Brexit Business Brief | An extension of the Article 50 period?

Published on 4th Feb 2019

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Doing it all over again on St. Valentine's Day

Following the House of Commons' rejection of the negotiated Withdrawal Agreement, the UK government is now attempting to build some sort of domestic consensus around what 'alternative arrangements' can be put to the EU27 to modify, qualify or replace the Irish backstop. For its part, the European Council and Commission have restated their view that the Withdrawal Agreement is a done deal.

Despite that obstacle, the Prime Minister has said she will seek to bring a reworked deal back to the House of Commons by 13 February. If that proves impossible, the government has undertaken to table an amendable motion for debate on 14 February. So that date will be the next opportunity for MPs to express their views on what should happen next. In the government's words, "the House will have a further opportunity to revisit this question of leaving without a deal".

That could include another attempt to pass the Cooper amendment, which would enable the Commons to direct the government to request an extension of the Article 50 period.


The mechanics of extending the Article 50 period

The next scheduled meeting of the European Council, the heads of state body that would need to approve an extension of the Article 50 period, is on 21 March. Such extension requires the unanimous consent of the EU27 in agreement with the UK.

If the Cooper amendment in its original form was to be passed by the Commons on 14 February, it would give the government until 26 February to have the Withdrawal Agreement agreed to by the Commons. If that failed, the Commons would then direct the government to request an extension of the Article 50 period. One would hope that the EU27 would indicate informal agreement to that request quickly, with the 21 March Council meeting being used to rubber-stamp the decision.

All this is future-gazing. The point is that we may not know until the end of February or even mid-March whether the Article 50 period is to be extended. As things stand today, unless something happens, the UK leaves the EU on 29 March 2019 without a deal.


Why extend the Article 50 period?

If the Withdrawal Agreement is finally approved by the Commons, the UK government then has to get a substantial piece of primary legislation – the European Union (Withdrawal Agreement) Bill – onto the statute book before the UK leaves.

That legislation is needed to implement parts of the Withdrawal Agreement into domestic law. We haven’t seen a draft of the Bill yet, and the government has said it will only be published once the Withdrawal Agreement is approved by the Commons.

The Bill and supporting legislation may need several weeks to pass through Parliament. The Bill itself is likely to be controversial, as it has effectively to continue the supremacy of EU law in the UK during the transition period. A request to extend the Article 50 period to just before 2 July 2019, the date of the first session of the new European Parliament, would be likely to be approved by the EU27 – given that the deal would be done by then, so the extension would be for what might be described as the technical reason of enabling the implementing UK legislation to be passed.

No deal
A more debateable question is whether the EU27 would agree to extend the Article 50 period because the UK needs more time to prepare for a 'no deal' Brexit.

At the moment, the UK is some way from being ready for a no deal exit. Leaving aside more interesting questions around borders, food and medical supplies, there are still several pieces of primary legislation (the Immigration, Trade, Fisheries and Agriculture Bills, for example) and hundreds of secondary legislative instruments that are not in place but which are needed for 'no deal'.

An Article 50 extension to prepare for 'no deal' seems contradictory in some ways, but reflects the fact that 'no deal' is a major change and not 'business as usual'. The EU27 may feel they have no choice other than to agree, with perhaps a long-stop date of the end of June 2019.


'No deal' legal and regulatory news

EU citizens arriving in the UK after 29 March 2019 in a 'no deal' situation:  On 28 January 2019 the UK government published details of the immigration regime which would apply to EEA and Swiss citizens arriving in the UK after Brexit in a 'no deal' situation. The announcement is here, guidance is here and the policy paper is here. This European Temporary Leave to Remain regime is entirely different from the settled and pre-settled status scheme which will apply if the Withdrawal Agreement is ratified..

Data protection: New 'no deal' guidance from the UK government. Refers to the ICO's 6 steps checklist. Also, guidance from the ICO for SMEs here.

US Privacy Shield and no dealGuidance from the US Department of Commerce. "Privacy Shield participants must update their Privacy Shield commitments by the Applicable Date", which will either be 29 March 2019 (if no deal), or the end of the transition period.

E-commerce directive and no dealWhat the UK government will do.

Financial Conduct Authority 'no deal' MoUs with ESMA and EU regulators: 'The MoUs cover cooperation and exchange of information in the event the UK leaves the EU without a withdrawal agreement and implementation period, …[including] a multilateral MoU with EU and EEA National Competent Authorities covering supervisory cooperation, enforcement and information exchange.'

Temporary permissions regime: The notification window for the financial services temporary permissionsregime opened on 7 January 2019 and closes on 28 March 2019. This is the regime which 'will allow EEA-based firms currently passporting into the UK to continue new and existing regulated business within the scope of their current permissions in the UK for a limited period, while they seek full FCA authorisation, if the UK leaves the EU on exit day without an implementation period in place'.

Financial services 'no deal' noticesLatest editions from the UK government.

Retail and 'no deal'Collected guidance from the UK government.

IP and BrexitUK government guidance.

Public procurement: UK government guidance in the event of 'no deal' (and under the Withdrawal Agreement).

Construction and 'no deal'UK government guidance.

Disputes: Updated 'no deal' guidance from the European Commission on civil justice and private international law here.

Customs, VAT and Excise regulations and 'no deal'Collection of UK government materials.

New UK product safety marking: There would be a new safety marking for certain products in the event of 'no deal'.

Health and care sector: Collected 'no deal' notices from the UK government.

Regulation of medicines and medical devices in 'no deal': Collected information from the MHRA.

Chemicals regulations and 'no deal': CIA and Cefic joint paper.

PensionsStatement from the Regulator, aimed principally at defined benefit scheme trustees.

UK nationals and 'no deal'Omnibus note from the UK government covering many areas of living in the EU after Brexit.

UK nationals travelling to the EU in 'no deal': Collected UK government notices.

UK drivers in the EU and EEA in 'no deal': The requirement for International Driving Permits is getting complicated; updated UK guidance.

Ireland: Chunky 'no deal' legislation would also be needed in Ireland. Here is a summary by the Irish government, and here is an outline of the Bill.


Also caught my eye

Brexit and geopoliticsChris Grey, University of London.

Brexit and the future of EuropeSigmar Gabriel, former German Minister of Foreign Affairs.

The British had more influence in Brussels than they knewVarious, the LSE.

Brexit and public opinion 2019'New report reveals Brexit identities stronger than party identities', from The UK in a Changing Europe.

'Brexit': He claims he invented the word.


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