Notice to all CCL clients and associates
We write in regard to the news which broke overnight, that the Referendum on the UK’s membership of the European Union, which took place on Thursday 23rd June, has resulted in a vote to leave the EU.
Our understanding of the official procedure from this point is as follows:
- The UK Prime Minister, David Cameron has advised he will stand down, but not immediately. His stated intention is to depart by October 2016.
- Laws will now need to be passed, to allow the UK to leave the EU.
- To begin the exit process, the UK must inform the European Council, to trigger what is known as ‘Article 50’.
- Whilst the EU leadership has stated they wish Britain to activate Article 50 exit talks ‘as soon as possible’, David Cameron has advised he will not trigger Article 50, leaving this to the incoming Prime Minister.
- Article 50, once triggered, allows for a period of two years, during which the UK would expect to negotiate its terms of exit with the remaining 27 members of the EU.
- During the Article 50 period, the UK will still abide by EU laws and participate in business in exactly the same way as it does currently.
- Once there’s an agreement, it must be put to the House of Commons, and new Acts of Parliament will implement the withdrawal agreement. EU regulations in the UK will, during this process, be repealed, reintroduced or amended and new trading relationships and facilities will be introduced.
We would like to emphasise that this is a complex formal process, expected to take the full two years of Article 50 to enact. Furthermore, Article 50 may not be enacted for some time, as it is likely to be preceded by a period of informal discussion. During this period prior to the UK’s exit from the EU – a minimum of two years – everything will continue as it is currently. All current arrangements, laws, treaties and regulations remain in place.
It is worth mentioning, as we embark on this new phase, that outside the EU, there are multiple precedents for free trade agreements which enable trading with the EU in ways that are as flexible as those afforded by full membership. The European Free Trade Association, comprising Norway, Iceland, Switzerland and Liechtenstein is one such agreement, and there are several similar mechanisms with countries both within Europe and beyond. Being a substantial market, it is inconceivable that such arrangements would not be made with the UK, going forward.
There has been much negative speculation in the world press in the last few hours and in our opinion, it is largely unjustified. It stems from the fact that the process of exiting the EU has not been enacted by any nation before. It is our view that despite the rhetoric apparent in the immediate aftermath of the Referendum declaration, all parties are likely to want to see a transition which allows for a continuation of mutually beneficial trade agreements between all nations and regions.
CCL will continue to keep you apprised of the progress of exit negotiations and any implications, as applicable. If you have any concerns as to the impact of today’s decision on your business, or on the way we work together to deliver our services to you, please do not hesitate – call and discuss it with us. We will share our knowledge and understanding openly and work closely with you through the coming months.
You can reach the team at CCL on +44 (0)20 8231 0900 or via the CCL website: www.ccllhr.com