Deciphering the Great Repeal Bill
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The UK Government's announcements on Brexit appear to have given some indications of the direction of travel. But do they really provide clarity or simply pose a new set of questions?
This paper summarises key developments, considers how the Great Repeal Bill might work in practice and highlights emerging issues for business.
The Government's objectives
On 2 October 2016, the Government announced further details on its plan for Brexit, including a "Great Repeal Bill" to repeal the European Communities Act 1972 (ECA) and "convert existing EU law into domestic law, while allowing Parliament to amend, repeal or improve any law after appropriate scrutiny and debate".
The meaning of Brexit is increasingly coming into focus.
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What we now know
The UK Government intends to serve the formal notice initiating the withdrawal process by the end of March 2017.
What we don't know
The Government has reiterated that it intends to secure some form of control on the freedom of movement of EU nationals as part of the UK's new relationship with the EU.
If the Government begins the process as planned, the two year negotiation period provided for in the EU Treaties suggests that Brexit is most likely to occur in spring 2019, subject to any agreement to the contrary.
The UK Government also plans to prepare for the effect of Brexit on domestic law by transposing existing EU law into domestic law as far as practical immediately before Brexit.
However, beyond freedom of movement, the UK Government has, to date, given very little indication of its plans for future UK policy.
The central outstanding issue, in terms of its effect on the future relationship between EU and UK law, is whether the UK will seek to remain a member of the Single Market post-Brexit.
The key aims of this approach appear to be:
to enable the UK to achieve a clean break from the direct application of EU law on Brexit Day, including ending the jurisdiction of the Court of Justice of the EU (CJEU);
to preserve as much of the existing EU rules in domestic law as possible, so as to provide "maximum possible certainty" for individuals and businesses; and
to allow decisions about the extent to which domestic law should, in the future, be aligned with EU law to be made subsequently.
In short, the objective appears to be to combine continuity and flexibility whilst being able to declare that the UK has "taken back control" of its law.
In sections 1 and 2 of this paper, we analyse how this objective might be achieved in practice, some potential complications and what the implications are for business.
When announcing the Great Repeal Bill, UK Government said... "Britain must be back in control... [and]... EU law must cease to apply on Brexit day".
Certain of the Government's stated policy objectives, in particular securing limits on freedom of movement, are incompatible with membership of the Single Market as it currently operates for full EU members and/or for other non-EU countries, such as Norway. Remaining a member of the Single Market will almost certainly require remaining subject to the rules of the Single Market, including in relation to freedom of movement.
Therefore, quite apart from the objective of the Great Repeal Bill to transpose existing EU law into UK law on Brexit Day (sections 1 and 2 of this note), a separate question for the Government to answer in the negotiations is the future applicability in the UK of EU law that has not been transposed into UK law, such as future EU legislation and past and future decisions by EU institutions, including the CJEU.
This is ultimately a political question, but it will have significant implications for the degree of influence that EU law has over UK law in the future. Is the UK willing to tie its law to EU law in order to have privileged access to the Single Market and, if so, to what extent?
In section 3 of this paper, we analyse some of the relevant considerations.
What should business do next?
"To ensure continuity... EU law will be transposed into domestic law, wherever practical, on exit day".
To what extent will the Great Repeal Bill achieve the Government's objective of continuity for UK business post-Brexit?
"The Repeal Bill will end [Court of Justice of the EU] jurisdiction in the UK".
In section 4 of this paper, we consider what we know, what issues remain outstanding and what businesses can do about it.
Section 1: Identifying which EU laws to transpose
What does EU law comprise and can we transpose it all?
EU law that currently applies in the UK falls into a number of categories.
The commitment to transpose appears to apply fairly clearly to two of these categories:
EU Regulations, which have direct legal effect in the UK by virtue of the ECA (until repealed); and
EU Directives, which do not currently apply directly in UK law but are implemented in the UK by domestic primary or secondary legislation.
However, EU law does not simply comprise EU legislation. It also includes a number of other sources of law, some of which are easier to identify than others.
Certain provisions in the EU Treaties have been deemed to have direct effect in the UK (eg Article 101 prohibiting anti-competitive agreements). To the extent not already reflected in UK domestic legislation, the Government will need to decide whether and how best to transpose these provisions.
Decisions of the Council or Commission can have direct effect in a Member State if addressed to that Member State. The Government will need to assess whether any historic decisions should be transposed.
General principles of EU law have direct effect in UK law. Some (eg supremacy of EU law) will no longer be relevant post-Brexit, although for others (eg proportionality) the position is less clear.
In addition to these, judgments of the CJEU are currently effective in the UK in two main ways:
CJEU decisions create binding precedents for the UK courts in relation to interpretation of EU law; and
the UK's courts are obliged to apply domestic law in accordance with EU law principles (this is known as the "indirect effect" of EU law).
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Given the scope of EU law, it is unlikely that the Government will want to, or indeed even be able to, transpose it all into UK law via the Great Repeal Bill. For example, the Government has already indicated that it does not want to continue free movement of people, which currently applies in the UK by virtue of, among other things, directly effective provisions in the EU Treaties (Articles 20 and 45 TFEU).
Brexit will render certain EU laws about access to the EU institutions (ie the rules of the club) defunct. For example, the UK will no longer need to hold elections to the European Parliament or participate in the Council of the European Union. Citizens may also lose access to the CJEU or other EU institutions such as the European Medicines Agency or the EU Intellectual Property Office.
Therefore, the process of transposing EU law into UK law in time for Brexit will not be a purely mechanical process of adopting all EU law. The UK will necessarily need to decide which EU law is incompatible with Brexit.
Can EU law that is transposed be transposed unchanged?
Provisions of EU law may also need to be altered during the transposition process in order to ensure that it continues to operate in a coherent way at a domestic level.
This is more likely to be the case where existing provisions of EU law: (a) operate at a supranational level; or (b) assume the involvement of institutions outside the UK.
In both instances, it is not in the gift of the UK unilaterally to maintain the same regime after transposition into UK law; some changes to the regime will be needed to ensure that the replacement regime operates in an equivalent way, albeit exclusively at a UK level.
Some examples of current EU law, and existing UK legislation implementing EU law, that may need to be changed in order to operate effectively following Brexit are set out in the table below.
EU law currently assumes
UK Consumer Protection Act -
continued membership of the EU liability of importer into the EU
EU law currently relates to an EU-level regulatory regime
Marketing authorisations of pharmaceutical products
EU law currently coordinates/ relies on mutual agreement between Member States' institutions
UK Extradition Act enacting the European Arrest Warrant
EU law intended to avoid
Rules prohibiting unjustified
distortions in the Single Market (ie state aid
concerns cross-border effects)
As will be evident from the examples above, many essential changes will themselves give rise to policy questions.
These questions will primarily be about the UK's approach to a specific issue. For example, what will be the nature, powers and duties of any new regulator established by the UK to replace an EU regulator?
The Great Repeal Bill can only replicate EU law at a domestic level; it cannot provide for EU law to continue to apply in the UK, nor can it require the EU or other EU Member State institutions to apply the new EU-derived UK law, once transposed. This could only be achieved by agreement between the EU and the UK. For example, marketing authorisations for pharmaceutical products provided under a new EU-derived UK law by a new UK body would not be recognised under EU law, unless agreed otherwise. If the UK wishes to maintain its cooperation with the EU in certain policy areas, this will need to be agreed as part of the UK's new relationship with the EU. This issue is considered further in sections 3 and 4 of this note.
Section 2: The process of transposition
The objective of the Great Repeal Bill is to enable the UK legislatures to take back control of decisions about the law applicable in the UK.
The announcement of the Great Repeal Bill suggests that the Government intends for the process to take place in two stages:
1. On Brexit day, EU law will be transposed into UK law, to the extent possible and with minimal changes; and
2. After the initial transposition, policy decisions about the continuation of EU-derived laws can be taken over the course of future Parliaments.
This approach would be understandable as a substantive discussion of each policy decision implicit in EU-derived legislation before transposition would be likely to delay Brexit for an indefinite period.
Any change to the existing framework will necessarily be a political decision; businesses should therefore consider whether they should make representations on such essential changes pre-Brexit.
How will EU law be transposed?
A purely mechanical transposition of law from one legal system to another can often be achieved with minimal alteration to the text of the transposed laws. However, transposition of EU law (which operates at a supranational level) into UK law, is not likely to be this simple.
The approach is likely to vary depending on the source of EU law:
However, as explained above, it would be wrong to assume that EU law can be transposed into UK law in a purely mechanical and apolitical way. Some essential changes will need to be made to existing EU laws in certain circumstances, so as to ensure that the EUderived domestic law operates as intended from a technical perspective.
Directives are already transposed into UK law, so the Great Repeal Bill will need to ensure that the UK implementing legislation remains in force.1
Regulations are not currently transposed into UK law. The repeal of the ECA will end their implementation by reference, so they will need active transposition. This could be achieved in a number of ways, each with varying degrees of legislative scrutiny, legal certainty and speed, for example the Government could:
enact bespoke UK legislation to achieve the same outcome as the existing Regulation;
reproduce each Regulation verbatim in domestic law, leaving it to the courts to interpret them in their new domestic context (perhaps with some statutory guidance on interpretation);
list all Regulations in a schedule and provide that "the EU Regulations listed in Schedule [x] hereby have force as if enacted by secondary legislation"; or
state that "all EU Regulations directly applicable to the UK on [Brexit date] hereby have force as if it enacted by secondary legislation".
1 Repeal of the ECA will mean that a new domestic legal basis will be required for secondary legislation that was enacted under s. 2(2) of the ECA to implement Directives.
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In the case of decisions by EU institutions and specific directly effective Treaty provisions, "transposition" (if any) is likely to mean identifying the specific outcome that needs to be achieved by an equivalent provision in the UK. These are therefore are likely to need to be specifically addressed rather than simply "applied by reference".
Given the short timeframes involved, it is unlikely that the Government will opt for a "belt-and-braces" approach to transposition. It is likely a majority of transposed EU law will be adopted via secondary legislation enacted under a parenting provision in the Great Repeal Bill (similar to s. 2(2) ECA). This would avoid the delay of seeking to introduce primary legislation, which must be agreed by both Houses of Parliament.
How will changes be made to EU law upon transposition?
Where EU law has not previously been transposed, such as EU Regulations, these can be adopted in their amended form, either by primary legislation or via secondary legislation enacted under the parent provision in the Great Repeal Bill described above.
However, where EU law is already partially or completely incorporated into UK law, the Government's intention appears to be that the Great Repeal Bill will grant Government so called "Henry VIII" powers to amend any domestic primary and secondary legislation to the extent necessary to take account of Brexit by secondary legislation.
The scope of this power is potentially controversial.
The UK Government is likely to argue that it is necessary at least to give effect to essential changes as those become clear in the course of negotiations.
However, EU law affects a very wide range of policy areas. Given the nature of the substantive policy issues likely to emerge even from essential changes (as described above), there are likely to be concerns that the UK Government could implement very significant policy decisions through secondary legislation.
It will be of further concern if this power continues in force after Brexit Day. It is unclear whether the Government intends to use this "Henry VIII" power to make policy changes to existing EU-derived law even after the process of transposition is complete (ie stage two, described above). This could have the effect of enabling Government to continue to use secondary legislation to alter very substantial areas of primary legislation on an indefinite basis.
It is therefore likely that these powers will cease to have effect at some point shortly after Brexit Day. There is also potential for secondary legislation, for example, amending current primary legislation, to be challenged in the administrative courts by parties who are unhappy with the proposed result.
The Government statements to date do not give any further indication as to the scope of such a power. It also provides no indication of whether such powers could be exercised only before Brexit Day or also after Brexit has occurred.
Transitional arrangements? In many cases, the UK policy position in a particular area of EU law will depend on the UK's future relationship with the EU, once agreed.
Assuming that the future relationship will not have been finalised before Brexit Day, it is possible that transitional arrangements will be needed at a domestic level until agreement at an international level has been finalised.
For example the nature of changes with respect to issues such as the recall of unsafe products or arrest of criminals will depend whether the UK and EU agree cross-border arrangements to replace those which currently apply. What is to be the position in the interim, prior to agreement as to what those cross-border arrangements should be?
Should such transitional arrangements seek to:
a) completely uncouple the EU and UK regimes on Brexit Day, with the view of possible reintegration later, if agreed (ie a clean break between EU law and UK law on Brexit Day); or
b) maintain current levels of integration of EU and UK regimes, with the view of possible uncoupling later, if agreed (ie EU law continues to apply post-Brexit in certain areas until transposed)?
Transitional arrangements could provide for transposition to be conducted in a multi-stage process, so as to take account of the negotiations with the EU as they proceed. Transposition of particular EU laws into UK law could be phased-in over time as agreement is reached in a particular policy area between the UK and the EU. This would allow for greater flexibility and greater certainty for those affected by the rules in question. However, this would make a clean break from the EU on Brexit Day more difficult.
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Some have also suggested that the Great Repeal Bill should provide that EU-derived law transposed on Brexit Day automatically lapses within a certain timeframe unless amended or reaffirmed (known as a "sunset clause"), so as to ensure that the process of reviewing such laws does not go on indefinitely.
The Role of the UK Parliament in the process
There has been much debate over the role of Parliament in scrutinising the UK Government's approach to Brexit.
Whilst the full extent of Parliament's role is not yet entirely clear, the UK Government's statement regarding the Great Reform Bill does establish that Parliament will be responsible for determining the legislative mechanism for the transposition of EU law into the UK via the enactment of the Great Repeal Bill.
Matters Parliament will need to consider when debating and enacting the Great Repeal Bill include:
the process of transposition (including a possible parenting provision to allow for the adoption of EU laws via secondary legislation);
the scope of the Government's "Henry VIII" powers to amend existing domestic legislation, including the degree of parliamentary oversight of such powers;
the terms on which EU law is adopted into UK law (eg sunset clause);
any general rules of interpretation of EU-derived UK law.
To the extent that any new primary or secondary legislation is introduced to transpose EU law into UK law, Parliament would have a role in scrutinising such legislation in the usual way.
Role of the Devolved Administrations
The Government's statement does not make any explicit reference to the role of the UK's Devolved Administrations.
Under the current devolution settlement, the Devolved Administrations are responsible for ensuring the UK complies with its EU obligations in relation to devolved matters. Brexit will remove the obligation on the Devolved Administrations (contained in the Devolution Acts) to abide by EU law. This has a number of implications for the process envisaged by the Great Repeal Bill.
Brexit arguably impacts upon the scope of the powers of the Devolved Administrations. As such, it is highly likely that the Great Repeal Bill will require a Legislative Consent Motion from the Devolved Legislatures. However, it is unlikely that the withholding of such consent would have the legal effect of blocking the passage of the Bill.
In addition, it will also be necessary to amend relevant parts of the Devolution Acts, which will also require Legislative Consent Motions from the relevant Devolved Legislature.
Assuming that the scope of devolved matters remains the same, where an area of policy has been devolved, the decision to retain, repeal or amend EU law will be the responsibility of the Devolved Administrations, unless the Great Repeal Bill provides otherwise. The removal of the requirement to abide by EU law would therefore have the effect of extending the legislative and policy powers of the Devolved Administrations. This could give rise to the possibility of increased divergence between the constituent nations of the UK, as the Devolved Administrations and the UK Government adopt different approaches to policy areas previously governed by EU law.
Section 3: Defining the effect of EU law in the future
EU law will cease to apply directly in the UK on Brexit Day (unless agreed otherwise), but it is unlikely that it would cease to have any impact on UK law and regulation.
The UK could agree to continue to be bound by (some aspects of) EU law, even though it is no longer a member of the EU. This would be likely to prohibit any material divergence between UK law and EU law. However, the implications of the UK Government's stated positions to date regarding free movement of people and the jurisdiction of the CJEU, for example, suggest that the UK will not wish to be bound by EU law post-Brexit.
Even if that is the case, many of the UK's laws will still be derived from EU law (at least in the short term) and the UK will most likely still wish to coordinate with the EU in some areas of policy after Brexit. The UK may even seek to allow EU institutions jurisdiction in respect of certain limited areas of shared competence.
As such, the degree of future integration between the UK and EU legal systems will depend on the political agreement reached on the UK's future relationship with the EU. However, even where the UK decides to uncouple itself from the EU in respect of a particular policy area after Brexit, the UK's law will still be heavily influenced by EU law, at least initially.
The legacy of the UK's EU membership: impact of pre-Brexit EU law
Immediately after Brexit, many of the UK's law will be derived from EU law. The Great Repeal Bill will contain provision for the UK to review and amend EU-derived laws where it wishes to diverge from the EU, but what about EU-derived law that the UK decides to keep unchanged? To what extent will its derivation affect its interpretation and application post-Brexit?
This issue manifests itself in a number of ways:
What will be the status in UK law of pre-Brexit CJEU judgments concerning the lawful interpretation of a provision of EU law that has since been transposed into UK law?
Where two provisions of transposed EU-derived laws, or an EU-derived law and a non-EU derived law, conflict, will the conflict be resolved according to the established hierarchy of EU laws?
Will the UK courts be able to consult non-legislative sources, such as EU-level guidance, to interpret the EU-derived provisions?
To what extent has UK law itself been reshaped as a result of the application of the principles of EU law (eg proportionality) by the UK courts?
To the extent the Great Repeal Bill (or other UK legislation) does not address these issues, which are unprecedented in the UK's history, the matter will fall to the UK courts to determine. If the legislature does not provide guidance to help the courts resolve these difficult issues, there is potential for increase in "judicial activism" and the use of creative interpretative legal principles to resolve them, which could lead to conflict between the judiciary and Government.
A possible solution would be for the Great Repeal Bill to:
oblige the UK courts to remain faithful to the preBrexit interpretation of EU-derived laws, as far as is possible, immediately after Brexit; but
provide for possible divergence between EU and UK positions over time by allowing the Supreme Court to decide to depart from the pre-Brexit position, where appropriate.
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The table below considers the possible impact of pre-Brexit CJEU judgments as an example. Figure 1: Potential treatment of pre-Brexit judicial precedents (assuming UK is no longer obliged to comply with EU law)
Decisions based on EU law before Brexit Judgments of the CJEU
Judgments of the UK courts within the scope of EU law
Parties will already have relied on precedents in respect of correct interpretation of EU law.
R emoving precedents could change effect of transposed legislation (even if words of individual provisions remain the same in transposed law).
UK courts to continue to be bound by preexisting judgments of CJEU in respect of interpretations of EU-derived law.
UK Supreme Court entitled to override CJEU precedents regarding interpretation of EUderived law in future judgments.
Parties will already have relied on national UK court precedents within the scope of EU law.
Such judgments have incorporated EU law into UK law by: applying CJEU judgments in UK context; interpreting provisions of EU law directly; and/or defining the interaction between EU law and domestic law.
U K courts continue to be bound to apply preexisting judgments of CJEU in respect of EU-derived law, where applicable.
Where no relevant CJEU judgment, UK courts free to interpret EU-derived laws in accordance with domestic principles of interpretation.
Repeal duty on UK courts to interpret UK law in accordance with EU law.
The impact of post-Brexit EU law on UK law: a question of politics
The impact (if any) that EU law will have on the UK post-Brexit will be determined by the future trade relationship between the UK and the EU. A major factor in this decision is the degree of access to the Single Market that the UK negotiates to have post-Brexit, and the political price of such access.
The question for the Government is: to what extent is it willing to agree to the UK ceding control in exchange for some form of privileged access to the Single Market (see summary table below).
The global baseline: WTO The terms on which States allow access into their national economies by businesses from other States are generally set by the World Trade Organisation (WTO). WTO rules are therefore considered to provide a baseline for trade terms between States.
Some States have agreed bilateral (or multilateral) Free Trade Agreements (FTAs), which allow preferential access to each other's national economies on better terms than the WTO baseline.
The European Single Market The Single Market is a club in which Member States agree to be bound by the rules of the club in exchange for privileged access to the national economies of other Member States, as if the Member States have a "single" national economy. It does this in two direct ways:
by prohibiting the imposition of tariffs, customs duties or quotas on trade between the national economies of its Member States and setting EU-wide tariffs, duties and quotas for trade with the rest fof the World (the customs union); and
by providing for the elimination of non-tariff barriers and harmonising regulatory and technical standards for goods and services between member states.
The single market is supported by a common framework of fundamental law, which prohibits (subject to exemptions) the imposition of restrictions on the movement of goods, services, capital and workers across borders within the Single Market and enshrines principles of equal treatment, transparency and proportionality. This legal framework is enforced ultimately by the CJEU within the EU.
Businesses established in States that are not members of the Single Market can also "access" the Single Market, but only on WTO terms or in accordance with the terms of any FTA their domicile State has agreed with the EU.
As a Member State of the EU, the UK economy forms part of the Single Market. This will not continue postBrexit, unless agreed otherwise. The EU is unlikely to allow privileged access to the Single Market without the UK giving up some degree of autonomy overs its own laws and regulations.
Remaining a member of the Single Market
If the UK wishes to maintain its membership of the Single Market, it is very likely that it would need to, at a minimum, change its policy in relation to limiting free movement of people and/or the applicability of EU law.
The European Economic Area (EEA) currently represents the clearest precedent for countries to remain within the Single Market while being outside the EU.
Under the EEA arrangements:
EU law does not apply directly in an EEA Member State, but each EEA Member State is obliged to adopt laws equivalent to those of the EU into their domestic law;
Privileged access for non-members of the Single Market
An alternative, less integrated option would be for the UK and EU to agree to mutually recognise (certain of) their respective regulatory frameworks as "equivalent".
This arrangement could afford the UK privileged access to (some parts of) the Single Market in return for the UK ensuring that its law remains "equivalent", but not identical, to that of the EU. This would afford a degree of latitude for divergence between UK law and EU law. There are precedents for such arrangements in specific regulated areas (notably in respect of some financial services), but those arrangements are piecemeal.
The EU would be likely to insist on some assurances that the UK will take steps to ensure equivalence is maintained, and would almost certainly retain the right unilaterally to withdraw its recognition of the UK regime as equivalent if the UK failed to do so.
No privileged access to the Single Market
If the UK does not agree a negotiated deal with the EU for privileged access to the Single Market, this would allow the greatest degree of flexibility in relation to UK policy and would minimise the future impact of EU law over UK law. However, the UK's trade relationship with the EU would revert to the WTO baseline.
The CJEU does not have jurisdiction in an EEA Member State, but its rulings have persuasive authority in relation to the rules of the Single Market; and
Compliance with the rules of the Single Market by EEA Member States is monitored by the EFTA Court, which can issue binding infringement decisions against the State in question.
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Figure 2: Potential models for Single Market access
Access to single market
EEA Equivalence WTO rules
Full access Privileged, but not full, access No privileged access
Requirement for UK to comply with Enforcement by EU against
Obliged to implement EU law EU law overrides UK law Subject to jurisdiction of CJEU
Infringement proceedings by Commission
Francovich damages for breach of EU law
Obliged to adopt domestic law that is equivalent to EU law
Binding EFTA court infringement rulings
Damages for non-compliance
Must maintain equivalence, as determined by the EU
EU can remove recognition of equivalent if UK does not maintain it
No Must comply with WTO terms
WTO can impose fines for non-compliance
Section 4: What does the Great Repeal Bill mean for business?
The Government's stated intention behind the Great Repeal Bill is to preserve as much of the existing EU rules in domestic law as possible in order to provide "maximum possible certainty" for individuals and businesses.
To what extent can the Great Repeal Bill achieve this objective in practice? To what extent does the Great Repeal Bill give certainty to businesses about the regulatory environments in which they operate?
1. Incomplete continuity
At a purely UK level, it will not be possible to transpose all EU law into UK law and, of the EU law that is transposed, some will need to be amended upon transposition in order to operate coherently. In addition, even where direct transposition is legally possible, political considerations may come into play as Parliament legislates to give effect to transposition.
Certain EU rules require that businesses seeking to be authorised under a relevant regime be established within the EU. Two high profile examples are market authorisations for pharmaceutical products and licences to undertake certain regulated financial services activities within the EU.
Many businesses with operations in the UK which serve customers across the EU currently benefit from the fact that their UK authorisation is recognised EU wide. Absent an appropriate UK/EU agreement they will lose this benefit on Brexit.
As a result, certain EU-derived rules affecting businesses operating in, or trading with, the UK will change as a result of Brexit. This process of change will not be mechanical and apolitical: businesses should engage Government now about how "transposition" should be achieved.
2.Mutuality not assured
Certain EU rules create rights (eg licences or authorisations) that are granted at a national level by national authorities and that are recognised throughout the EU.
After Brexit, the UK may have transposed such rules so that equivalent rights continue to be granted by the relevant national authority in the same or similar way as before. However, UK transposition cannot of itself guarantee that rights granted under the new UK rules will continue to be recognised in other EU Member States. That could only be achieved if agreed between the EU and the UK.
In the absence of such an agreement, a business wishing to operate in the UK and in other EU member states will need to obtain such rights (eg licences to operate; certificates of conformity) from the authorities in an EU Member States and, separately, from the UK.
The Great Repeal Bill may transpose the relevant EU rules into UK law meaning that a similar UK authorisation can be granted. However, this will not alter the fact that, post-Brexit, UK operations will no longer be authorised by and/or established in an EU Member State. They will therefore fall outside of the scope of the EU regime, even if they continue to be authorised in the UK.
As a result, in the absence of an agreement to the contrary between the UK and the EU, businesses that wish to continue to operate within the UK and the EU under such regimes will need to establish themselves and obtain the requisite authorisations in both the UK and an EU Member State in order to do so.
Equally, if no agreement is reached, it is possible that the UK will decide not to recognise EU authorisations. If so, this would mean that businesses that currently base their operations in another EU Member State and wish to undertake regulated business in the UK would need to establish UK operations.
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4.Treaty rights lost
After Brexit, businesses operating out of the UK will lose EU law rights attributed to EU persons (such as the right to free movement, freedom to provide services or freedom of establishment). This means that EU Member States would be entitled to introduce restrictions, for example, on businesses currently operating out of the UK also establishing operations in the EU. Perhaps more likely in the short run would be additional regulatory hurdles placed on the operation in the EU of a UK based business or on products or services sold by a UK based business to EU customers.
A similar principle may well prevail in reverse such that, for example, EU law rights obtained by virtue of a business' status as an EU person (eg EU trade marks) will cease to be enforceable in the UK unless UK law states otherwise.
5. Tariffs not avoided
In the absence of a free trade agreement between the UK and the EU, the UK and/or EU may decide to impose tariffs, duties, customs requirements and/or quotas, in accordance with WTO rules, and may impose other non-tariff requirements that limit access to the respective markets.
As is clear from the above, the Great Repeal Bill alone cannot resolve the considerable uncertainty for businesses caused by Brexit. Much of the uncertainty will remain until the UK either negotiates a trade deal with the EU or decides to go it alone without one.
The Great Repeal Bill will not ensure complete continuity for UK businesses post-Brexit, even those that are operating solely within the UK. Brexit will bring considerable regulatory change in a wide range of areas of the UK economy in the near future. Business should consider now whether and how they will be affected.
This means that the Government is still open to businesses making their voices heard. Now is the time to inform and assist the Government formulate its negotiating priorities and to make it aware of your business' priorities.
The Government's stated objectives in respect of free movement of people, ending the jurisdiction of the CJEU and the transposition of EU law into UK law via the Great Repeal Bill are inconsistent with the current rules of membership of the Single Market (whether within the EU or the EEA). However, the policy underlying the Great Repeal Bill provides no further clues as to the future trade relationship that could be negotiated between the UK and the EU (if any).
Charles Brasted Partner, London T +44 20 7296 5025 firstname.lastname@example.org
Susan Bright Regional Managing Partner, London T +44 20 7296 2263 email@example.com
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Peter Watts Partner, London T +44 20 7296 2769 email@example.com
Falk Schning Partner, Brussels T +32 2 505 0906 firstname.lastname@example.org
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