The United Kingdom (UK) Parliament, the European Council and the European Parliament adopted the Withdrawal Agreement, effective as of 1 February 2020. This puts in place a transition period during which the UK will continue to have rights and obligations as part of the European Union (EU) internal market until 31 December 2020.
The transition period can be extended once before 1 July 2020 for either one or two years, i.e. through December 2021 or December 2022 respectively. The decision to extend must be taken jointly by the EU and the UK.
The transition period was negotiated to maintain status quo for a period of time sufficient to allow the EU and UK to decide on their future relationship and to put in place agreements that would take effect immediately upon conclusion of the transition period.
The prospect of an imminent disorderly "no deal" end to UK membership of the EU has now gone, the threat of a "no trade deal" future relationship at the end of the year remains.
What changes during the transition period?
During the transition period, the EU generally will treat the UK as if it were a Member State, with the exception that the UK may not participate in EU institutions or governance structures. EU law remains applicable in the UK. In effect, this means that the UK must apply all EU rules, including any changes made during the transition period, but no longer has a voice in setting the rules.
The UK remains in the EU Customs Union and in the Single Market with all four freedoms, i.e. free movement of people, goods, services and capital, and all EU policies.
At the same time, as the UK has left the EU, it now has the ability to negotiate with other trading partners and pursue free trade and other arrangements. It also will consider legislative changes it may wish to make following the end of the transition period. This means that the UK will be preparing, in some instances, to diverge from EU law.
Key Brexit Milestones:
1 July 2020: Date by which UK may request a single extension of the transition period.
31 December 2020: End of the transition period, unless extended. EU regulations will no longer apply to the UK. If the future relationship agreement between the UK and EU is not successfully concluded, trade between the UK and EU would be on WTO terms and Withdrawal Package terms relative to Northern Ireland would become applicable.
31 December 2022: Longest possible transition period, unless re-negotiated by the UK and EU.
Covance CLS will continue to adapt its plans as necessary in light of new developments during the EU/UK trade negotiations during the transition period.
For specific information related to your development project, please contact us at CovanceBrexit @ Covance.com.