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The ratification of the Withdrawal Agreement on January 31 marked the beginning of the United Kingdom’s formal separation from the European Union. However, the real challenges lie ahead as the UK determines its future trade relations with the EU’s single market. Despite the apprehensions of businesses in both the UK and across the Channel, the risk of a “hard Brexit” persists. This scenario, where the UK and EU fail to secure a trade agreement, is increasingly likely, especially since UK Prime Minister Boris Johnson has legislated that the UK will exit the EU after the 11-month transition period ends on New Year’s Eve, deal or no deal. This exit means that all EU laws and regulations will no longer apply.
With no continued alignment with EU regulations, the UK will be classified as a “third country” in regulatory terms across various sectors. This status will likely place a significant burden on companies to prove compliance with existing regulations, and potentially adapt to new UK-specific regulations developed post-Brexit.