UK Publishes Official Policy on Leaving the European Union (Brexit)

Kelley Drye Client Advisory

Today, February 2, the UK government presented a policy text (a so-called White Paper - https://​www​.gov​.uk/​g​o​v​e​r​n​m​e​n​t​/​p​u​b​l​i​c​a​t​i​o​n​s​/​t​h​e​-​u​n​i​t​e​d​-​k​i​n​g​d​o​m​s​-​e​x​i​t​-​f​r​o​m​-​a​n​d​-​n​e​w​-​p​a​r​t​n​e​r​s​h​i​p​-​w​i​t​h​-​t​h​e​-​e​u​r​o​p​e​a​n​-​u​n​i​o​n​-​w​h​i​t​e​-​paper) laying out the 12 principles for its negotiations to leave the European Union. These principles are the same principles as announced by Prime Minister Theresa May last month. They include migration control, withdrawing from the EU single market and negotiating a new free trade agreement.

The White Paper comes one day after the parliament voted a bill allowing the government to trigger Article 50 of the Treaty on European Union to leave the EU and formally begin two years of exit negotiations. The Prime Minister has indicated earlier that formal notice would be given by the end of March, with the UK predicted to leave the European Union in 2019.

The 77-page policy document elaborates on the following 12 principles:

1. Providing certainty and clarity: We will provide certainty wherever we can as we approach the negotiations.”

2. Taking control of legislation: We will take control of our own statute book and bring an end to the jurisdiction of the Court of Justice of the European Union in the UK.”

3. Strengthening the UK internally: We will secure a deal that works for the entire UK – for Scotland, Wales, Northern Ireland and all parts of England. We remain fully committed to the Belfast Agreement and its successors.”

4. Protecting the ties with Ireland and maintaining the so called common travel area: We will work to deliver a practical solution that allows for the maintenance of the Common Travel Area, whilst protecting the integrity of our immigration system and which protects our strong ties with Ireland.”

5. Immigration: We will have control over the number of EU nationals coming to the UK.”

6. Securing rights for European nationals in the UK, and UK nationals in the European Union: We want to secure the status of EU citizens who are already living in the UK, and that of UK nationals in other European member states, as early as we can.”

7. Protecting workers’ rights: We will protect and enhance existing workers’ rights.”

8. Ensuring free trade with European markets: We will forge a new strategic partnership with the EU, including a wide reaching, bold and ambitious free trade agreement, and will seek a mutually beneficial new customs agreement with the EU.”

9. Securing new trade agreements with other countries: We will forge ambitious free trade relationships across the world.”

10. Ensuring the UK remains of interest for science and innovation: We will remain at the vanguard of science and innovation and will seek continued close collaboration with our European partners.”

11. Cooperating in the fight against crime and terrorism: We will continue to work with the EU to preserve European security, to fight terrorism, and to uphold justice across Europe.”

12. Delivering an orderly exit: We will seek a phased process of implementation, in which both the UK and the EU institutions and the remaining European Member States prepare for the new arrangements that will exist between us.”

The document summarizes negotiating objectives but a lot of important questions remain undecided.

Also, the White Paper obviously cannot guarantee that the aforementioned objectives will ultimately be obtained. There is no specific contingency plan in case the UK and the European Union do not reach an agreement. There is also no specific information on the UK government’s position regarding the current financial liabilities towards the European Union: the total outstanding bill is estimated by some to be as high as $ 74 billion.

Although it is too early at this point in time to take specific action other than voicing concerns with the policy makers, it is clear that US companies doing business in the UK or the European Union will be affected by these Brexit negotiations in the months and years to come. To name one thing; for the many US companies who use the UK as entry point into the EU market, a new strategy will need to be adopted.

Our lawyers in the Brussels office are available to update you on these developments, determine whether your business would be severally impacted or assist you on how adopt a prudent approach to these developments.