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A “no-deal” scenario
In a “no-deal” scenario, the UK will become a third country without any transitionary arrangements. All EU primary and secondary law will cease to apply to the UK from that moment onwards. There will be no transition period, as provided for in the Withdrawal Agreement. This will obviously cause significant disruption for citizens and businesses.
In such a scenario, the UK's relations with the EU would be governed by general international public law, including rules of the World Trade Organisation. The EU will be required to immediately apply its rules and tariffs at its borders with the UK. This includes checks and controls for customs, sanitary and phytosanitary standards and verification of compliance with EU norms. Despite the considerable preparations of the Member States' customs authorities, these controls could cause significant delays at the border. UK entities would also cease to be eligible to receive EU grants and to participate in EU procurement procedures under current terms.
Similarly, UK citizens will no longer be citizens of the European Union. They will be subject to additional checks when crossing borders into the European Union. Again, Member States have made considerable preparations at ports and airports to ensure that these checks are done as efficiently as possible, but they may nevertheless cause delays.
The EU's “no-deal” preparedness and contingency work
Since December 2017, the European Commission has been preparing for a “no-deal” scenario. It has published 90 preparedness notices, 3 Commission Communications, and has made 19 legislative proposals (see below).
The Commission has held extensive technical discussions with the EU27 Member States both on general issues of preparedness and contingency work and on specific sectorial, legal and administrative preparedness issues. The Commission has now also completed its tour of the capitals of the 27 EU Member States. The aim of these visits was to provide any necessary clarifications on the Commission's preparedness and contingency action and to discuss national preparations and contingency plans. The visits showed a high degree of preparation by Member States for all scenarios.
Member States have also been engaged in intensive national preparations. An overview of residency rights in the EU27 Member States is available here, as well as direct links to national preparedness websites.
Contingency and preparedness legislative measures
To date, the Commission has tabled 19 legislative proposals. 17 proposals have been adopted or agreed by the European Parliament and the Council. Formal adoption of all those files by the European Parliament and Council is currently taking place. Two proposals are to be finalised by the two co-legislators in due course.
As outlined in the Commission's Brexit Preparedness Communications, the EU's contingency measures will not – and cannot – mitigate the overall impact of a "no-deal" scenario, nor do they in any way compensate for the lack of preparedness or replicate the full benefits of EU membership or the favourable terms of any transition period, as provided for in the Withdrawal Agreement. These proposals are temporary in nature, limited in scope and will be adopted unilaterally by the EU. They are not “mini-deals” and have not been negotiated with the UK.
The EU has maintained - and will continue to maintain - a fully united position throughout its preparations, and during any possible “no-deal” period.
The “no-deal” contingency measures include:
- The EU Budget (in the process of final adoption): in a “no-deal” scenario, the EU will be in a position to honour its commitments and to continue making payments in 2019 to UK beneficiaries for contracts signed and decisions made before 30 March 2019, on condition that the UK honours its obligations under the 2019 budget and that it accepts the necessary audit checks and controls. [...]
- Financial services: temporary, limited measures to ensure that there is no immediate disruption in the central clearing of derivatives, central depositaries services for EU operators currently using UK operators, and for facilitating novation, for a fixed period of 12 months, of certain over-the-counter derivatives contracts, where a contract is transferred from a UK to an EU27 counterparty. [...]
- Social security entitlements: the entitlements (such as periods of insurance, (self) employment or residence in the United Kingdom before withdrawal) of those people who exercised their right to free movement before the UK's withdrawal are safeguarded.
- Visa reciprocity (in the process of final adoption): visa-free travel to the EU for UK nationals if the UK also grants reciprocal and non-discriminatory visa-free travel to all EU citizens. [...]