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17 Oct 2019

Brexit - Revised Withdrawal Agreement/ revised Political Declaration issued

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After a week of intense negotiation, Jean Claude Juncker announced earlier today “a fair and balanced deal" between the EU and the UK which he said provided certainty, protected citizens and protected the single market, without introducing a hard border on the island of Ireland.

Boris Johnson recognised and praised the work on both sides stating that the deal was “very good" for both the EU and the UK, that it would enable the UK to enter free trade deals while providing a solution for Northern Ireland and the Republic of Ireland, and that the UK would be free to make its own decisions about its laws, money and borders.

Both men, on first name terms at the press conference shortly after 1pm London time today, encouraged the parliaments they each represent, the EU Parliament and the UK Parliament in Westminster, to support the deal, so that the EU and the UK can swiftly move on to focussing on their future relationship. Negotiations on the basis of the Political Declaration on the future relationship, and the parallel bilateral agreements to be negotiated and entered into, they said, will start on 3 November 2019.

Most of the draft Withdrawal Agreement between the UK and the EU prepared by Theresa May, which was rejected three times by the House of Commons, still stands, other than a revised Protocol on Ireland/Northern Ireland. Yet a large amount of that Protocol, consisting of 19 articles and 6 annexes, is also the same or very similar to the old one! 

Withdrawal Agreement – revised Protocol on Ireland/Northern Ireland (64 pages) 

The Withdrawal Agreement, with the new Protocol, needs to have the approval of enough Conservative, Labour and DUP MPs, and possibly including the 21 MPs who lost the whip, in order to be voted into law. Recently concerns have been focussed on trade in and around the current border between the Republic of Ireland and Northern Ireland. The emphasis and spirit of the Protocol is on cooperation and to maintain peace in the region, with as little impact as possible on the everyday lives of communities in the Republic of Ireland and Northern Ireland. For example, there will be no physical border, installations, border checks or controls.

Northern Ireland will remain part of the UK and part of the UK's internal market. It will remain part of the customs territory of the United Kingdom and will benefit from UK's own international trade policy. The Common Travel Area between the UK and Ireland for UK and Irish citizens will continue.

The devil is in the detail in terms of how movement of goods and customs will work. No customs duties will apply to goods moving from anywhere in the UK to Northern Ireland. However, if the goods are actually intended for the EU, i.e. transiting Northern Ireland, then they will become subject to EU rules. Likewise, for goods transiting via Northern Ireland from the EU to the UK, UK rules would apply.  Identifying the 'risk of subsequently being moved into the Union' will depend on whether those goods would be subject to commercial 'processing', meaning alteration or transformation. The criteria necessary to help establish working practices will take into account: (1) the final destination and use; (2) the nature and value of the goods; (3) the nature of the movement and the incentive for undeclared onward movement into the EU, and will be set out by the end of the transition period, currently 31 December 2020 by the Joint Committee set up between the EU and the UK. This is effectively the customs border in the Irish Sea discussed in the press, so the details of this still have to be worked out in practice.  So EU customs processes will apply to goods into Northern Ireland intended to reach the EU. There are some technical provisions in the Protocol on rules of origin and labelling, with EU standards being applicable on certain goods, and certification needed for goods on the island of Ireland. The VAT position could be different for goods in Northern Ireland, with the UK imposing EU rules with some exceptions in relation to VAT and excise duties.

That said, all of these provisions are couched in language of cooperation and compromise, with reference to 'constant review' and taking into account the 'special circumstances' of Northern Ireland.

There will be a Specialised Committee established to facilitate implementation of the Protocol, examine proposals and make recommendations on the functioning of the Protocol.

The new provision on 'Democratic consent in Northern Ireland' (article 18), will also give the political players a chance to have their say. But timing is everything. So, if the Withdrawal Agreement is passed and is signed, there will be a transitional period until 31 December 2020. Then, four year later (in fact, 2 months before the end of that period, on 31 October 2024) the Northern Irish authorities will have the opportunity to vote on whether to continue with the arrangement or not. If they vote against it, it will not cease to have effect until two years later - likely to be at the end of October 2026. Should they vote to continue with it, it will be another four years before the next review – likely to be 2028 – which, in the event of a negative result, would mean the arrangements ceasing to have effect in 2030. If approved, then it would be another eight years before they would have another opportunity to vote, which would mean the arrangement being in place until 2036.  By then, clearly many of the main political players will long since have been out of the picture, politically speaking.

All of this, of course, assumes that the Northern Ireland power-sharing assembly at Stormont, which is currently suspended, can get back up and running. The Protocol takes into account sectarian rivalries in the region as it requires cross-community support with weighted majority voting and with support from both the unionist and nationalist delegations, without naming the parties or the personalities involved.

Political Declaration on the Future Relationship between the UK and the EU (27 pages)

Trade - While trade had been a big sticking point for the Protocol and what tariffs could apply has been vexing business for some time now, the EU and UK state in the Declaration that “prosperity and security are enhanced by embracing free and fair trade". The parties plan to have an ambitious trading relationship based on a Free Trade Agreement between the UK and the EU. This would ensure no tariffs, fees, charges or quantitative restrictions across all sectors. Modern rules of origin and customs arrangements are to be put in place, with a programme of administrative cooperation and mutual recognition of trusted traders.  These techniques will be key in ensuring there is no hard border on the island of Ireland.

Financial services – By committing to preserving financial stability and market integrity, the parties agree to close cooperation. Equivalence frameworks will be put in place on regulatory and supervisory regimes and the parties will start assessing these as soon as possible so that they are in place by the end of June 2020, i.e. before the end of the transition period.

Rail – The UK and EU will enter into bilateral agreements to keep cross-border rail services running between Belfast and Dublin and through the Channel Tunnel from the UK into the EU.

Aviation – The intention is to keep passenger and cargo air connectivity in place through a Comprehensive Air Transport Agreement and cooperation between the UK's Civil Aviation Authority and the EASA, on safety, security and air traffic management.

Maritime – Similarly, the parties want to keep maritime transport on the move with arrangements on international maritime services and cooperation between the UK Maritime and Coastguard Agency and the European Maritime Safety Agency.

People - Free movement of people would end. However this would not prevent mobility schemes being put in place with full reciprocity on a non-discriminatory basis, to allow visa-free short term visits, as well as entry and stay for study, research, training and youth exchange and the continuation of the Common Travel Area under a new agreement between the UK and Ireland.

Fisheries – On fisheries the plan would be for the UK and EU to ratify new fisheries agreements by 1 July 2020 – i.e. before the end of the transitional period. This is likely to get some media attention in the next few months!

Other areas covered by the Declaration all seem to have their basis in cooperation, sharing of some information, equivalence and respect, albeit that this would be done under separate bilateral arrangements between the UK and the EU which have yet to be discussed and finalised. These cover: e.g. anti-money laundering and counter-terrorism, nuclear energy, electricity and gas and carbon pricing data exchange, judicial cooperation in criminal matters, space, cyberspace and illegal migration. Recognition and respect for the involvement of the UK and the EU in global and international affairs and cooperation is clear in the Declaration, with the parties intending to continue involvement albeit possibly under a different banner but with a common objective.

Jean Claude Juncker announced that meetings and negotiations on this future relationship are to start on 3 November 2019. This is just three days after 'exit day', if indeed 'exit day' takes place on 31 October 2019, which will depend on whether the Withdrawal Agreement (originally published in November 2018, and now in October 2019 published with a new protocol) proves to be acceptable to the EU Parliament and the UK Parliament, and is then signed and ratified by the UK and the EU.

Jacqueline Cook, Senior professional support lawyer , 17 October 2019

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Jacqueline Cook

Jacqueline Cook
Senior professional support lawyer

T:  +44 20 7809 2051 M:  +44 7585 303 636 Email Jacqueline | Vcard Office:  London

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