Here we'll be bringing you the latest Brexit developments in relation to the ongoing negotiations between the UK Government and the EU Commission. Our Brexit policy page highlights all of our latest briefings, responses and position papers on Brexit-related legislation and parliamentary inquiries. We've also created a Brexit Q&A and will continue to update this throughout the negotiations and during the implementation of the withdrawal agreement.
We'll also be highlighting the latest publications from relevant and reliable sources of interest. For any further information please contact our Head of International, Katie Hay, at firstname.lastname@example.org or 0131 476 8351.
The Council of the EU published draft guidelines for a post-Brexit trade deal with the UK. The guidelines will now be discussed by the EU27 with a final text to be adopted at the meeting of the European Council on 23 March. The guidelines will inform the EU's approach to the second phase of negotiations with the UK on the future EU-UK relationship.
Some of the main points from the draft include:
- Agreement on the Withdrawal Agreement (including on Northern Ireland) is required before negotiations on trade can be pushed forward.
- The UK Government's red lines limit the type of deal the EU can offer. In return for a limited FTA the UK will have to commit to the EU's level playing field (e.g. state aid and competition rules). The EU would also like a close relationship on security, foreign and defence policy.
- The guidelines rebut the UK Government's stated desire to participate in some EU agencies. The role of the CJEU will also have to be fully respected in any final trade deal.
The College of Commissioners adopted a first draft of the legal text of the Withdrawal Agreement. The draft text sets out what, in the Commission’s view, has been agreed between the EU and UK to date.
This draft has currently only been endorsed by the Commission. The 27 member states will now examine and, if necessary amend, the text, before it is communicated officially to the UK Government. The European Parliament will also examine the text to ensure that it is alignment with its position on withdrawal negotiations. The text itself is 120 pages long and includes chapters on Northern Ireland, citizens’ rights, the financial settlement and transition. It was confirmed that numerous issues for orderly withdrawal, such as Intellectual Property and Public Procurement which are both included in the text, are simply a statement of the EU position as they still await a proposal for a UK position. Negotiations on such subjects have thus not started.
It has been agreed between the parties that they will meet for a new negotiating round between 5-9 March inclusive.
In his speech following the release of the text, Michel Barnier emphasised that time is of the essence and that (in order to ensure time for agreement and ratification), negotiations on a withdrawal agreement would have to be concluded by Autumn 2018, though extra weeks would be allowed if necessary for negotiations.
Provisions in acquired rights in the withdrawal agreement are more limited in scope than was anticipated. In particular, the acquired rights of residency apply only in the member state concerned and does not grant wider free movement rights to UK citizens (Article 32). This has not been countered by a UK position to date and currently represents a solely ‘commission based’ view.
A protocol on Northern Ireland has been included in the text. This sets out the Commission’s view on the meaning of the term “full regulatory alignment” as part of the fall-back plan that was agreed between the EU and UK in December with the intention of avoiding a hard border on the island of Ireland. If unchanged, the protocol would apply from the end of the transition period (if applicable).
The Commission proposes that Northern Ireland would remain under the EU’s customs union and within certain parts of the single market (including customs union codes, freedom of movement of goods regulation, phytosanitary standards for plants and electricity market rules). It would need to follow rules enforced by EU institutions and judges. This would result, in all likelihood, in customs checks being carried out between Northern Ireland and Great Britain instead and would mean that NI would fall under a distinct legal order, being called a “common regulatory area”.
The DUP has already stated that it would reject such a solution.
The fall-back plan can be avoided if:
- a solution is found in the terms of the future EU-UK trade agreement (something the EU sees as impossible if the UK Government insists on its red lines of leaving the customs union and the single market); or
- technical solutions are found to mitigate the effect of a hard border. This option is not seen as a serious one in Brussels, in particular given the fact that the UK is yet to propose any specific solution.
Mr Barnier was at pains to emphasise point 2. above and the UK’s role in providing a solution (which the EU would take into account), but this has not yet been received. He emphasised his pragmatism and confirmed that an operational solution was necessary though there was no negotiating the two big realities of the EU: (i) the single market; and (ii) the customs union.
The language on transition was published by the Commission in early February and remains unchanged in this draft. Negotiations between the EU and UK on transition are on-going, with a political agreement expected before the end of March.
The provisions ensure that the EU acquis continues to apply to the UK during the transition period, whilst the UK cannot participate in enhanced cooperation or participate in the work of any bodies. Technical discussions will continue on the divergences in opinion between the UK and EU which currently include:
- Citizens’ rights and the UK’s proposal of different treatment of EU citizens entering the UK before and during the transition period;
- The application of EU rules during the period of March 2019 to the end of transition, whereby the UK has asked to be able to oppose EU rules brought in during transition.
It is worth recalling that the entire Withdrawal Agreement, including the text on Northern Ireland, will need to be finalised by Autumn (October) 2018 to ensure that a transition period is guaranteed. The possibility of a cliff-edge Brexit in March 2019 cannot be ruled out until the entire text is agreed upon and Mr Barnier confirmed that pending negotiations, a transition period is not “a given”.
Role of the Court of Justice of the EU
The text largely reflects the agreement reached in December on citizens’ rights, with UK courts having the possibility to apply to the CJEU for a preliminary ruling up to 8 years after the end of the transition period. The text also sets out details on the new independent authority to be established to enforce the provisions of the agreement relating to citizens’ rights. The CJEU will retain sole jurisdiction over “separation provisions” (e.g. on goods/customs) and on the financial settlement.
The text sets out details of a Joint Committee to be established between the EU and UK. It will have a number of sub-committees on issues like citizens’ rights and Northern Ireland. While the CJEU will have ultimate jurisdiction over the terms of the agreement, the Committee will look to resolve disputes between the EU and UK at first instance.
The controversial punishment clause has been retained at Article 165. This would currently allow the EU to suspend access to parts of the internal market (to the UK) in case of a dispute during transition. Mr Barnier confirmed that, notwithstanding the future role of The CJEU, the court must play a role in the interpretation and implementation of the withdrawal agreement wherever it refers to EU law.
Lawyers / Legal Services
Whilst there are no specific provisions on financial services and legal services, Articles 62 and 63 of the draft agreement provide for the continuing application for the Rome and Brussels Regulations in respect of all agreements concluded before the end of the transition period. There are explicit provisions regarding continuing rights of audience for UK lawyers before the CJEU during the transition and in cases taken in the UK before the UK’s exit from the EU. The December agreement on professional qualifications features in the Commission’s texts, with specific reference to the Lawyers’ Directive. Article 26 states that existing rules apply regarding the “examination by a competent authority of their host State or State of work of any application for the recognition of professional qualifications” introduced before the end of transition.
Thanks are due to our colleagues in the Brussels Office for preparing this summary.
At its meeting on 15 December, the European Council ratified the agreement reached on Phase 1 of the negotiations and agreed a set of guidelines for Phase 2, which sets out details about the proposed transitional arrangements and the general framework for the future relationship between the EU and the UK.
On 11 December, the Prime Minister gave a statement to the House of Commons on the outcome of the negotiations.
Meanwhile, Stefaan De Rynck, a senior adviser to Michel Barnier spoke at a Chatham House event, giving a frank account of the main challenges still to be overcome as the UK and EU teams attempt to negotiate an orderly Brexit.
On 8 December, following 6 rounds of negotiations, the UK government and EU Commission finally reached agreement on Phase 1 of the Brexit negotiations. Provided the deal receives the approval of EU leaders when they meet at the European Council summit on 15 December, the negotiating teams will now be able to move on to Phase 2.
Phase 1 covered citizens' rights, the Irish border and the financial settlement and the following points (among others) were agreed:
- There will be "no hard border" between Northern Ireland and the Republic and the "constitutional and economic integrity of the United Kingdom" will be maintained
- EU citizens living in the UK and vice versa will have their rights to live, work and study protected. The agreement includes reunification rights for relatives who do not live in the UK to join them in their host country in the future
- Financial settlement - No specific figure is in the document but Downing Street says it will be between £35bn and £39bn, including budget contributions during a two-year "transition" period after March 2019
The joint UK-EU report can be accessed here. Paragraph 32 specifically deals with the legal profession and provides that decisions on recognition of qualifications granted to persons covered by the scope of the Withdrawal Agreement before the specified date in the host State under the Recognition of Professional Qualifications Directive (2005/36/EC) and Article 10 of Directive 98/5/EC (lawyers who gained admission to the host State profession and are allowed to practise under the host State title alongside their home State title) will be grandfathered. Recognition procedures under these Directives that are ongoing on the specified date, in respect of the persons covered, will be completed under Union law and will be grandfathered. In other words individuals who are in the process of requalifying in another Member State when the UK formally leaves the EU, whether by undergoing an examination process or by assimilation (having practised under his or her home title for 3+ years), will be able to complete the requalification process.
Outside the scope of the EU mandate for the first phase of the negotiations are:
- the continuing protection of rights for UK nationals covered by the Withdrawal Agreement who move after the specified date to take up residence in another Member State;
- professional qualifications: future recognition decisions, recognition of qualifications of non-residents
- recognition of licences and certificates that are currently recognised EU-wide
- lawyers practising under home title; and
- territorial scope of economic rights, in particular secondary establishment and cross-border provision of services
In other words (without expressing a view on the likelihood of any particular outcome) the above points are still to be negotiated.
Other judicial/administrative issues
- On cooperation in civil and commercial matters there is general agreement that: (a) EU rules on conflict of laws continue to apply to contracts before withdrawal date and non-contractual obligations where an event causing damage occurred before the withdrawal date; (b) EU law on jurisdiction should continue to apply to legal proceedings instituted before the withdrawal date; (c) EU law should continue to apply to the recognition and enforcement of judgments handed down before withdrawal; (d) Relevant pending judicial cooperation should be finalised.
- Questions remain over whether EU law should continue to apply to the recognition and enforcement of judgments handed down after withdrawal in proceedings ongoing on the withdrawal date. Disagreement persists over whether a choice of court clause concluded before withdrawal should trigger the application of EU law on recognition and enforcement of judgments in litigation after withdrawal.
- On police and judicial cooperation in criminal matters there is broad agreement that: all structured and formalised cooperation procedures ongoing on the withdrawal date that have passed a certain threshold still to be defined should be completed under EU law.
- On ongoing EU judicial procedures, it has been agreed between the negotiators that: the CJEU remains competent for UK judicial procedures with the UK as applicant or defendant and for preliminary references originating in the UK, registered at the CJEU on the date of withdrawal; and those procedures should continue through to a binding judgment.
- There is disagreement over the continued competence of the CJEU in relation to facts having arisen before the UK's withdrawal, the enforceability of the decisions of the CJEU after withdrawal and the possibility for the UK to intervene before the CJEU in the future.
The European Commission has now published a raft of stakeholder notices on a wide range of legislative and policy areas under the heading “Brexit Preparedness”. These can be accessed here. The same issues still apply, namely that the notices are factually correct if viewing the UK as a third country with no consideration of any influencing or mitigating outcomes (actual and potential). They have been published by the Commission under the guise of being advisory but they seem to assume that there is going to be no relationship whatsoever and refer to transitional arrangements only in passing.
Our Brexit Policy Working Group has taken the view that while omitting any reference to the potential impact of ongoing negotiations is not necessarily misleading, the omission of relevant international law provisions is. We have written to the Commission in these terms.
The European Commission Directorate-General for Justice and Consumers has published a third stakeholder notice on the impact of UK withdrawal in the field of data protection.
At its meeting on 15 December, the European Council agreed a set of guidelines for phase 2 of the Brexit negotiations, which sets out details about the proposed transitional arrangements and the general framework for the future relationship between the EU and the UK.
On 12 December, the EU Commission posted a Q&A clarifying the detail of the agreement reached on 8 December (see below) by the UK and EU negotiating parties.
In November 2017, DG Justice and Consumers published two stakeholder notices, one on the withdrawal of the UK and its impact on EU company law rules and one on the impact on EU rules in the field of civil justice and private international law.
Concerns have been raised about these notices. The Society’s Brexit Policy Working Group looked at these notices and took the view that they are generally accurate inasmuch as they outline what would happen in the event of no agreement but are intended to be read critically. They are pointing out the technical detail that shouldn’t be overlooked and should perhaps be viewed as a warning to the negotiating parties to work constructively to reach a compromise.