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European Commission warns companies to start making contingency plans for a hard Brexit

On 30th March 2019, the United Kingdom will leave the EU and the possibility of there being no agreement in place between the UK and the EU seems to be increasing. In response, the EU has warned companies to start planning for this scenario.

In a European Commission Communication which was adopted on 19th July, the Commission states:

“While the EU is working day and night for a deal ensuring an orderly withdrawal, the UK's withdrawal will undoubtedly cause disruption – for example in business supply chains – whether or not there is a deal. As there is still no certainty that there will be a ratified withdrawal agreement in place on that date, or what it will entail, preparations have been ongoing to try to ensure that the EU institutions, Member States and private parties are prepared for the UK's withdrawal. And in any event, even if an agreement is reached, the UK will no longer be a Member State after withdrawal and will no longer enjoy the same benefits as a member. Therefore, preparing for the UK becoming a third country is of paramount importance, even in the case of a deal between the EU and the UK.

“Having said that, preparing for the UK's withdrawal is not only the responsibility of the EU institutions. It is a joint effort at EU, national and regional levels, and also includes in particular economic operators and other private parties – everyone must now step up preparations for all scenarios and take responsibility for their specific situation.”

An accompanying fact sheet spells out the situation more starkly, stating that: "It is now urgent that businesses in the EU start preparing for the UK’s withdrawal, if they have not yet done so ... all businesses concerned have to prepare, make all necessary decisions, and complete all required administrative actions, before 30 March 2019 in order to avoid disruption."

In an annex to the Communication, the European Commission published a list of areas which may be impacted by Brexit and which need to be considered in Brexit contingency planning. Read the list here (PDF).



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