Withdrawal of UK by 31 January 2020
The UK and the EU reached an agreement on 17 October 2019 on the date of the Brexit and the conditions for the UK's departure from the EU. This includes a transition period until 31 December 2020 ('the withdrawal agreement'). The conditions for the entry into force of the withdrawal agreement have been fulfilled since it was ratified by the UK on 23 January 2020 and approved by the European Parliament on 29 January 2020. Accordingly, the UK will formally leave the EU on 31 January 2020 (midnight, CET).
During the transition period until 31 December 2020 not much will change for businesses. The UK will remain part of the EU Customs Union and the internal market and will continue to be subject to EU rules and the jurisdiction of the EU courts. The UK will also continue contributing to the EU budget. However, the UK will no longer participate in decision-making at EU level.
The purpose of the transition period is, on the one hand, to provide sufficient time for the UK and the EU to carry out the necessary negotiations and shape their future relationship. On the other hand, this period should enable companies doing business with the UK to prepare for the new situation after 31 December 2020.
The transition period may be extended once by two years, until 31 December 2022. However, this extension is subject to the approval of the UK Parliament and the European Parliament.
It is still difficult to predict what the future relationship between the EU and the UK will look like. The consequences for companies will only be certain once new agreements have been made. Making new agreements within this relatively short period is quite a challenge, especially given the complex relationship between the UK and the EU and the sheer number of issues that have to be negotiated. In addition, before the new agreements can enter into force on 31 December 2020, they will still have to be approved by the EU Member States, the UK Parliament and the European Parliament. This means that a no-deal Brexit at the end of the transition period cannot be ruled out.