Legal consequences of a “hard Brexit”

19.11.2020 international law

It will soon be 10 months since the United Kingdom withdrew from the European Union. Although Brexit has formally already occurred, the real-life consequences are barely noticeable. But the transition period in force since the beginning of February 2020 is inexorably coming to an end, and it appears less and less likely that before it expires at the end of 2020 the parties will manage to reach an agreement governing the future relations between the UK and the EU.

This obviously generates numerous risks, first and foremost involving more or less sudden changes for businesses (British ones operating in the EU and Continental ones operating in the UK), citizens of one of the parties living or working in the other, the flow of goods and services, and so on.

Brexit acts

The Polish parliament attempted to prepare itself in the event of the UK’s withdrawal from the EU without an agreement in place.

To this end, the following acts, in particular, were adopted in Poland:

Act of 15 March 2019 on Rules for Functioning of Certain Financial Market Entities in Connection with Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union without Conclusion of an Agreement Referred to in Art. 50(2) of the Treaty on European Union
Act of 15 March 2019 on Regulation of Certain Matters Connected with Recognition of Professional Qualifications in Connection with Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community without Conclusion of an Agreement Referred to in Art. 50(2) of the Treaty on European Union
Act of 15 March 2019 on Regulation of Certain Matters in Connection with Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community without Conclusion of an Agreement Referred to in Art. 50(2) of the Treaty on European Union.

The last of these acts contains provisions enabling British business operators whose stay in Poland has been recognised as legal to continue conducting business on the basis of a current entry in Poland’s Central Registration and Information on Business (CEIDG). This was also intended to ensure the possibility of completing the delivery of services in Poland by British businesses for a certain period.

All of these acts stated that they would enter into force “on the date of withdrawal of the United Kingdom from the European Union without conclusion of an agreement referred to in the second sentence of Art. 50(2) of the Treaty on European Union.”

Withdrawal agreement

But in the meantime, Brexit technically occurred following conclusion of an agreement on withdrawal of the UK from the EU and Euroatom (L.2020.29.7), and thus the Polish acts cited above never entered into force.

The withdrawal agreement addresses in detail the rules for residence by nationals of the EU and the UK in host countries, including the rights of workers and self-employed persons, the rules for recognition of professional qualifications, and a range of other issues. But the agreement is not exhaustive, and by the time it was concluded (and crucially, down to the present day) the parties had not succeeded in working out comprehensive solutions for their future relations.

In this issue of In Principle we decided to address selected legal issues involving relations between the UK and the EU after 31 December 2020, in the event that an agreement on the parties’ future dealings is not reached by that date.

We thus examine:

While remaining hopeful that an agreement can be achieved on time, we invite you to read more about these issues.

Maciej A. Szewczyk, attorney-at-law, M&A and Corporate practice, Common Law Desk, Wardyński & Partners