Latest Brexit developments has been saved
Latest Brexit developments
13 January 2020
Regulatory News Alert
Before Christmas, Boris Johnson and the Conservative party swept the UK elections, winning 364 seats out of 650. With an absolute majority, the Brexit mandate was made clear: the UK will leave the Single Market on 31 January 2020.
However, regardless of Boris Johnson’s clear campaign slogan ‘Get Brexit done’, there are still different scenarios that could materialise in the coming months (or years) concerning how the UK will effectively execute its exit from the European Union.
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Currently, the ‘Brexit date’ is 31 January 2020, but will be effective, only if the final steps of the process to pass the Withdrawal Agreement deal between Prime Minister Boris Johnson and the EU goes through in Parliament.
The likelihood of keeping to this date was greatly increased when on Thursday 9 January, the House of Commons passed the Withdrawal bill by 330 votes to 231. The bill will now move on to be examined by the House of Lords later this week. If no changes are made, the EU Parliament could ratify the Brexit deal even before the deadline.
Figure 1 illustrates the different possible outcomes, depending on whether an agreement is reached on a potential extension of the transition period or not, and most importantly whether a Brexit deal is agreed between the EU and the UK (Future Economic Partnership) or, on the contrary, no deal is agreed (hard Brexit).
Potential impact on cross-border FSI players
Luxembourg as a European Hub
Bearing in mind that sooner than later the UK will leave the EU, FSI cross-border players will need to accelerate their work to define and implement their response plan to (hard) Brexit—if not already done so. An evaluation must be performed to ensure that necessary steps to prepare for Brexit have been taken. Key elements to find a solution are as follows:
- Have you assessed your future ability to access the markets, both inside and outside of the EU through loss of access to trade agreements?
- Have you thought about the potential main blockers to provide services and the necessary actions/business continuity plans to remain compliant e.g. tariffs, authorisations, licences, approvals, product standards, labelling, and other domestic restrictions?
- Have you reviewed your risks register in light of a potential no-deal Brexit outcome and model the potential impact of no-deal in your forecast?
- Are you aware of the relevant legislative and regulatory changes?
- Have you considered impacts and defined a strategy for workforce and communication to employees?
In this context, mainly thanks to its robust and diversified financial ecosystem, political stability, high quality of life, and multilingual, highly-skilled talent, Luxembourg has become the main post-Brexit destination for those players in the market looking for a new European hub. Several key financial players, in preparation for Brexit, have chosen Luxembourg as their continental EU location, expanding their existing presence, or creating a new one.
How can Deloitte help?
Deloitte has developed a systematic approach: a ‘health check’ to assess the potential impacts Brexit may have on your structure and organisation. From there, based on both business development plans and legal realities, Deloitte can help you implement operational and regulatory changes for your robust post-Brexit environment strategy.