United Kingdom Legislating to Avoid a Legal Gap after Brexit but Warns UK Persons to Confirm the Details

With or without a deal and unless there is a last minute extension, the United Kingdom will leave the European Union (EU) at 11 pm London time on 29 March 2019. Since triggering the exit process, the UK has worked towards having a deal in place that would ensure a smooth departure, including a transition period that would largely preserve the status quo until the end of 2020 or even beyond. At the same time, however, both the UK and the EU have engaged in contingency planning in the event a deal could not be agreed or failed to be ratified. For the UK, this has included efforts to revise legislation to remove references to the EU and its agencies to ensure that UK law could function on Day One after leaving the EU. This process has involved the review of hundreds of legislative acts to create new statutory instruments, many of which have yet to be passed into law. The legislative backlog means that necessary legislation may not be in place before 29 March 2019. To avoid a legal gap, the UK adopted the EU (Withdrawal) Act 2018 and provided therein a catch all provision to ensure that EU law that is not addressed elsewhere is retained.

Should the UK leave the EU without a deal, the UK will impose, update and lift sanctions as of 30 March pursuant to regulations issued under the Sanctions and Anti-Money Laundering Act 2018 (the Sanctions Act). Sanctions regimes that are not covered would continue to apply, as retained EU law under the EU (Withdrawal) Act. Sanctions laws apply to actions taken by UK persons, which includes companies and individuals, in the UK or anywhere else.

The intent of the slate of new legislation generally is to ensure legal authority and mechanisms to carry on, rather than to diverge from existing EU law. On the 1st of February, however, the UK Government issued no deal Brexit guidance warning UK persons that they should not assume UK sanctions legislation will be identical to that of the EU. Instead, it will be incumbent upon companies and individuals to review the new legislative instrument and regulations to ensure that actions remain in compliance with UK law. In particular, the UK Government urges those conducting activities under exemptions provided in EU law to ensure that such exemptions are recognized by the UK.

At present, regulations adopted under the Sanctions Act address Burma, human rights in Iran, and Venezuela. These regulations will come into force only when the UK leaves the EU.