After the leave result of the Brexit referendum, UK’s exit process from the EU has started however the UK is still a member of the EU and the EU acquis is still being enforced.
EU is governed by the Treaty on the Functioning of the EU and the Treaty on the EU (Lisbon Treaty). The Article 50 of the Treaty on the EU regulates the member states’ right to a withdrawal and the relevant procedure. Within the scope of the aforementioned article a two years period is set out which will be initiated by the notification on withdrawal by the UK.
The UK government confirmed that the Article 50 will be triggered before the end of March 2017. The EU officials underline that official negotiations shall begin only after the notification on withdrawal is made. Nonetheless the EU does not have a right to compel the withdrawing member state to make a notification.
On the other hand, there is no regulation under the Article 50 on whether the member state can revoke its notification on withdrawal or not.
With the Article 50, in a way the EU has a right to govern the negotiations.
Approximately 3 million EU citizens live in the UK which constitute %6.6 of the total work force. At present and during the two years period starting from the notification on withdrawal the EU legislation will continue to be binding. Therefore within this period the EU citizens living and working in EU will continue to possess their rights of freedom of movement. Within this scope it is estimated that the permanent residency rights of the EU citizens that are living in the UK for five or more years will not be effected.
On the other hand, it is stated that during the two years negotiation period different regulations may be determined with respect to EU citizens. Therefore due to these regulations the EU citizens may be required to make applications to obtain permits for living or working in the UK which will be similar to the application of the citizens from a third country.
The political developments in the UK, EU and the world together with the withdrawal agreement that will be signed upon the negotiation process will be key factors with regards to the possible financial outcomes and their effects in the long terms. The economists underline that the current uncertainty which is prevalent at the moment is causing an unrest.
It is suggested that the private-law contracts may be terminated by evaluating the exit or the legislation that will be implemented after the exit as a force-majeure, frustrating event or material adverse effect within the scope that will be permitted by the terms of the contract and therefore disputes may occur as a result.
Especially regulated areas such as corporate, competition, data privacy, tax, aviation, IP law and clinical research are expected to be amended significantly following the exit.