BREXIT – October 2018 – The Moment of Uncertainty

BREXIT – October 2018 – The Moment of Uncertainty

The Brexit referendum of 23 June 2016 in the United Kingdom surprised European society, which became uncertain about the agreement between the European Union and the United Kingdom on a huge set of issues. Two years after Brexit, this uncertainty remains.

Negotiations on the UK exit agreement are still far from over. Michel Barnier, the European Union’s representative for the Brexit affair, recently said that “October is the moment of truth”, referring to the possibility of an agreement with the United Kingdom to leave the European Union. The European Council held on 18 October 2018 is unsuccessful in the Brexit negotiations.

Surveys carried out in recent months in the United Kingdom reveal that the majority of the British people support the holding of a new referendum on the regime of the final agreement on leaving the European Union. The British Labor Party, 75% of its members intend to conduct a second referendum vote where, again, the output or the UK stay in the European Union.

However, the Conservative Party Government of Theresa May refuses to hold a new referendum under any circumstances.
On 20 October 2018, 600,000 people attended a huge demonstration in London, the UK capital, demanding to be put a brake on Brexit with new referendum to vote on output or the UK stay in the European Union and, a new discussion on the conditions of Brexit, if approved.

One of the major problems for the success of the Brexit agreement is the border of Northern Ireland (belonging to the United Kingdom) with Ireland, an independent country that will remain a member of the European Union. The Irish border will be the only land border between the United Kingdom and the European Union. Since peace was achieved between these two territories, the physical boundary was abolished and about 30,000 people cross this border every day to work or do business. The re-establishment of the physical border between Ireland and Northern Ireland will create enormous obstacles and damage to the people and the local economy, and above all will rekindle old conflicts. The United Kingdom Government agrees on the need to avoid a physical frontier but refuses the European Union’s plan in which the island would be fully included in the customs union because it would constitute a border between the autonomous area of Northern Ireland and the rest of the territory.

While Scotland, integrated in the United Kingdom, renews the old aspirations for its independence, since the results of the referendum in this territory were largely against Brexit. The Scots want their regional Parliament to have autonomy to approve their own Brexit laws, which are closer to the European Union, which was, of course, rejected by the Government of London.
The truth is that by 23.00 on 29 March 2019, the United Kingdom leaves the European Union definitively and officially, with a transitional period starting on 31 December 2020.

Portugal was considered the fourth country in the European Union most vulnerable to the impact of Brexit, mainly due to exports to the United Kingdom, the high number of Portuguese emigrants in the UK as well as the large number of UK citizens resident in Portugal. It is time to pay attention to the risks and predictable scenarios of Brexit with impact for Portugal.

What are the expected consequences?

The Statute for Citizens of the European Union and the United Kingdom

Until 29 March 2019 citizens of the European Union and citizens of the United Kingdom retain similar rights, for example the right to remain and work without the need for authorization visas, access to pensions or other social services.

After this date, we do not know whether it will be possible for settled status to enable Union citizens to continue to work in the United Kingdom for the time allowed by official entities, benefiting from public services such as health and schools, public funds and pensions, in compliance with all legal requirements. All details must still be approved by the UK Parliament. The rights of citizens of Nor The transport of people and goods between the European Union and the United Kingdom have higher requirements of controls and greater bureaucracy, including maritime services and scheduled air between Portugal and the United Kingdom, who will lose the benefits of simplified and rapid procedures.way, Iceland, Liechtenstein and Switzerland are still being negotiated.

Family Law, the big problem of the regulation of parental responsibilities

This is possibly one of the issues that may be of further concern to the families of the United Kingdom and the European Union.

Much attention will need to be paid to the regulation of parental responsibilities, often with issues of dual nationality of children, the joint exercise of responsibilities for parents living in different countries. There will also be the need to ensure the fundamental right to family life, namely to ensure that there will be no obstacles to travel for parents or children to the country in which they reside their families.

Other important issues are: the application of measures to protect the child, the carrying out of measures and expertise, as well as situations of non-compliance with the joint exercise of parental responsibility or family cohabitation, with the parents living in different countries, which must be carefully regulated.

Cross-border workers and pensioners

One of the most important issues in the Brexit negotiations is the protection of cross-border workers and pensioners resident in the United Kingdom and the European Union. This issue has been at the center of active negotiations.

The law of non-permanent residents in force in Portugal, with the objective of calling qualified professionals, people with high financial value and foreign pensioners, is now very important.

The Brexit may also increase more interest in the Portuguese regime of Golden Visa, allowing a residence permit in Portugal through investment activities, particularly in the property, and capital transfers or establishment of companies with jobs.

Tax aspects in general

With Brexit, the European tax elimination directives and VAT will no longer apply and the United Kingdom.

After Brexit, the United Kingdom will no longer benefit from the advantages of the Customs Union. If there is no agreement for Brexit, the rules and regulations of the World Trade Organization (WTO) and the General Agreement on Tariffs and Trade (GATT) will be in force. They are thus classified as transactions between a third country (UK) and a European country, greatly increasing bureaucracy and customs fees.

Companies with international investments will be forced to review their current strategy and assess the risks to eliminate or mitigate international double taxation. Portugal remains an attractive country for foreign investment.

Courts and Judicial Decisions, with more delay and complexity

With the agreement in Brexit, the European Union regulations do not apply to disputes related companies, British citizens or events in the UK, and vice – versa. There will be longer and more difficult notifications in general and the enforcement of European judicial decisions in the United Kingdom and vice versa.

The Court of Justice of the European Union

The European Commission wants the European Union Court of Justice hold full jurisdiction over pending cases, but also, in certain circumstances, on future cases during the transition period. After the transition period, the European Union Court of Justice of absolutely no longer have any jurisdiction in disputes relating to the UK.

Conclusion

Uncertainty and risks are enormous.

A few months after the divorce between the United Kingdom and the European Union – March 29, 2019 – there is still much to define and solve for the future.

The impact of the UK’s exit from financial activity, employment, the economy and the lives of citizens will be enormous both for the UK and for the European Union. The success of the negotiations for signing the final Brexit agreement is therefore very important.

Brexit Timeline

June 23, 2016

The UK held a referendum for out of the European Union, winning supporters of Brexit.

March 29, 2017

The British Government has activated Article 50 of the Treaty on European Union, starting the two-year period until the United Kingdom leaves the European Union.

December 2017

The United Kingdom and the European Union agreed on the terms of the exit from UK, particularly on the final cost to pay for the exit.

March 2018

The United Kingdom and the European Union agreed on a transition period that will last until December 2020.

May to October 2018

Time for negotiations Brexit between the UK and the European Union.

October 18/19 2018

Meeting of the Council of Europe, which ended without final agreement of the Brexit.

March 29, 2019

The United Kingdom will definitely leave the European Union.