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17 April 2019

Prepa­ra­tions for Brex­it

The European Council unanimously and in agreement with the UK Government extended the deadline for withdrawal under Article 50 until 31 October 2019. While the German government is still assuming that Britain’s withdrawal from the EU will be orderly, it is also preparing for a possible “no deal” scenario. Our dedicated Brexit page includes important information on preparations for Brexit in the areas of financial markets, customs, budgetary issues and taxation.

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Source:  Fotolia

On 10 April 2019, the European Council (Art. 50) unanimously and in agreement with the UK Government extended the deadline for withdrawal under Article 50 until 31 October 2019. The aim is to give UK policymakers more time to create clarity on important questions concerning adoption of the Withdrawal Agreement and the nature of the future relationship.

In its Con­clu­sions [PDF, 171KB] , the European Council underlined that the UK must take part in the European elections in May if it is still a member of the EU at this time. Should the UK fail to uphold this obligation and does not hold elections, it will automatically leave the EU on 1 June 2019.

Furthermore, the European Council reiterated that the Withdrawal Agreement will not be reopened, but simultaneously emphasised its willingness to adapt the Political Declaration under certain circumstances if the UK so desires. There can be no negotiations on future relations during the extension to what is known as the Article 50 deadline.

Finally, the European Council underlined its clear expectation that the UK adhere to the principle of loyal cooperation and in particular that it does not impede the EU’s further development.

What has happened so far?

Agreement was reached on 25 November 2018 between the Heads of State and Government of the EU27 and the UK Government at a special meeting of the European Council. This consists of the With­draw­al Agree­ment [PDF, 3MB] and the Po­lit­i­cal Dec­la­ra­tion on the fu­ture re­la­tion­ship [PDF, 126KB] negotiated between the EU and the UK.

The 585 page With­draw­al Agree­ment [PDF, 3MB] lays down the arrangements for the UK’s withdrawal from the EU and includes key aspects of particular importance to us. Under this agreement, there will be comprehensive protection of the rights of our EU citizens who live in the UK and the rights of UK citizens who live in the EU; they can continue to live, work, study and enjoy social security protection there. The UK’s financial obligations are also laid down in the agreement. Furthermore, the Withdrawal Agreement safeguards the open border between Northern Ireland and Ireland and thus the peace in Northern Ireland that was painstakingly achieved 20 years ago. In accordance with the European Council’s guidelines, the Court of Justice of the European Union will play an important role in monitoring and implementing the agreement. By agreeing a transition period until the end of 2020 (which can be extended once for up to two years), we have also created time for talks on the future relationship. This will provide the business sector and members of the public with important planning certainty.

The Po­lit­i­cal Dec­la­ra­tion on the fu­ture re­la­tion­ship [PDF, 126KB] sets out the framework for negotiations on the future relationship between the EU and the UK. The transition period laid down in the Withdrawal Agreement is to be used to formally negotiate the future relationship on the basis of the Political Declaration after the UK has left the EU. The Declaration essentially envisages an economic partnership and a security partnership.

What next?

Three attempts to secure the House of Commons’ approval of the Withdrawal Agreement (known as a “meaningful vote”), which is needed before formal ratification by the House of Commons and House of Lords can be undertaken, have failed so far. This means that there is currently no consent on the UK side to the agreement reached.

On the European side, the Withdrawal Agreement has been forwarded to the European Parliament for a vote in accordance with Article 50 of the Treaty on European Union. It can be ratified at any time.

Despite this, the German Government is at the same time continuing to prepare for a withdrawal without an agreement.

Cushioning as far as possible the negative impact for those affected by Brexit is a major priority for us. That is why it is particularly important that all members of the public and companies in Germany affected by Brexit keep themselves informed about what will happen. All of them should prepare thoroughly and in good time for the UK’s withdrawal from the EU.

The following websites provide key information about Brexit and about the preparations that are important to make:

You will find further information on preparations for Brexit, in particular a detailed catalogue of questions and answers, on the website of the Federal Foreign Office, which is the lead ministry on Brexit. Information is also available on the website of the German Government.

The Federal Ministry for Economic Affairs and Energy has comprehensive information for businesses on its website, including a Brexit FAQ. In addition, citizens and businesses can contact the Economics Ministry directly with questions about Brexit, either by telephone (+49 (0) 30 340 6065 61) or email (brexit@buergerservice.bund.de).

The German-British Chamber of Industry and Commerce, which is supported by the Federal Ministry of Economic Affairs and Energy, offers an update on the Brexit situation, with links to key information sources.

The German Federal Financial Supervisory Authority (BaFin) answers frequently asked questions on Brexit. The information is particularly relevant for UK banks and insurers that would like to open branches or establish subsidiaries in Germany, as well as providers and issuers of securities.

The Deutsche Bundesbank provides information relating to banking supervision, i.e. for financial institutions that may want to reconsider their location strategy. The Bundesbank has also set up a dedicated phone number (+49 (0) 69 9566 7372) and e-mail address (Brexit@bundesbank.de) for financial institutions affected by Brexit.

At the European level, the European Central Bank is committed to providing information to banks and interested parties about its supervisory expectations. A dedicated page on relocation to the euro area answers frequently asked questions (FAQs) about the ECB’s role in supervising euro area banks.

The German customs administration provides Brexit-related information regarding legal repercussions in the context of the enforcement of intellectual property rights and the necessary customs measures.

With regard to chemicals legislation, the European Chemicals Agency (ECHA) has published comprehensive information on the impact of Brexit in this area, in particular on the EU's REACH regulation.

A number of professional organisations in Germany have given advice regarding the UK's withdrawal and related issues. The Federation of German Industries (BDI) has published extensive information on the consequences of Brexit for business.

The Association of German Chambers of Commerce and Industry (DIHK) has developed a “Brexit checklist” tool which allows users to create their personal checklist as a PDF file.

In the area of financial services, many industry associations have prepared comprehensive information relating to their respective sector. For example, the German Insurance Association has published a position paper on future economic relations between the EU and the UK.

With regard to human medicines, the German licensing authorities (the Federal Institute for Drugs and Medical Devices and the Paul-Ehrlich-Institut) both provide information on the impact of Brexit on pharmaceutical companies.

At the European level, the European Medicines Agency (EMA) provides guidance to help pharmaceutical companies responsible for both human and veterinary medicines prepare for the United Kingdom’s withdrawal from the EU.

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