The United Kingdom left the European Union on 1 February 2020, after both sides had successfully concluded a Withdrawal Agreement which facilitates an orderly departure.
This Agreement includes chapters on Citizens' Rights, the Financial Settlement, other separation issues, and the Protocol on Northern Ireland that currently apply and will continue to do so. It also provides for a transition period – a period intended to give time for national administrations, businesses, and citizens to prepare for the changes that will follow as of 1 January 2021.
In other words, following the end of the transition period, the UK will be outside the EU's Single Market and Customs Union, and will no longer be bound by EU law.
This will significantly change the way the EU and the UK engage. In this regard, negotiations remain ongoing between both parties for an “ambitious, broad, deep and flexible partnership across trade and economic cooperation with a comprehensive and balanced Free Trade Agreement (FTA) at its core".
Given the limited progress recorded thus far, the Government of Malta has decided to intensify its readiness work, including for a situation where an agreement governing the future relationship between the EU and the UK is not reached and applicable by 1 January 2021. While Malta still supports the closest-possible relationship between the EU and UK, prudence dictates that Government readies its planning on this basis.
With less than two months until the end of transition period, it is vital that Government, businesses, and citizens understand the changes that will arise, and take immediate steps to mitigate the risks. The two scenarios - i.e. that of an agreement being reached, or failure to do so - will raise many, but not necessarily all, of the risks which arose in the No Deal planning undertaken last year, ahead of the Withdrawal Agreement being concluded.
Every time a Maltese company or individual imports from, or exports to, the United Kingdom they will need to (at least) complete a customs declaration. If the EU and UK fail to reach an agreement, we will be faced with a scenario where, as of 1 January 2021, the EU and UK will trade on the basis of WTO rules. This outcome will also see the introduction of tariffs and quotas on trade in both directions.
It is also important to note that a range of changes will take place regardless of the outcome of negotiations, and it is vital that everyone is adequately prepared for these changes now. Of these, the most significant is that from 1 January 2021, the UK will no longer apply the rules of the Single Market and Customs Union. This means that any business, regardless of size, which moves goods from, to, or through, the United Kingdom will be subject to a range of new customs formalities and other regulatory requirements.
In the coming weeks, Government will carry this work forward in two distinct but overlapping streams:
This readiness work for the end of the transition is also different from earlier no-deal preparations, as it will require planning for both immediate challenges, but also long-term, permanent changes to current arrangements. It is also expected that EU contingencies will be limited this time round.
Nonetheless, the scale and interconnectedness of the EU-UK relationship mean that we cannot entirely eliminate the possibility of disruptions, despite the work that has been carried out. Time is also of the essence, and it is not feasible to await the outcome of the negotiations before acting. It is clear that no matter what, the status quo cannot be maintained.
Moving forward, Government will continue to develop and refine its readiness efforts accordingly. This work will be underpinned by a communications and outreach programme. Government recognises that preparing for these changes is extremely challenging for many businesses, severely affected by the Covid-19 pandemic as they already are, and will try to support them as much as possible over the coming months.
Government remains grateful for the ongoing engagement with stakeholders and constituted bodies, and will continue to work closely with its partners in addressing these shared objectives.
The Government issued a Readiness Action Plan which provides information and recommendations on how citizens and businesses should prepare themselves to mitigate the impact that is expected on several sectors. This document can be downloaded here.
European Commission Readiness Communication:
Sectoral Stakeholder notices:
Maltese citizens in the UK:
For more information on EU citizens' rights:
To apply for the EU Settlement Scheme:
Information for business owners in the UK:
UK nationals in Malta: