On 19 July 2018, the European Commission issued a further Communication on preparing for the UK’s withdrawal from the EU. The text of the Communication calls on Member States and private parties to step up preparations and follows a request by the European Council last month to intensify preparedness at all levels and for all outcomes.
The Communication states that EU administrations and private entities need to prepare for two possible main scenarios:
- if the Withdrawal Agreement is ratified before 30 March 2019, so that it can enter into force on that date, EU law will cease to apply to and in the UK on 1 January 2021 i.e. after a transition period of 21 months, the terms of which are set out in the Withdrawal Agreement; and
- in the absence of an agreement on a Withdrawal Agreement, or if the Withdrawal Agreement is not ratified in time by both parties, there will be no transition period and EU law will cease to apply to, and in, the UK as of 30 March 2019 (also referred to as the cliff edge scenario).
The Communication sets out the main consequences of both scenarios.
At the end of the Communication the Commission sets out certain sectoral illustrations of preparedness challenges and actions. One such illustration covers financial services.