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Seyfarth Synopsis: Today, British Prime Minister Theresa May invoked Article 50, formally starting the two-year negotiation process for the United Kingdom to withdraw from the European Union.

The UK Government today notified the European Council President of the UK's intention to withdraw from the European Union, in accordance with Article 50 of the Lisbon Treaty. This formally kick-starts the two year negotiation process between the UK and the remaining 27 member states. In Prime Minister Theresa May's address to Parliament, she stated: "This is an historic moment from which there can be no turning back."

The UK and the EU now have a maximum of two years to negotiate the terms of exit for the UK, during which the UK Government also wants to explore its ongoing relationship and trade terms with the EU.  If no agreement has been reached by the end of the two year period, the UK relationship with the EU will become the same as that of any other country under the WTO rules, with no preferential terms, unless the European Council (comprised of the Heads of all Member States) agrees to extend the negotiations. Based on recent UK Government statements, there seems to be an increasing acceptance that terms for the ongoing relationship will not be finalized by the end of March 2019, and some form of transitional arrangement to continue free trade may be necessary. Europe has however indicated this would be for only an additional three years.

With respect to immigration, the Prime Minister confirmed the UK government's intention to maintain the common travel area with the Republic of Ireland and that there should be no return to a hard border with Northern Ireland. The UK will introduce measures to control immigration, continuing to attract the "brightest and the best" to work or study in Britain. The aim will be to manage the immigration process so that the system serves the national interest. Details of the new immigration regime will be decided during the two year negotiation process. In the interim, the existing free movement rights for EU citizens in the UK, and vice versa, will remain unchanged.

What Happens Next?

There are no immediate changes to the UK's laws or status in the EU, pending the outcome of the exit negotiations. The rights of EU citizens who currently live in the UK, and the rights of British citizens who reside in other EU countries, will be an early priority in the negotiations. However, as the future status of these citizens has not yet been guaranteed, we continue to recommend that all EU nationals currently living in the UK apply for a residence card to confirm their status.

Tomorrow, the UK Government will publish a White Paper confirming its plans to convert the existing EU laws into British law. Following exit from the EU, there may be changes to UK law to remove certain EU-derived protections and provide businesses with more flexibility, consistent with the UK Government's statement that the UK would try to lighten tax and regulation. Negotiations between the UK and EU teams are expected to begin in earnest in May, at which point we will have more detail of their positions on the key negotiating points.

Most immigration and employed-related issues remain uncertain and will be decided during the negotiation process. We will update clients as further details are announced.

Most immigration and employed-related issues remain uncertain and will be decided during the negotiation process. We will update clients as further details are announced.