The decision by British citizens to choose to withdraw from the European Union, i.e. Brexit, will have profound political, economic and legal implications for relations with the EU. In the referendum on 23 June 2016, the British people voted in favour of leaving the European Union. Over time, the British government and the European Union came to an agreement regarding the withdrawal which would govern future relations. However, this withdrawal agreement should also have been adopted at national level by the British Parliament. However, the British Parliament voted three times against the withdrawal agreement negotiated by the government. However, in a legally non-binding vote, the majority of the MPs also voted in favour of not wanting to leave the European Union by way of a "no deal" exit. After several unsuccessful extensions of the deadline and after Parliament refused to approve the withdrawal agreement for the third time on 29 March 2019, British Prime Minister Theresa May requested a further extension of the deadline at the EU Special Summit on 10 April 2019. At the Summit, the EU27 leaders agreed with the United Kingdom to grant a flexible deadline extension until 31 October 2019, at the latest. The flexible deadline makes it possible for the UK to leave the European Union before the deadline with or without an agreement.
However, the European Union has attached a number of conditions to this postponement. For example, it refuses to amend the withdrawal agreement, which is binding under international law. It is also unwilling to negotiate future relations with the UK during the extension period. In addition, the EU expects the UK to respect the principle of "loyal cooperation" enshrined in the EU agreement. This is intended to prevent the UK from blocking strategic decisions on future issues - such as the next EU budget, which covers the years 2021 to 2027. In addition, the UK must fulfil all the obligations of an EU member.
On 24 May 2019 Theresa May announced her resignation for 7 June 2019. Decision on the successor must be found by the conservative party. The further course of the Brexit negotiations thus depends to a large extent on the plans of the Prime Minister's successor. Future developments are therefore uncertain. Until further notice, it is unclear whether an agreement can be reached in the House of Commons, and also between the UK and the European Union by the end of the deadline. If no agreement can be reached, a “no deal” Brexit will automatically take place. The latest deadline extension has in no way eliminated the risk of a “no deal”. On the contrary, the European Union's position that the withdrawal agreement should no longer be renegotiated stands in the way of an internal UK agreement as a necessary condition for an orderly withdrawal - a demand made by many British MPs.
A “no deal” Brexit will have a profound impact on trade between the European Union and the UK. A “no deal” means that the UK will not only leave the European internal market and the European customs union, but also the freedom of movement and freedom of establishment will be abolished without substitution. The UK would become a third country.
Preparing your company for a "no deal" exit would have the positive effect that it would also be prepared for other possible exit scenarios. It is currently not possible to predict which path will be taken by the Prime Minister's successor in the future Brexit negotiations. Britain's withdrawal from the European Union in the form of a "no deal" Brexit is now more serious than ever in the light of current developments. Therefore, our experts at Luther have already early on in the process comprehensively dealt with the consequences of a "no deal" Brexit and have compiled their basic findings in this Brexit brochure. You can find detailed assessments of the individual fields of law in the menu bar on the right . In addition, our teams of experts will be happy to advise you individually on the consequences of a "no deal" Brexit for your company.