On 23 August 2018, the UK government published the first 25 technical notices, to provide information to allow businesses to "make informed plans and preparations" in the event of a 'no deal' Brexit.
In the overarching notice that accompanies those technical notices, the UK government sought to provide reassurance that a 'no deal' outcome was not its objective, by stating that:
- it views a 'no deal' scenario as "unlikely";
- it believes that the mutual interests of the UK and the EU lie in securing a negotiated outcome to the UK's exit from the EU;
- as responsible government, it has a duty to prepare for al eventualities, including 'no deal', until it can be certain of the outcome of the negotiations with the EU;
- it was always the case that preparations for a 'no deal' scenario would have to be accelerated, but that does not, in the UK government's opinion, "reflect an increased likelihood of a no deal outcome".
The political position in the UK remains fragile and uncertain. The UK government is seeking to negotiate a withdrawal agreement and a trade deal on the basis of the so-called "Chequers Plan" (the position adopted by the UK government after the Cabinet meeting at Chequers on 6 July 2018). It remains to be seen whether the UK government can actually negotiate a deal on those terms with the EU, and even if it does, whether the UK government can pass the necessary legislation to implement that plan through Parliament.
With the UK party political conference season due to get underway, and Parliament then set to return from Summer recess, the political position may not become any clearer for some time yet, and potentially could become even more uncertain and complex.
Against that backdrop, it is vital that businesses plan for a 'no deal' Brexit, to identify risk in their business and to plan accordingly. At AG, we have a range of services that can support businesses in this task.
Set out below is AG's assessment of the first wave of technical notices published by the UK government. We will publish further updates as the UK government publishes additional technical notices in the forthcoming weeks.
A 'no deal' Brexit: what does that mean?
The UK served notice to trigger Article 50 of the Treaty of the European Union on 29 March 2017, and will exit the European Union at 11pm (GMT) on 29 March 2019. That Treaty provides that the UK has 2 years after that date to negotiate a withdrawal agreement with the EU, and a framework agreement for its ongoing relationship with the EU.
A 'no deal' Brexit means that the UK leaves the EU without a withdrawal agreement or a framework agreement for its future relationship with the EU. This would mean that he UK would become a "third country" for the purposes of EU rules, without any agreement to govern its future relationship with the EU.
Why focus on a 'no deal' Brexit – surely there will be a negotiated agreement?
At his time, there is no real clarity as to what a negotiated withdrawal agreement and framework agreement with the EU might look like. Both the UK government and the EU have set out their negotiating positions and aspirations, but the final outcome of the negotiations is far from clear (in fact, it is far from clear there will actually be any outcome from the negotiations).