EU before negotiations on future relations or transitional arrangements begin.
  • The EU’s stance would seem to impose a deadline on U.K. Prime Minister Theresa May’s transitional implementation phase that would follow the U.K.’s departure from the EU. “Once we’ve got the deal, once we’ve agreed what the new relationship will be for the future, it will be necessary for there to be a period of time when businesses and government are adjusting systems and so forth, depending on the nature of the deal, a period of time during which that deal will be implemented,” May told reporters while on a trip to the Middle East.
  • The U.K. government has also published guidance making it clear that the status of EU nationals in the U.K. did not change when Article 50 was invoked. “You do not need to do anything as a result of Article 50 being triggered,” the government said. “There will be no change to the rights and status of EU nationals living in the UK while the UK remains in the EU.”
  • EU nationals who are planning on apply for documents to confirm their status in the U.K. can sign up for email alerts for developments on the post-Brexit status of EU nationals in the U.K. and steps EU nationals in the U.K. should take throughout the Brexit process. Against the backdrop of a harsh EU stance on a proposed implementation phase, the U.K. government seemed to offer reassurance to EU nationals residing and relocating to the U.K. that the law has not changed following the trigger of Article 50.

Background: The U.K. has indicated that it will pursue a “hard Brexit,” where it leaves Europe’s single market and retakes control of its migration processes for EU nationals. The U.K. invoked Article 50 March 29, officially signaling the country’s intent to leave the EU after the U.K. narrowly voted to leave the bloc in 2016.

BAL Analysis: While negotiations have not yet formally begun, the EU has indicated that it will take a hard line with the U.K. The U.K. may push for a transitional phase under which free movement would continue for a set amount of time after the U.K. officially leaves the EU, but it is unclear whether the government would be willing to accept the costs associated with such an arrangement that, for now, the EU has indicated that it would seek to impose. Businesses will hope for a transitional phase to adjust to big changes that look set to lie ahead for the U.K, and recent guidance from the Government regarding the rights of EU nationals could be seen as a move to reassure businesses and EU nationals that the law remains unchanged until formal Brexit.

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.

Copyright © 2017 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.