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What does the Article 50 extension mean for your business?

The Article 50 extension to 31 October 2019 agreed between the EU and the UK on 10 April 2019 will be welcomed by many businesses.

That said whilst the agreement will at least allow an immediate No Deal exit to be avoided, it doesn’t unfortunately eliminate the risk of an ultimate No Deal exit occurring later this year. 

Notwithstanding the fatigue, frustration and cost of having to deal with Brexit uncertainty, we would recommend that Irish businesses maintain a high level of preparedness for such an outcome given the highly uncertain political environment that continues to exist in the UK.

Key details agreed of the agreement reached on 10 April regarding the extension to 31 October are:

  • The extension can be shortened if the Withdrawal Agreement is ratified fully by both parties before this date. In this scenario, the UK would cease to be an EU member on the 1st day of the following month after ratification.
  • If the UK has not ratified the Withdrawal Agreement by 22 May, the country must hold EU elections. If it fails to do so, the extension will automatically end on 31 May.
  • During the extension, the UK will remain a full EU member state with representation and voting rights in the EU institutions. The EU has noted the UK’s commitment to act in a “constructive and responsible manner” during the extension and to “refrain from any measure which could jeopardise the attainment of the Union’s objectives”.
  • The Withdrawal Agreement cannot be reopened during the extension period. That means the end of transition remains 31 December 2020, unless an extension is agreed.
  • The UK can revoke Article 50 during the extension period.