On November 25, 2018, Prime Minister Theresa May of the United Kingdom (“UK”) and the leaders of the member states of the European Union (“EU”) agreed to a deal that will govern the withdrawal of the UK from the EU (“Withdrawal Agreement”). The deal must still be ratified by the UK and European Parliaments.

On December 4, 2018, the UK’s House of Commons will begin five days of debate on the Withdrawal Agreement. The House of Commons is scheduled to vote on the agreement on December 11. If the UK Parliament approves the Withdrawal Agreement, the EU will then schedule a vote on the agreement prior to the day on which Brexit will occur, which is March 29, 2019.

The main provisions of the Withdrawal Agreement (which are also set forth in this document) are:

• Implementation Period: The implementation period will last until December 2020. This period may be extended for one or two years, if needed. During the implementation period, the UK will be able to participate in some meetings of EU bodies and agencies, when necessary or relevant for the UK. During this period, the UK will be able to negotiate and agree to international treaties, such as a trade agreement with the United States, as long as those treaties would come into force after the end of the implementation period.

• Citizenship rights: EU citizens who reside in the UK and UK citizens who reside in the EU will have a right to stay, work, and study in the UK or the EU, as long as they were lawfully resident in the UK or the EU before the end of the implementation period. If they remain a resident for five years, they will have a permanent right to reside in the UK or the EU, as the case may be.

• Dispute resolution between the UK and EU: During the implementation period, a Joint Committee and independent arbitrators will adjudicate disputes between the EU and UK, including disputes regarding non-compliance with the withdrawal agreement.

• Financial settlement: The UK will be required to fund its share of EU budget commitments through the 2019-2020 budgetary years, as well as certain additional commitments, such as pensions for EU officials. While the exact value will be determined at the end of 2020, the UK Government has given an estimate of £35 billion to £39 billion for the UK to settle its accounts with the EU.

• Irish Backstop: The Withdrawal Agreement includes a protocol that provides for a “backstop” plan if future trade talks failed to satisfactorily resolve the issue of a “hard border” between Northern Ireland and the Republic of Ireland and to maintain the viability of the Good Friday Peace Agreement. If this backstop is put into effect, the entirety of the UK would remain in the EU customs union, while Northern Ireland would remain under the jurisdiction of the European single market. The backstop would come into effect only if the framework for the future relationship between the EU and the UK was not ready by January 1, 2021 and the UK decides not to request an extension of the implementation period.

In addition to the Withdrawal Agreement, the UK and EU also negotiated a Political Declaration describing expected future relations between the UK and the EU. Unlike the Withdrawal Agreement, the Declaration is not a binding treaty. The Declaration sets out certain basic parameters to govern negotiations on the future framework of the relationship between the UK and EU, which will be finalized by the end of 2020. Among other things, the Declaration indicates that the UK and the EU desire to establish a free trade area between the EU and the UK, with no tariffs or quotas, in a single customs territory.

The announcement of the Withdrawal Agreement and the Political Declaration have been met with strong resistance in the UK. Members of the Prime Minister’s ruling coalition government and members of the political opposition have expressed opposition to the agreement, leaving uncertain the outcome of the vote on December 11, 2018. For example, the Democratic Unionist Party in Northern Ireland, the party currently supporting the Prime Minister’s Conservative Government, has indicated that its MPs will vote against the Withdrawal Agreement because of their opposition to the backstop provision. Despite this opposition, the UK Government has been steadfast in its position that, if the Withdrawal Agreement is defeated in the House of Commons on December 11, 2018, the legal default is that there will be a “hard Brexit.”

Others in the UK are still pushing the idea that the UK can choose to remain a full member of the EU. A group of Scottish politicians who are opposed to Brexit have filed a case with the European Court of Justice (“ECJ”) asking the ECJ to declare that UK can unilaterally rescind Brexit and remain a member of the European Union, whether or not the EU or its member states agree. The EU, concerned that this would call into question the certainty of EU membership, has taken the position that this approach is inconsistent with pertinent provisions of the Treaty on European Union. No date has been set for the ECJ’s decision, but the Court has said that it will decide this matter “quickly.”