Brexit: We have a deal!

Overview

The UK is now ready to leave the EU on the 31st of January 2020.  The European Parliament and the leaders of the EU member states have officially given the green light to the Withdrawal Agreement that provides the terms of the procedure for the UK’s withdrawal from the EU. The withdrawal agreement entails the following from an immigration perspective: 

•  A transition period will start on 1st of February 2020 and last until 31st of December 2020, if no extension is requested and approved.

• After Brexit, the EU and the UK will enter into negotiation regarding their future collaboration, including immigration considerations.

• During the transition period, UK citizens and their family members from third countries will continue to have the right of free movement and vice versa. This implies a continued right to travel to, live, work and study in the EU member states and vice versa.

• After the end of the negotiations between the EU and the UK during the transition period, the Swedish government along with the other EU governments will publish policy guidance on new immigration requirements for UK nationals and their families.

Background

The UK’s exit from the EU formally started in March 2017 when the UK Government sent in their withdrawal request in accordance with Article 50 of the EU treaty (TEU). According to article 50 TEU, the UK’s participation in the EU shall cease to be valid two years after the notification to the European Council is made, which was the 29th of March 2019. This however, was not the case. 

Since March 2017, discussions have taken place between Great Britain and the EU to agree on a series of questions relating to their future relationship. Among other things, issues concerning trade agreements, the economic effect of the exit, the UK’s financial settlement with the European Union for the exit and the free movement of individuals have been discussed. In connection with these discussions and attempts to reach an agreement, they have also discussed what would happen if no agreement on the exit would be reached – the so-called no-deal Brexit. 

On the 15th of January 2019 the British Parliament voted against the exit agreement drawn up by the EU and the UK government. The UK’s exit date was extended to 31st of October 2019 since the British Parliament voted no to the original exit treaty negotiated between the European Parliament and the British government. An additional extension was granted in October 2019, setting the 31st of January 2020 as the UK’s final day as an EU country. 

After approval by both the House of Commons and the House of Lords during January 2020, the European Parliament approved the Withdrawal Agreement by a simple majority of votes cast in accordance with Article 50 (2) of the Treaty on the European Union. The EU member states formally approved the agreement in writing on the 30th of January 2020, which paved the way for the UK’s departure from the EU at midnight on 31st of January 2020. The EU and the UK will now enter into an agreed transition period as stated in the Withdrawal Agreements which will ensure breathing space to allow the new negotiations between the EU and the UK regarding their future collaboration to take place. 

The withdrawal agreement

The withdrawal agreement between the EU and the UK includes a so-called transition period. The transition period will begin on the 1st of February 2020 and is planned to last until the 31st of December 2020 if no extension is requested and approved. The UK government are not planning to ask for an extension, although this might change. The transition period can be extended by up to one or two years if requested and approved before 1st of July 2020. During this period the UK will lose its membership of the EU political institutions and there will be no British members of the European Parliament and the European Commission. However, while the UK will no longer have voting rights it will continue to follow EU rules. This means that the UK will remain in both the EU customs union and the single market, and the free movement of people will continue.

For most people the transition period means that things will stay the same until the 31st of December 2020. UK nationals and their family members from third country nations will still have the right to travel to, live, work and study in the EU member states and vice versa. However, it is important to note that this will not be the situation after the 31st of December 2020.

What happens next?

After Brexit and during the transition period, the negotiations between the EU and the UK regarding their future relationship after the transition period will start. As part of these negotiations, the EU countries and the UK will decide the immigration status that EU citizens will have in the UK and vice versa. After an exit agreement has been signed, the Swedish government along with the other EU governments will publish policy guidance on new immigration requirements for UK nationals and their families.

Unless the EU decides to make specific arrangements for UK nationals in the exit agreement, the general rule will be that UK nationals and their families will have to apply for residence and/or work permits in order to continue or start residing and/or working in Sweden. As regards the possibilities of leisure travel to Sweden from 1st of February 2020, no visa will be required as long as the stays in EU countries do not exceed 90 days during a 180-day period. Deloitte will continue to follow the developments of the negotiations after Brexit.

Deloitte commentary

 The UK’s decision to leave the EU has caused uncertainty for businesses and employees over a long period of time. How companies and their employees choose to use the transition period to plan for what is to come will determine the actual impact of Brexit. There are important considerations applicable for companies with internationally mobile personnel.

Actions to consider:

• Get a clear view of whether you have British employees and who they are. Hence, we recommend making an inventory as soon as possible. Special consideration should be given to business travellers, these are rarely fully tracked by companies. 

• It’s time to consider any planned recruitment from the United Kingdom. Prepare ahead for new hires or moves early in 2021. Employers need to plan carefully and manage business expectations. Visa processing times may increase for existing routes and be uncertain for new routes, with potential inconsistencies and uncertainties on the actual process for new routes. New processes take time to be imbedded.

• Think about talent retention and business continuity plans for operations where there is reliance on a foreign workforce.

• Be mindful of the impact on planned start dates – are these being estimated with realistic processing times in mind considering the uncertainty?

• It’s time to consider what your company policy will be offering to your employees and their families in terms of immigration assistance, tax assistance, social security assistance etc. as additional cost may have to be considered.

• Consider tax when planning for these immigration changes. Workers, commuters and business travellers will no longer be governed by freedom of movement rules.

• UK and EU nationals traveling are advised to renew their passports as soon as possible as other types of identification may no longer be valid and since it may take considerably longer to renew passports during the transition period.

• While the Swedish government is yet to publish policy guidance on new requirements for UK nationals, we recommend that all UK citizens now residing in Sweden register with the Swedish population registry if their planned stays are longer than one year. 

• Bear in mind that the considerations applicable for Sweden will also have to be considered in the UK for your businesses there.

Brexit has over a long period of time caused great uncertainty for companies and British citizens when it comes to, among other things, immigration. With a withdrawal agreement including transitional provisions in place, a couple of question marks have been straightened out. Deloitte will of course continue to follow the Brexit developments.