Making heads or tails of the Draft Withdrawal Agreement
Published: 15 Nov 2018

The UK has finally "agreed" on and published their Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community.

This details the terms reached by the European Commission and UK negotiators on the United Kingdom's withdrawal from the European Union and the European Atomic Energy Community.

The Agreement covers all elements of the UK's withdrawal from the EU, including:

  • a transition period;
  • citizen's rights;
  • the financial settlement;
  • governance;
  • terms of a legally operational backstop to ensure no hard border between Ireland and Northern Ireland;
  • Protocols on Cyprus and Gibraltar,

and a range of other separation issues including goods placed on the European market.

Transition period

The Agreement provides for a transition period until 31 December 2020. During this proposed period:

  • EU law will continue to apply to the UK as if it were an EU Member State;
  • the UK will participate in the EU Customs Union and the Single Market, with all four freedoms, and Union Policies;
  • all EU regulatory, budgetary, judiciary and enforcement instruments will apply, meaning the Court of Justice of the European Union (CJEU) will have competence in the UK.

It is intended that this transition period will provide:

  • the UK and EU with time to negotiate a future relationship; and
  • national administrations and businesses with time to prepare for a new relationship.

During this period, the UK can't be bound by any new trade agreements on its own in areas of EU exclusive competence, unless authorised by the EU to do so.

On the withdrawal date, 11pm on 29 March 2019, the UK will have technically left the EU and so will no longer be a part of EU decision making from that point. This means the UK will not be represented in EU institutions, agencies and bodies, and will no longer participate in meetings of Member State groups, subject to exceptions.

During the transition period the UK can't act as a rapporteur for European authorities or Member States, this includes activities such as conducting a risk assessment for the European Chemicals Agency (ECHA) or assessing the safety of a medicine.

An area of contention in particular in UK Parliament was around fisheries. Until the transition period ends, the UK will be bound by decisions on fishing opportunities. However the UK will be consulted on its fishing opportunities.

Extension of a transition period

There is the possibility to extend the transition period providing that this is done by mutual UK and EU agreement and decided by the Joint Committee by 1 July 2020.

The UK may request additional time to ensure a future agreement is made with the EU.

International agreements

During the transition period, the UK will be bound by obligations from all EU international agreements, including multilateral mixed agreements.

After the Withdrawal Agreement is signed the EU will notify other parties to international agreements of the consequences of the UK's withdrawal and will cover all international agreements. 

Common provisions

The provisions of the Withdrawal Agreement must have the same legal effects in the UK as in the EU and its Member States.

Until the end of the transition period when the UK leaves the EU, UK courts must abide by the principle of consistent interpretation with the CJEU case law. After this date UK courts should still pay regard to CJEU case law.

Specifically, the Agreement requires the UK to ensure compliance with the common provisions through domestic legislation, with the UK judicial and administrative authorities disapplying inconsistent or incompatible national law. 

Any reference to European law in the Withdrawal Agreement includes amendments made to it up until the last day of the transition period.

Unless specifically agreed otherwise, the UK will be disconnected from all EU networks and databases at the end of the transition period.

Citizen's rights

The Agreement safeguards the right to stay and continue their current activities for over 3 million EU citizens in the UK, and over 1 million UK nationals in EU countries.

It enables both EU citizens and UK nationals, as well as their respective family members, to continue to exercise their rights derived from EU law in each other's territories, for the rest of their lives, where those rights are based on life choices made before the end of the transition period.

EU and UK citizens, as well as their respective family members can continue to live, work or study as they currently do under the same substantive conditions as under EU law, benefiting in full from the application of the prohibition of any discrimination on grounds of nationality and of the right to equal treatment compared to host state nationals.

EU free movement will apply until the end of the transition period, after this EU and UK citizens will be able to remain and work or study in the UK or EU state.

Goods placed on the market

Goods lawfully placed on the market in the EU or the UK before the end of the transition period may continue to freely circulate in and between these two markets, until they reach their end-users, without any need for product modifications or re-labelling. This means that goods that will still be in the distribution chain at the end of the transition period can reach their end-users in the EU or the UK without having to comply with any additional product requirements.

However the movement of live animals and animal products between the EU market and the UK's market will, as from the end of the transition period, be subject to the applicable rules of the Parties on imports and sanitary controls at the border, regardless of whether they were placed on the market before the end of the transition period.

Euratom

The UK withdraws from Euratom and accepts sole responsibility for continued performance of nuclear safeguards and its international commitment to a future regime that provides coverage and effectiveness equivalent to existing Euratom arrangements. 

Euratom will transfer ownership of equipment and other property in the UK related to safeguards for which it will be compensated at book value to the UK.

This also means Euratom's international agreements will no longer apply to the UK and that the UK needs to engage with international partners in that context.

Ongoing judicial procedures

The CJEU will remain competent for judicial procedures concerning the UK registered at the CJEU before the end of the transition period, and those procedures will continue until a final binding judgment is given in accordance with EU rules. All stages of proceedings are concerned, including appeals or referrals back to the General Court. This allows for pending cases to reach completion in an orderly way.

Within four years from the end of the transition period, the Commission may bring before the CJEU new infringement cases against the UK, concerning breaches of Union law which occurred before the end of the transition period.

Financial settlement

The UK will honour its share of financing all the obligations undertaken while it was a member of the Union, in relation to the EU budget, the European Investment Bank, the European Central Bank, the Facility for Refugees in Turkey, EU Trust Funds, Council agencies and also the European Development Fund.

Environmental protection

The Agreement states a commitment to non-regression in the level of environmental protection in both the EU and the UK. It states that the UK will continue to respect the:

  • precautionary principle;
  • principle that preventive action should be taken;
  • principle that environmental damage should as a priority be rectified at source; and
  • polluter pays principle,

in environmental legislation.

The Joint Committee will adopt decisions that will apply from the end of the transition period and establish minimum commitments for:

  • the reduction of national emissions of certain atmospheric pollutants;
  • the maximum sulphur content of marine fuels which may be used in territorial seas including in the North Sea, Baltic Sea area and in EU and UK ports;
  • best available techniques including emission limit values, in relation to industrial emissions.

Both the UK and the EU:

  • must take the necessary measures to meet their respective commitments to international agreements to address climate change;
  • reaffirm their commitment to implement the multilateral agreements they are are party to.

The UK must implement a system of carbon pricing at least the same effectiveness and scope as that set out in Directive 2003/87/EC on scheme for greenhouse gas emission allowance trading within the Community (EU Emissions Trading Scheme).

An independent body in the UK must implement a transparent system to ensure effective domestic monitoring, reporting and oversight of its environmental protection obligations. This body must have powers to conduct inquiries concerning alleged breaches by public bodies and UK authorities.

Labour and social standards

The Agreement states a commitment to the non-regression of labour and social standards in both the EU and the UK. This includes ensuring:

  • fundamental rights at work;
  • occupational health and safety;
  • fair working conditions;
  • employment standards;
  • information and consultation rights at company level,

do not reduce below the common standards at the EU and UK level.

Protocol on Ireland and Northern Ireland

One of the key issues in withdrawal negotiations has been the prevention of a hard border between Ireland and Northern Ireland and the so-called 'backstop'.

If an agreement on the future EU-UK relationship is not applicable by 31 December 2020, the EU and the UK have agreed that a backstop solution will apply until such a time as a subsequent agreement is in place.

In a backstop scenario, a single EU-UK customs territory will be established from the end of the transition period until the future relationship becomes applicable. Northern Ireland will therefore remain part of the same customs territory as the rest of the UK with no tariffs, quotas, or checks on rules of origin between Northern Ireland and the rest of the UK.

Negotiations on the future EU-UK relationship will only be conducted during the transition period, consequently this legally operational backstop guarantees that no hard border returns – whatever the circumstances.

What next?

It is up to the President of the European Council to decide whether and when to convene a meeting of the 27 Heads of State or Government. This has currently been announced by Donald Tusk for 25 November 2018. It will be up to the European Council to endorse the withdrawal agreement and the joint political declaration on the framework of the future relationship.

Once the European Council endorse the Withdrawal Agreement, and before it can enter into force, it needs to be ratified by the EU and the UK. For the EU, this means the European Council must authorise the signature, before sending it to the European Parliament for its consent.

The United Kingdom must ratify the Agreement according to its own constitutional arrangements. This will mean any Agreement will need to pass a Parliamentary vote.

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