This is an extract of our Chapter 9 Additional Brexit Implications For Uk Merger Control document, which we sell as part of our International Merger Control Notes collection written by the top tier of University Of Cambridge students.
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Chapter 9 - Additional Tips/Points
Brexit: implications for UK merger control
UK will not be part of the EU competition system after leaving EU.
This affects merger control as it is a one-stop shop provided by the EU Merger Regulation (EUMR).
The Competition and Markets Authority (CMA) will be allowed to investigate mergers with an EU dimension under the EU Merger Regulation.
Deal. UK & EU conclude a withdrawal agreement (WA) by exit day with the terms of the post-Brexit transition period. Once the UK has exited, formal negotiations on the future relationship between the EU and UK will start.
No deal. UK & EU fail to conclude any agreement by exit day. No framework for any future relationship is being established, and no implementation of a transition period.
Summary of key Brexit-related events to date for better understanding:
23.6.2016 - a simple majority (51.9%) of the UK public voted for leaving the EU.
29.3.2017 - a formal notice of the UK's intention to leave was given under Article 50(2) of TFEU. The Article 50 notice triggered the start of formal withdrawal negotiations between the UK gov and the European Commission (EC) as the EU negotiator. The default date of the UK's exit from the EU stated in the notice is two years after the notification i.e. 11.00pm (UK time) on 29.3.2019.
29.3.2019 - UK original intention to leave the EU but the European Council and UK gov agreed that the two-year Art. 50 period would be extended.
11.4.2019 - European Council and the UK gov agree to extend the Art. 50 period for a 2 time via a formal agreement. UK intended that it would leave the EU on either:
11.00 pm on the last day of the month in which the ratification procedures for the WA are completed.
11.00 pm on 31.10.2019 with no deal if neither of the above apply, and there is no third extension, and UK has not revoked its Article 50 notice.
19.10.2019 - House of Commons resolved to withhold approval of the revised WA and political declaration until implementing legislation (the Withdrawal
Agreement Bill) was passed, and the Prime Minister requested a third extension to the Art. 50 period.
29.10. 2019- European Council adopted a decision extending the Art. 50 period to 31.1.2020.
12.12. 2019 - Parliament was dissolved on 6.11.2019 and UK held a general election on 12.12.2019. Parliament returned on 17.12. 2019.
UK is expected to leave the EU at 11.00 pm (UK time) on 31.1.2020 (exit day):
If a WA was agreed at political level in October 2019 by exit day:
A European Union (Withdrawal Agreement) Act will implement the WA into UK law. A post-Brexit transition period will run from exit day until 31.12. 2020, during which time the UK will be treated as if it were still an EU member state, and most EU law will continue to apply to UK. Of course, the transition period could be extended (1 or 2 years), but only if the joint UK-EU
committee agrees to an extension before 11.00 pm (UK time) on
30.6.2020. (But the Conservative gov aims not to extend the transition period beyond 31.12.2020).
If UK and the EU do not conclude a WA by exit day (and there is no further extension of the Art. 50 period, and the Article 50 withdrawal notice is not revoked):
UK will leave the EU on exit day with no agreement to govern the terms of withdrawal, and no transition period. Provisions in the EUWA will retain most existing EU law in UK law after exit day by creating a new body of retained EU law, and UK would decide whether to reflect any post-exit developments in EU law in domestic law by revising that body of retained EU law. EU law will not flow into the UK legal system under the European
Communities Act 1972 (ECA 1972) and UK will not need to implement EU law in domestic law.
With /without a deal, once UK leaves EU, formal negotiations on the future UK-EU relationship can start under Art. 218 of the TFEU. If UK and EU agree a political declaration before withdrawal, this declaration will form the basis for their post-Brexit negotiations on the future relationship. If UK leaves with a WA and transition period, the future relationship would become effective at the end of the transition period to decrease disruption, as many aspects of a no-deal scenario would again arise if relevant future relationship agreements are not effective by the end of the transition period. Chapter 9
Withdrawal agreement: merger control provisions
Ongoing administrative procedures
Ongoing administrative procedures concerning compliance with EU law relating to competition in UK - EU institutions, bodies, offices and agencies would continue to be competent for administrative procedures that were initiated before the end of transition period (ends on 31.12.2020).
Merger control proceedings under EUMR would be "initiated" when one of the following happens:
A concentration of EU dimension has been notified to the EC according to Art. 1, 3 and 4 of the EUMR.
The time limit of 15 working days referred to in Art. 4(5) of the EUMR has expired without any member states having expressed its disagreement as regards merger parties' request to refer a concentration without EU dimension case to EC.
EC has decided/ is deemed to have decided, to examine the merger in accordance with Art. 22(3) of the EUMR (following a request by member state(s) that
EC examine a concentration without an EU dimension).
A list of all individual ongoing administrative procedures will be provided to UK within 3 months after the end of the transition period.
Decisions adopted by EU institutions before the end of the transition period, or adopted in the competition and merger procedures referred to in Art. 92 of the WA
after the end of the transition period, shall bind UK (Art. 95(1)). CJEU would have exclusive competence to review the legality of such decisions.
EC would continue (unless otherwise agreed between EC and the CMA) to be competent to monitor and enforce any commitments provided/remedies imposed in
UK relating to any proceedings conducted by EC under EUMR (Article 95(2)). EC would transfer the monitoring and enforcement of such commitments/ remedies in the UK to the CMA (only if EC and CMA agree).
Future UK-EU relationship: merger control aspects
Withdrawal agreement: general provisions
26.6.2018 - the European Union (Withdrawal) Act 2018 (EUWA) ends the supremacy of EU law in the UK and prepares the UK's legislative framework for withdrawal from the EU.
The objectives of the EUWA: to keep most EU law in UK law after UK leaves the EU by developing a new body of Retained EU law, with this snapshot being taken on exit day under a no-deal scenario.
14.11.2018 - the negotiators published a WA, agreed in its entirety at negotiators' level.
16.1.2019 - the House of Commons rejected the gov's approval motion concerning the WA and future relationship framework (political declaration). Without ratifying the WA, or another mechanism that would delay or annul the withdrawal process, UK is scheduled to withdraw on a "no deal" basis.
17.10.2019 - following agreement between EU and UK negotiators, EU27 leaders, the European Council endorsed a revised WA, specifically including a revised
Protocol on Ireland/Northern Ireland (the Protocol), and a revised political declaration on the future EU/UK relationship.
WA provides for a transition period ending on 31.12.2020. The primary aims of the transitional arrangements are to:
Manage the UK-EU relationship for a limited period after exit day, when the WA will come into force, until the end of the transition period (proposed to end on
31.12.2020 unless extended).
Make sure that most EU law continues to apply to the UK during the transition period enabling, eg, UK's continued participation in the customs union and single market during the transition period.
Most EU legislation would remain applicable in UK during the transition period. The combined effect of the EUWA, the WAB (if enacted) and the WA would be that
Brexit would come into force at the end of the transition period instead of on exit day.
All the usual EU supervisory, judiciary and enforcement mechanisms, including the jurisdiction of the Court of Justice of the European Union (CJEU), would continue to apply during the transition period.
European Council negotiating guidelines on framework for future relationship: merger control
23.3.2018 - European Council adopted the negotiating guidelines that opened discussions under Art. 50 in order to have an overall understanding on the framework for the future UK-EU relationship. The overall understanding was elaborated in the November 2018 political declaration accompanying and referred to in the WA.
The draft political declaration confirms that the future relationship should include provisions to ensure open and fair competition. The European Parliament also referred to a "level playing field".
The White Paper of 12.7.2018 proposed how the future UK -EU economic partnership might achieve those objectives, including co-operation arrangements and compatibility of competition decisions.
Government White Paper on future UK-EU relationship: merger control aspects 12 July 2018 - EU published a white paper:
confirmed that UK would maintaining its current antitrust prohibitions and the merger control system.
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