Brexit: what changes during the transition?

On 31 January 2020, the UK is set to leave the EU and enter the transition period provided for in the Withdrawal Agreement. Are there any immediate changes that businesses need to be aware of?

The general position

For most businesses, there will be little immediate change, because during the transition period the UK will, for most purposes, continue to be treated as if it were still a member state of the EU. However, businesses should take note of the following:

REFERENCES TO "EU", "EEA" ETC IN AGREEMENTS

Care should be taken when defining territory by reference to the "EU" or "EEA"; if the intention is to include the UK in the relevant territory, the agreement will need to say so (because although the UK will still be subject to EU law during the transition, legally, it will no longer be part of the EU or EEA). For a more detailed discussion of the issues, including the implications for agreements which predate 31 January 2020, see this briefing. For a checklist to assist with "Brexit-proofing" your contracts generally, see this briefing.

EU-negotiated agreements with third countries

During the transition, the UK has agreed to honour the terms of EU-negotiated agreements with third countries, such as trade agreements – but third countries may not reciprocate. For example, the UK has failed to agree "roll over" trade agreements with a number of significant jurisdictions, including Canada and Japan. However, it is important to note that this will not affect imports – it only affects exports from the UK to those countries, which may become subject to less favourable terms (e.g. the imposition of higher tariffs and/or other barriers to trade). For more detail, see this briefing.

Lastly, click here to read our explainer on the European Union (Withdrawal Agreement) Act 2020, which was passed last week.

Read Jonathan Rush Profile