On 29 October 2019, the European Council adopted a decision ("Decision"), with the agreement of the UK, to extend the period under Article 50(3) of the Treaty on European Union in the context of the UK's intention to withdraw from the EU.
The extension will last until 31 January 2020 to allow more time for the ratification of the Withdrawal Agreement. Our Newsletter - December 2018 discussed the Withdrawal Agreement as well as the Political Declaration with respect to the EU's future relationship with the UK. The Decision further sets out that certain revisions to the Withdrawal Agreement, notably regarding the Irish backstop solution as well as to the Political Declaration have been endorsed by the European Council.
For the duration of the extension, the UK remains a Member State of the EU with all the rights and obligations set out in the treaties and under EU law.
If no Withdrawal Agreement is signed by 31 January 2020 and no further extension is granted, the UK will leave the European Union in an uncoordinated manner on 1 February 2020 ("Hard Brexit"), a scenario which seems however less likely to occur in light of the recent general elections in the UK.
Luxembourg financial sector governance measures have been adapted to reflect the new 31 January 2020 deadline1.
In conclusions adopted on 13 December 2019, the European Council has reiterated its commitment to an orderly UK withdrawal based on the Withdrawal Agreement as well as its desire to establish as close as possible a future relationship with the UK respecting previously agreed texts. It invited the Commission to work on a draft comprehensive negotiating mandate in this respect.
1. See our articles in the Asset management and investment funds section (" Brexit: New deadlines for CSSF notifications") and the Corporate, banking and finance section (" Brexit: CSSF communications updated") of this Newsletter.
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