On June 26, 2018, the United Kingdom adopted the European Union (Withdrawal) Act 2018 providing for a framework for “Brexit” under which E.U. law adopted in the U.K. would continue to apply during an implementation period and government minsters would have the power to adopt implementing rules. The United Kingdom is currently to leave the European Union on March 29, 2019. The resignations of the Foreign Secretary, Boris Johnson, and David Davis, the minister charged wit negotiating Britain’s exit, along with criticism lobbed by U.S. President Trump, however, have destabilized Prime Minster Theresa May and her government. The resigning minsters have claimed that the negotiations have resulted in ceding too much power to Brussels, and that this is not what U.K. voters supporting Brexit wanted.
Assuming Brexit continues as currently foreseen, Prime Minister May’s government has negotiated a 21 month implementation period through December 2020. Under the Act, (i) E.U. directives and regulations applicable in the U.K. will continue to be applicable; (ii) government ministers can make regulations to handle “failures” and “deficiencies” for two years after Brexit; and (ii) the House of Commons must approve any ultimate withdrawal agreement. If the implementation period is formally agreed as negotiated, the U.K. would continue largely to apply E.U. law – including newly adopted E.U. law – during the period. The all-important passporting regimes for E.U. and accession country firms passporting into the U.K. and for U.K. firms passporting into the E.U. and accession countries would largely remain in place during the implementation period.
The Financial Conduct Authority and other agencies, however, have published papers providing guidance, but given the range of possibilities it is not entirely clear what will happen. The agencies have said that firms should plan for the possibility that there is no implementation period.