The Withdrawal Agreement

The Withdrawal Agreement regulates the rights of EU citizens living in the United Kingdom, and the rights of the Britons living in the EU. They can continue to live, work, study and do business in the UK and the EU respectively. These rights will be comprehensively protected for the rest of their lives.

In the context of the Withdrawal Agreement, it has been agreed that EU law for industrial and agricultural goods and EU tariff rules will continue to apply in Northern Ireland, even after the end of the transition period. All of the related controls will be handled at the points of access to the island of Ireland. The British authorities are responsible for this. At the same time, Northern Ireland remains part of the customs territory of the United Kingdom, and can thus be covered by the United Kingdom’s future trade policy. The implementation of the rules is currently under preparation, and is being discussed not least in the EU-UK Joint Committee, which was set up by the Agreement.

Yes. The Withdrawal Agreement stipulates the extent to which the United Kingdom must continue to meet financial obligations to the EU following its withdrawal.

Impact on businesses and citizens during the transition period

In principle, nothing changes initially for citizens and companies as a result of the withdrawal of the United Kingdom. The Withdrawal Agreement provides for a transition period until 31 December 2020 in which EU law basically continues to apply to the United Kingdom and the United Kingdom remains part of the Single Market and the Customs Union.

For example, this means that the fundamental freedoms of the Single Market will continue to apply during the transition period. The United Kingdom must observe EU law and the jurisdiction of the European Court of Justice. Furthermore, it must not adopt any rules that are not in line with EU law during this period.

  • What does the transition period mean for German employees in the United Kingdom and for UK employees in Germany?
    During the transition period, German citizens can make further use of the freedom of movement in the EU and live and work in the United Kingdom. The relevant EU provisions continue to apply. The same applies accordingly to UK citizens in Germany.
  • What happens to deposits on accounts in the UK?
    German citizens can still transfer their savings to UK accounts and transfer them back again. The EU rules on a national deposit guarantee system are not affected by the transition period.
  • How does the transition period impact on German tourists in the United Kingdom?
    Freedom of movement for EU citizens will continue to apply in the United Kingdom during the transition period, i.e. German citizens can travel to the United Kingdom for their holidays (and vice versa) just like before. They do not need visas or anything else.
  • Are new labelling obligations, tariffs or longer delivery periods, etc., to be expected?
    Since the United Kingdom continues to be a full EU Member during the transition period, the existing rules and regulations continue to apply.
    In other words, the United Kingdom remains part of the European Single Market. The fundamental freedoms of the Single Market, including freedom of establishment and the free movement of services and capital, and the specific arrangements in secondary legislation, will continue to apply during the transition period.
    The United Kingdom must not adopt any rules that are not in line with EU law during this period. Thus there must be no tariffs or any new labelling obligations.
    As regards border controls, the United Kingdom is not a member of the Schengen Agreement on the abolition of checks at common borders. Therefore, it has never abolished border controls.
  • Will the transition period impact on trade with the United Kingdom? What will be the consequences for companies exporting products to the United Kingdom?
    During the transition period, EU provisions will also continue to apply to the business activities of German companies. German firms can export their products to the United Kingdom and import goods from there just like before.
  • What will change for companies that are located or have subsidiaries in the United Kingdom?
    Subsidiaries of German companies can, for the time being, do business in the United Kingdom according to the same European rules as before.
  • Can UK investors still rely on the free movement of capital?
    During the transition period, the principle of the free movement of capital continues to apply; this means that payments to and from the United Kingdom continue to be possible (e.g. SEPA transfers). As the United Kingdom is not a member of the eurozone, the exchange from euro to sterling is nothing new. German businesses can still invest in the United Kingdom and vice versa. Investment that has already been made is not affected by the transition period.

The long-term economic impact of the United Kingdom's withdrawal from the EU on German companies will largely depend on what the future relationship between the United Kingdom and the EU looks like.

A study by the Ifo-Institute commissioned by the Economic Affairs Ministry is examining a total of eight different scenarios of what future relations between the EU and the United Kingdom could look like, and their impact on the German and European economy. The findings of the study show that Brexit will have economic repercussions for the EU Member States and especially for the United Kingdom. However, even in the most unfavourable scenario, the overall impact of Brexit on the EU economy and the German economy in particular, ought to be manageable. You can find the study (in German) here.

The future relationship with the United Kingdom following the end of the transition period

The EU and the UK will make intensive use of the transition period to engage in negotiations on the future relations between the EU and the UK. The EU’s goal is to maintain the closest possible partnership with the UK.