LONDON, April 15, 2019 – Despite a new Brexit extension for the UK until 31 October 2019, Baker Botts’ Brussels Partner, Matthew Levitt, says that businesses remain in significant uncertainty as to when, whether or how Brexit will occur.
There are a number of factors at play between now and 31 October. It is ever more critical for businesses that have operations or are doing deals in the UK and EU to take practical measures to prepare for Brexit, particularly in areas that would be affected such as transactions, competition law and international trade, according to Mr. Levitt.
- "Even though Brexit has not occurred on 12 April uncertainty for business continues for another 6 months, unless the UK government is able to win approval for the withdrawal agreement by the House of Commons. If it can do this by 22 May it can avoid the UK’s participation in EU parliament elections, which seems an unlikely scenario.
- The extension to 31 October will therefore be used in an attempt build consensus for an alternative arrangement, which may involve a customs union with the EU and/or another referendum, acceptable to both the House of Commons and the EU.
- Another factor is that Prime Minister Theresa May’s own position is looking increasingly precarious. The prospect of her being replaced by a more hard-Brexit Prime Minister will make it even tougher to build consensus for a new deal. Failing such a consensus, the UK will have to request yet another extension, which the EU will be increasingly unlikely to grant.
- Otherwise the UK will leave on 31 October without a deal, with all the serious consequences for business and the economy that would entail,” added Mr. Levitt.
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