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UK starts the process of ending 40 years of EU control — Here’s what you need to know

  • Leaving the European Union means that all the European laws, which apply directly to the U.K., including business regulation, will no longer be applicable
  • The repeal bill is already raising controversies between the several political parties
  • The bill will be debated in the autumn and it needs to be passed by Parliament, if not it will not become law and the U.K. will be left in a "legal chaos"
Daniel Leal-Olivas | AFP | Getty Images

The U.K. government has published a draft bill that will end 40-years of European Union ties – the so-called Repeal Bill.

This is a key step to take the U.K. out of the EU and avoid legal chaos. But it's certain to raise much political controversy.

The publication of the bill takes place 24 hours after the EU's chief negotiator raised questions about London's readiness to negotiate. Michel Barnier asked the U.K. government to clarify its position on key areas such as the exit bill and the border with Ireland ahead of the second round of talks due Monday. Instead, the U.K. government has published three papers on judicial proceedings, nuclear materials and privileges.

CNBC takes a look at what's seen as the most comprehensive rewriting of the U.K.'s laws ever.

Why is it important?

Leaving the European Union means that all the European laws, which apply directly to the U.K., including business regulation, will no longer be applicable. As a result, the U.K. government needs to present new domestic laws that will avoid a legal vacuum on the day that the country exits the bloc.

"Parliament must unpick over 40 years of integration between the U.K. and the EU legal systems and ensure no gaps are left in the process," Peter Watts, Partner at Hogan Lovells International, told CNBC via email.

What are the biggest challenges?

"The most difficult practical, as opposed to political, issue is the sheer volume and detail of the rules and making them work in a purely domestic U.K. legal context," Watts said.

"But this will itself cause political issues as in many cases there isn't a simple way of just 'copying across' the rules – decisions need to be taken about how they work if the U.K. is no longer part of the EU. This is an area in which the 'devil is in the detail'," he added.

Even before being debated, the repeal bill is already raising controversies between the several political parties. For instance, the Labour Party wants the U.K. government to drop its commitment to exclude the jurisdiction of the European Court of Justice.

The Liberal Democrats are expecting a "legislative war," the Financial Times reported.

"It is not difficult to see how the Repeal Bill could become a political football," Watts told CNBC, mentioning the issue of powers to devolved parliaments in Scotland, Wales and Northern Ireland as an example.

What happens to the Repeal Bill if there's no agreement in parliament?

The bill will be debated in the autumn and it needs to be passed by Parliament, if not it will not become law and the U.K. will be left in a "legal chaos".

"Failure to enact the Repeal Bill in some form would be highly disruptive and destabilising for the UK. For this reason, it seems likely that, however controversial, some form of Repeal Bill will pass through Parliament. The question is: how much will it resemble the draft Bill being published on Thursday?," Watts wondered.

What happens to the repeal bill if there's another general election?

Many political analysts and even market strategists forecast a new general election in the U.K. before the country concludes Brexit negotiations.

However, a new ballot should not impact the Repeal Bill as long as the country sticks to the outcome of the vote.

"If the U.K. is going to withdraw from the EU in an orderly manner, the Repeal Bill, or equivalent, will be necessary to provide for the terms of the transition from a domestic legal perspective and to provide the necessary certainty for U.K. citizens and businesses," Watts explained.

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