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On 10 April 2019, the European Union granted the United Kingdom a flexible extension, coined a “flextension”, until 31 October.  This additional period of time is intended, to allow the UK to ratify the Brexit Deal, an agreement devised between the EU and the UK for the orderly exit of the UK from the bloc. The Deal includes a transition period, a controversial solution to manage the border between Ireland and Northern Ireland, and provides for such things as citizens’ rights and the legal status of goods in transit at the moment of Brexit. The flextension will end as soon as the Deal is ratified, if it happens before the end of October.  Should the UK Parliament not find a majority to support the Deal, the UK could be forced to seek another extension or risk crashing out of the EU on Halloween.

The so-called “cliff edge” Brexit remains a real possibility considering that the Deal has been rejected by Members of the UK Parliament three times already, and successful cross-party negotiations is not by any means a foregone conclusion.  The UK certainly will continue its no deal preparations, including efforts to strike post-Brexit trade agreements with third countries; to date, the agreements it has secured cover only about 11 per cent of UK trade by value. The UK also could use this time to reconsider its Brexit strategy, which ranges from holding a second referendum to attempting to amend the Political Declaration attached to the Deal which delineates mutual commitments concerning the future UK-EU relationship to abandoning Brexit altogether.
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On 14 November 2018, the UK Cabinet approved an agreement permitting the orderly exit of the UK from the European Union (EU), commonly known as Brexit.  Without such Withdrawal Agreement, the UK would crash out of the EU on 30 March 2019, effectively paralyzing trade between the UK and the Bloc.  As of this date,

The European Union (EU) is preparing to treat the United Kingdom (UK) as a third country after its withdrawal from the bloc, commonly known as Brexit.  Unless a deal is agreed before 29 March 2019, the UK’s trade with the EU will be heavily impacted by regulatory restrictions, increased costs, and lengthier procedures applicable to the movements of people, goods and services.  Less obvious is the impact on trade of the “no deal” scenario from potentially restricted data flows. With only eight months left until Brexit Day, the UK and EU have yet to start talks on a data protection agreement.

Data flows play an increasingly important part in international trade and are estimated to contribute up to 2.8 trillion USD to the world economy.  In 2016 alone, EU services reliant on data exported to the UK, such as finance, telecoms and entertainment, were worth approximately 36 billion EUR. Data flows from the UK to the EU constitute as much as three-quarters of all data from the UK. Under the EU’s General Data Protection Regulation (GDPR), however, personal data included in such data flows must be protected. For companies, this can include employee data (e.g. payroll information, biographical information, etc.) and customer data (e.g., contact information, transaction information, biographical information, social media profiles, etc.). Data flows from the EU to a third country are permitted if there is an adequacy decision by the European Commission that the third country’s data protection laws are adequate to meet the objectives of the GDPR or through another adequacy mechanism approved by the European Commission (e.g., EU-approved Binding Corporate Rules, use of Standard Contractual Clauses, etc.).
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On 4 June, the European Commission advised economic operators to prepare for the consequences of the United Kingdom leaving the European Union on their imports and exports.   Following the UK’s withdrawal, UK inputs, including materials and certain processing operations, will no longer be considered EU origin for purposes of enjoying preferential treatment.   Whether a particular good qualifies depends on the rules of origin specified in each trade agreement between the EU and its trading partners.  The Commission advises EU exporters to treat any UK inputs as “non-originating” when determining the EU’s treatment of their goods post-Brexit and to take appropriate steps to be able to prove the preferential origin of goods without counting UK inputs as EU content.  Economic operators importing goods into the EU also are advised to take steps to ensure that the exporter can demonstrate compliance with EU preferential origin rules given the exclusion of UK inputs after Brexit.
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Despite the fact that export controls on dual-use goods derive from international agreements such as the Wassenaar Arrangement, significant differences can be seen as controls are implemented by different countries. The same is true in the European Union notwithstanding the fact that the EU’s dual-use regulation (Council Regulation (EC) No. 428/2009) is binding on its 28 Member States.  Accordingly, while Regulation 428/2009 exempts telecom and information security equipment with encryption where there is limited cryptography functionality and/or products are mass-marketed and cannot be readily changed (the “Cryptography Note”), the exact scope of the exemptions is determined by each Member State.
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The basics are well-known:  having triggered Article 50 to terminate its membership in the European Union, the United Kingdom has a precious 18 months to get a deal done.  Unless every one of the 27 other Member States approve an extension of time, the UK will be a so-called “third country” vis-à-vis the EU on 30 March 2019.   The UK Government, under the leadership of Prime Minister Theresa May, has proposed a “hard Brexit” that enables the EU to conclude trade agreements with other countries in what has become known as the “Global Britain” approach.   Aspirations aside, the deal to be negotiated between the EU and the UK can range from virtually no change to the status quo for years to come to a quick and risky departure that greatly increases the pressure on the UK to negotiate favorable trade agreements with the EU and other trading partners.
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