7 November, 2019

BREXIT: towards a friendly outcome... on 31/12/2019?

SUPLY CHAIN

After months of debate, Boris Johnson failed to deliver on his promise of an effective exit from the European Union on 31 October despite the conclusion of a new agreement with the 27: the British Parliament forced him to negotiate an additional deadline with Brussels to study the text... So we'd go well to a « Soft Brexit »The question remains whether the British Prime Minister will have the hand to close the case by the end of the year!

The EU and the United Kingdom finally reached an agreement!

A new divorce treaty between the European Union and the United Kingdom was concluded on Thursday 17/10/2019. The key points of the agreement relate to two main areas:

No border between the two Ireland

Northern Ireland should form a regulatory area with the EU, and the province will be aligned with European standards set in the framework of the Community internal market.
On the other hand, it will be part of the British customs union.

In practice :
1. Immediate consumer products will not be subject to any tax.
2. Other products will be subject to the customs duties applicable to third countries of the European Union.
3. For VAT, this is the British scheme which should apply to Northern Ireland.
4. In addition, VAT exemptions Ireland should also apply in Northern Ireland.
United Kingdom undertakes to respect European regulatory framework

As regards competition, the environment and social welfare, the British committed themselves aligning their regulations with current European rules.
A condition sine qua no for Brussels under a future free trade agreement with the United Kingdom.

New postponement forced by the British Parliament

At the meeting of the communes on 19/10/2019, an amendment allowed Parliament to retain its green light to the agreement pending the adoption (31/10/2019) of the text of the bill that will incorporate Brexit into British law (EU Withdrawal Act).

The British Prime Minister, Boris Johnson, was forced to request a further postponement of Brexit from the European Council in accordance with the Anti-Law – « No deal » in the United Kingdom.

On Tuesday 22/10/2019, Johnson was rejected by Members on the proposed timetable but obtained agreement in principle on the text of the new agreement, with a thorough examination of the final version dedicated to many proposed amendments...

Boris Johnson immediately decided to pause the bill until the EU validates the postponement of the effective entry into force of the new separation agreement.

On 29/10/2019, the 27 Member States agreed on a further extension of deadline to 31 January 2020, with two windows offered to the British to shorten this deadline by a definitive ratification of the agreement :

As at 30 November 2019
As at 31 December 2019

But Boris Johnson, didn't say his last word...

By calling for early parliamentary elections on 12 December 2019, the Prime Minister hopes to regain a majority and implement Brexit without delay... The deadline of 31/12/2019 could therefore be the right one, provided that the British Parliament turns its side to the elections !

To go further...

BREXIT & Supply Chain

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