Brexit: the transition period

What is the transition period?

The UK left the EU on 31 January 2020 at 11.00 pm (UK time) (exit day) but with a transition period (also known as the implementation period) that will end on 31 December 2020, as the UK has chosen not to extend the transition period beyond that date.

The transition period is effectively a standstill period intended to maintain the legal status quo while the UK and the EU negotiate an agreement on the future relationship.

The Withdrawal Agreement, which is an international treaty, governs the relationship between the UK and the EU during this period. The European Union (Withdrawal Agreement) Act 2020 is the UK legislation that gives effect in domestic law to the Withdrawal Agreement.

The Withdrawal Agreement includes provisions on: citizens’ rights, separation issues to allow for a winding down of current arrangements, transition period, financial settlement, governance arrangements of the Withdrawal Agreement, Northern Ireland protocol, and protocols on Gibraltar and Sovereign Base areas.

Can the transition period be extended?

Any decision to extend had to be made by mutual EU and UK agreement, taken before 1 July 2020 and could not be for more than one or two years. But the UK has chosen not to extend.

Is the UK still a member state?

The UK has ceased to be a Member State but, during the transition period, the UK continues to be treated by the EU as a Member State and EU law continues to apply in the UK. This means that the UK continues to participate in the EU Customs Union and the Single Market four freedoms (free movement of goods, persons, services and capital) continue to apply.

The UK is, however, no longer able to participate in EU decision-making and does not have a vote. It can no longer participate in the EU institutions, agencies, offices and bodies (except to the extent provided in the Withdrawal Agreement). But the powers of the EU institutions, agencies etc (such as the EU competition authorities) conferred under EU law continue in relation to the UK during the transition period. The Court of Justice of the European Union (CJEU) also continues to have jurisdiction over the UK during this period.

What is the law in the UK during the transition period?

EU law continues to bind and have effect in the UK during the transition period and references to “member states” in UK and EU law include the UK. But not all references to the EU, EEA and member states will automatically include the UK and amendments may need to be made when those terms are used in private contracts. Also, third country rules and regulations which use those terms need to be checked to see whether they still include the UK.

Existing EU law continues to apply, so that EU Regulations which already apply in the UK (for example, the Market Abuse Regulation) continue to apply and EU Directives which already bind the UK (for example, the Shareholder Rights Directive) continue to bind it.

New EU Regulations which apply during the transition period will also form part of UK law and the UK must implement new EU Directives if the transposition deadline falls within the transition period.

In terms of litigation and enforcement, the CJEU continues to have jurisdiction in proceedings brought by or against the UK, or in references from UK courts for the interpretation of EU law, before the end of the transition period.

There are some exceptions to the above and some special rules.

Have the Brexit SIs come into force

Unless otherwise stated, Brexit SIs which are expressed as coming into force on (or immediately before or after) exit day are to be read instead as entering into force on (or immediately before or after) the end of the transition period. Some of them may be subject to amendment or repeal as negotiations on the future UK/EU relationship progress.