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Potential Implications of Brexit

Client Updates

The Brexit train is now in full motion. The EU and the UK have embarked on one of the most politically sensitive and legally complex international negotiations of modern times: those relating to the UK's withdrawal from the European Union.

The negotiations will focus on two main agreements. First, a divorce agreement on the terms of the UK’s separation from the EU, which needs to cover three politically-charged issues:

  • the UK's outstanding EU budget commitments and other financial liabilities towards the remaining 27 Member States of the Union (the “EU27”);
  • the rights of EU citizens in post-Brexit UK (and vice versa); and
  • the border between Northern Ireland and the Republic of Ireland.

Second, an agreement on the future relationship between the EU27 and the UK. Importantly, the EU27 have made it clear that negotiations on the second agreement can commence only when sufficient progress has been made with the divorce agreement.

The difficulty of these negotiations is further compounded by enormous time pressure, as the agreements must be in place at the latest by 29 March 2019 when the UK will automatically leave the EU. On 22 September 2017, UK Prime Minister May proposed to implement a two-year transition period, starting on 29 March 2019, during which the UK and the EU27 would continue to have access to each other's markets on current terms. However, whether and under which conditions this transition period is accepted by everyone remains an open question.

Brexit will have wide reaching implications for international businesses. If the UK remains committed to leaving the EU Single Market and the Customs Union, they will lose the benefits of free movement of goods, services, people and capital across EU Member States. This would clearly have far-reaching implications on areas such as international trade, labour and employment and cross-border deals involving the UK.

Baker Botts lawyers have produced a White Paper setting out the fundamentals of Brexit and the likely implications of the various possible outcomes. We have also produced a Brexit Video by Brussels Partner Catriona Hatton which provides background on the Brexit negotiations. As this hot topic develops, we will be sending out regular updates on the areas of most concern for our clients.


Baker Botts is an international law firm of approximately 700 lawyers practicing throughout a network of 12 offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy, technology, and life sciences sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit

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