The result of the EU referendum was announced on Friday, 24 June 2016 with a vote in favour of the UK leaving the EU. In this briefing we outline what happens next and the exit process. We also identify some of the issues that businesses should be considering now and the steps that they should be taking. The “Leave” vote has led to political uncertainty which will have a significant impact on the exit process. We will keep you updated on developments via our Brexit hub.

Although it will be some time before the terms of the UK’s future relationship with the EU are known, there are things that businesses can consider and plan for now, and changes they can start to make, to help protect their interests. Planning will help put businesses in the best possible position in the uncertain months to come. The shape that Brexit will take is not certain and there is scope for businesses to be involved, on their own or together with their trade bodies, to influence the outcomes of the EU/UK negotiations in relation to their sector.

What is the exit process?

Article 50 of the Treaty on European Union (“TEU”) sets out the mechanism for leaving the EU. Notice of the UK’s intention to leave must be given to the European Council (which includes the Heads of State / Governments of the EU Member States). This must be done in an unequivocal manner, and can either be a letter to the President of the European Council or an official statement at a meeting of the European Council duly noted in the official records of the meeting. Once notice is given, negotiations between the UK and the rest of the EU to agree a withdrawal agreement will commence. The agreement will also take into account the framework for their future relationship together.

In terms of timing, the UK will stop being an EU Member State on the earlier of a withdrawal agreement being concluded or two years from the date of notice. This two year period can be extended by the unanimous consent of the UK and all of the other EU Member States. Most commentators believe that it will be extremely difficult to negotiate the withdrawal agreement, never mind a trade deal, with the EU in the two year timeframe.

The withdrawal agreement will need to be agreed by the EU Parliament and the European Council as well as the UK Parliament.

During the negotiation period, the UK will remain a full EU Member State and will continue to take part in all EU decision-making except in relation to the withdrawal agreement.