Commentary on the Draft Withdrawal Agreement - Version of February 21, 2018

This post provides an updated analysis of the draft Brexit withdrawal agreement, taking into account the UK’s response to the EU Commission’s proposed text.

The withdrawal agreement, if successfully negotiated, will be the key legal framework for Brexit. However, it’s crucial to remember this agreement will be separate from future treaties governing the post-Brexit relationship between the UK and the EU. The current draft only addresses the transition period (or implementation period in UK terminology) and some common provisions. It’s important to highlight that the Commission’s proposal doesn’t yet represent the official stance of the Council.

This commentary will analyze each proposed article by examining the UK’s position, the context of the Commission’s proposal, and offer additional insights, including new comments underlined for clarity.

Beyond the transition period and common provisions, the withdrawal agreement will also need to address governance and dispute resolution, the financial settlement, citizens’ rights, the Irish border, and the UK’s departure from EU law.

Here’s a summary of the key differences between the UK and EU Commission’s positions:

• Treaty Amendments: The UK aims to exclude the application of new EU Treaty amendments to the UK.
• Transition Period End Date: The UK seeks flexibility regarding the transition period’s end date.
• Exclusion from EU Measures: The UK wants to be exempt from additional EU measures.
• Opt-in Power for JHA Measures: The UK desires greater authority to opt into Justice and Home Affairs (JHA) measures.
• Policing and Criminal Law Treaty: The UK wants to allow for an early replacement treaty on policing and criminal law.
• Consultation Rights: The UK seeks expanded consultation rights on new EU laws and international relations.
• Risk Assessments: The UK questions the necessity of preventing UK bodies from conducting risk assessments.
• International Treaties: The UK proposes a different method for handling existing international treaties.
• Becoming Bound by International Treaties: The UK wants greater power to become bound by new international treaties.
• Dispute Settlement: The UK seeks a revised approach to dispute settlement, including a good faith clause.
• Fisheries: The UK wants to establish fishing catches through a separate agreement with the EU instead of just being consulted.

It is important to note that the UK’s response doesn’t address the financial settlement, which the Commission proposes to cover within the Financial Provisions section of the withdrawal agreement. Additionally, the UK contests the EU27’s position that citizens’ acquired rights will continue to apply during the transition period. However, the UK’s response doesn’t explicitly mention this disagreement.

Part [X] - Common Provisions

Article [XA] - Definitions

The UK suggests placing this article within the Withdrawal Agreement section instead of Common Provisions and proposes a separate definition for “Union law”. It suggests defining “acts” through reference to various EU measures. The UK’s definition of “Treaties” would only encompass amendments made before Brexit. “Bilateral international agreements” would refer to treaties the EU entered into as a bloc. It also clarifies that Treaty Annexes, Protocols, etc., are included. Importantly, the UK’s proposal explicitly covers acts adopted during the transition/implementation period.

This text resembles an EU accession treaty but lacks explicit mention of the EU Charter of Rights. While not explicitly stated, the Commission’s draft doesn’t explicitly exclude post-Brexit Treaty amendments from applying to the UK, making the UK’s clarification significant.

Article [X+1] - Interpretation

The UK proposes incorporating this paragraph into the definitions article and adding a reference to the Commission. Additionally, the UK argues that its proposed definition clause covers the content of Paragraph 2.

If these provisions are included in the Common Provisions, their application would likely extend to the citizens’ rights and financial settlement parts of the agreement.

The UK government is particularly concerned about being bound by EU legislation enacted during the transition period without its input, even though the Commission’s proposal only applies this rule to amendments of existing laws that come into effect before the transition period ends. It’s unclear if brand new legislation is meant to be covered by point (iii) of the previous article. Additionally, the phrase “takes effect” lacks clarity: while Directives come into force immediately, their full legal impact is often delayed by up to two years. The UK’s proposed definitions clause offers a more straightforward solution.

Furthermore, the Commission’s proposals don’t reflect the agreement in the December joint report that future changes to the EU’s funding laws affecting the UK wouldn’t apply, such as potential changes to the UK rebate. However, the Commission intends to address the financial settlement in a separate section of the agreement, suggesting this issue might be addressed there.

Article [NN] - References to Member States

The UK accepts this clause with minor technical adjustments.

While the Treaties only grant full decision-making power to Member States within EU institutions, they don’t preclude consultations with non-Member States. For instance, the Schengen Agreement provides Norway and Iceland with consultation rights at the ministerial level. Expecting the UK to implement new EU law without even informal consultation appears unnecessarily punitive. This also contradicts the December joint report’s call for a joint decision-making process on incorporating future amendments to social security rules into the withdrawal agreement.

Part [X] - Transition Period

Article [X] - Transition Period

The UK prefers “implementation period” instead of “transition period” and wants the end date to be flexible rather than fixed, reflecting the uncertainty surrounding the UK’s post-Brexit readiness.

The Commission’s proposed end date aligns with the EU’s budget cycle. The UK’s desire for flexibility stems from uncertainty about its post-Brexit readiness, although its paper suggests a transition/implementation period of “around two years.” Providing for an indefinite extension within the withdrawal agreement itself raises legal questions about exceeding Article 50 TEU’s scope.

As it stands, the Commission’s proposal doesn’t allow for an extension of the transition period. Extending it after Brexit day would necessitate a new treaty based on legal grounds other than Article 50, requiring unanimous agreement and potentially ratification by national parliaments.

It’s worth noting that Article X+1(2) does allow for curtailing the transition period for foreign policy matters.

Article [X+1] - Scope of the transition

The UK agrees with the wording of the first sub-paragraph with the exception of the word “transition” and suggests this obligation applies reciprocally, binding the EU as well.

The UK proposes amending the first exclusion clause to encompass international agreements linked to the opt-out clauses and policing and criminal law measures it opted out of in 2014.

The UK would move the second exclusion clause to an Annex and add several other Treaty clauses.

The UK’s concern about the reciprocal application of obligations is valid. This clause should explicitly state both sides will continue applying relevant EU law to each other during the transition period.

The Commission’s proposal doesn’t include an opt-out from Treaty amendments, but the UK’s “definitions” clause addresses this. Interestingly, the text doesn’t exempt the UK from “permanent structured cooperation” in defense, despite the UK’s recent opt-out decision.

Sub-paragraph 1(a) exempts Treaty rules and legislation related to the European citizens’ initiative and participation in European Parliament and local elections. However, a transitional clause is needed to address the situation of EU27 citizens elected to local government in the UK and vice versa before Brexit day.

Logically, other EU citizenship provisions, like the “Ruiz Zambrano” case law, would continue to apply.

While most of the UK’s suggested additional exclusions align with the overall text, the EU27 might not agree with the UK’s proposed ability to opt into JHA measures it didn’t previously opt into. For consistency, the UK should also seek exclusion from Articles 7 and 48 TEU, which concern suspension and amendment.

The provision allowing for an early end to the transition period for foreign policy aligns with a previous statement by the Council. This would prevent the UK from being bound by foreign policy decisions it could have vetoed as a Member State and would also decouple defense and trade issues. A recent speech by the Prime Minister elaborated on this point.

Legally, it’s questionable whether the withdrawal agreement would actually prevent the UK and EU from signing treaties replacing these rules in other areas of EU law during the transition period.

The proposed paragraph ensuring EU law applies with the same legal effect in the UK as within the EU during the transition period aligns with the Council’s negotiation directives, specifically mentioning the direct effect and supremacy of EU law.

The UK generally agrees with the paragraph preventing its participation in new enhanced cooperation initiatives but suggests moving these measures to an Annex.

This clause is particularly relevant to the proposed financial transaction tax, which is subject to enhanced cooperation without UK involvement. As it stands, concerns about the UK somehow becoming bound by this tax during the transition period are unfounded. While there’s a risk of extraterritorial effects on the City of London, this risk would exist even if the UK remained a Member State, as it couldn’t veto an enhanced cooperation measure it wasn’t participating in.

The UK generally agrees with the paragraph addressing its continued participation in pre-existing JHA agreements, but with different drafting and the addition of the power to opt into international agreements not yet in force on Brexit day. However, the UK proposes three additional clauses on this issue: allowing it to opt into new measures with EU agreement and provisions for early removal of this issue from the withdrawal agreement. This approach aligns with a previous statement by the Council and a recent speech by the Prime Minister.

The Commission’s proposal allows the UK to opt into new JHA laws amending existing ones it’s already bound by. Given the UK has opted out of the “Dublin IV” proposal on asylum seekers, suggestions that it could be bound by it during the transition period are baseless.

The UK accepts the provision that generally, references to Member States in EU law will include the UK during the transition period, with a minor drafting change. It sees little value in the second sub-paragraph concerning sensitive information and suggests further discussion.

The Commission seems concerned about the UK sharing information with non-EU countries without authorization, while the UK doesn’t see the point of this concern.

Article [X+2] - Institutional arrangements

The UK accepts the provision stating it won’t participate in EU institutions during the transition period, along with a technical amendment to move it to an Annex.

It’s implicitly understood that the UK’s exclusion from EU institutions means its parliament wouldn’t need to be consulted on EU matters. However, it’s unclear what harm such consultations would cause or what legal basis prevents the EU from agreeing to them outside the formal framework of the Treaties.

The UK accepts the provision stating the Bank of England won’t be considered a national central bank for the purposes of certain EU laws during the transition period, with a technical amendment. The UK also seeks confirmation that all other references to central banks will still include it.

It’s logically consistent that the Bank of England wouldn’t hold the status of a national central bank in relation to the ECB given the UK’s exclusion from EU institutions.

The UK broadly agrees with the provision allowing for its participation in EU committees and expert groups during the transition period, but proposes several changes to make consultation more frequent and less restrictive.

As with the other provisions regarding institutional arrangements, it’s debatable whether such strict limitations on the UK’s consultative role are necessary or legally required.

The UK sees no value in the provision barring it from leading risk assessments and other similar procedures during the transition period and proposes further discussion.

It’s not inherently obvious that the UK’s exclusion from EU institutions automatically prevents it from leading such procedures. This appears to be an issue of EU substantive law, where the UK effectively remains a Member State during the transition, rather than EU institutional law, where it won’t.

Article [X+3] - Specific arrangements relating to the Union’s external action

The UK proposes changes to both paragraphs governing its involvement in international agreements during the transition period. Paragraph 1 would affirm the UK’s continued participation in existing international treaties. Paragraph 2 would grant the UK participation rights based on proposed amendments to the previous article. Both paragraphs would be limited to “bilateral agreements” negotiated by the UK as part of the EU.

The Commission’s text suggests the UK would remain bound to the EU under existing treaties with non-EU states during the transition period. This logically should apply reciprocally, and it would be clearer to state this directly. Consequently, individuals should still be able to rely on the direct effect of such treaties in the UK during the transition period.

However, the UK wouldn’t be obligated to enforce these treaties towards non-EU countries, nor could those countries directly invoke them against the UK. Given the potential impact on UK exports, it’s understandable why the UK is keen on replicating these treaties.

The UK’s proposed alternative would circumvent this, but its version would incorrectly bind non-EU countries – an untenable position under international law. This contradicts the UK government’s own technical note, which acknowledges non-EU countries would need to consent to the UK’s continued inclusion within the EU framework during the transition period.

The UK proposes deleting the paragraph requiring it to avoid actions harmful to the EU’s interests within international organizations during the transition period, arguing this obligation already applies.

This paragraph explicitly states an obligation that likely still applies implicitly due to existing EU Treaty provisions on sincere cooperation. Therefore, the UK’s proposed deletion makes sense. However, the UK would likely have more freedom to act once an early post-Brexit treaty on EU/UK security and defence cooperation or policing and criminal law comes into force.

The UK accepts the provision requiring EU authorization for it to become bound by new international agreements in areas of exclusive EU competence, with the addition of an exception for agreements continuing pre-Brexit rights and obligations.

The Commission’s draft limits the restriction to areas of “exclusive” EU competence, narrowing the constraints on the UK’s external actions. It’s important to note that the scope of exclusive EU competence is often debated and litigated. Some interpretations of the EU27’s position suggest a blanket ban on the UK signing treaties during the transition period, but this is inaccurate. The UK would be able to do so with authorization, and this limitation would only apply to areas of exclusive EU competence.

Also, the restriction applies only to the UK becoming “bound by” international treaties during the transition period, not to negotiating or signing them. It could be argued that such negotiations violate the principle of sincere cooperation, but the UK could counter that a treaty not applying until after the transition period couldn’t impact the EU’s interests.

The draft doesn’t specify the process for approving the UK becoming bound by treaties. However, a statement attached to the Council negotiation Directives indicates the Council would approve such agreements following standard Treaty procedures.

The UK’s proposal to waive authorization for agreements simply continuing pre-Brexit rights and obligations is reasonable. However, the EU27 might be concerned about a lack of consultation, allowing this clause to be used for more than just replicating the UK’s existing rights and obligations.

The UK proposes amending the paragraph addressing consultation on foreign policy matters during the transition period to make consultations mandatory and ongoing rather than case-by-case.

This paragraph acknowledges the UK’s significant foreign policy role, especially regarding sanctions. Losing its veto power over EU foreign policy during the transition period could theoretically bind the UK to using (or not using) its UN Security Council veto. Similar to other foreign policy provisions, the UK would likely have more freedom to act once an early post-Brexit treaty on EU/UK security and defence cooperation is in place. Given the importance of foreign and defense policy, the UK’s proposal for mandatory and broader consultation makes sense.

The UK proposes further discussion on the paragraph preventing it from leading civilian or military operations during the transition period.

Article [X+4] - Specific arrangements relating to Fisheries Policy

The UK proposes significant amendments to the provision addressing fishing opportunities during the transition period: adding “fixing and allocation of fishing opportunities,” removing the word “transitional,” changing the consultation mechanism to require agreement between the EU and UK before the decision-making process, and adding a provision for UK participation in international fisheries negotiations alongside the EU.

If the transition period ends as proposed in 2020, this provision would only be relevant for one year. The UK’s suggestion for a more flexible timeframe could extend its relevance. The UK’s position significantly deviates from the Commission’s draft by advocating for separate negotiation on fishing opportunities and independent UK negotiation within international bodies, effectively creating an exception to Article X+3(2). Article X+3(4) would address the UK’s ability to enter into fisheries treaties.

A reasonable compromise would be to guarantee within the withdrawal agreement that EU decisions on catches in UK waters during the transition/implementation period adhere to the rules that applied before Brexit.

Article [X+5] - Supervision and enforcement

The UK accepts this provision, with a technical deletion, but implicitly rejects a related Commission footnote. It also suggests granting powers to a Joint Committee to resolve disputes concerning this part of the agreement and proposes a “good faith” clause (without specific text).

This provision reflects the Council’s negotiation directives but omits a sentence explicitly stating the EU institutions’ power to conduct supervision and control proceedings.

The most contentious aspect is a footnote suggesting a mechanism allowing the EU to suspend certain benefits for the UK if it believes referring a matter to the European Court of Justice (ECJ) wouldn’t provide timely remedies. As there’s no proposed text for this clause, it’s not included in this draft analysis.

While sanctions are common remedies in international law, and the partial suspension of treaty provisions is common in EU agreements with non-EU states, this suggestion is legally and politically problematic within the withdrawal agreement.

Firstly, it’s inherently contradictory: the Commission advocates for treating the UK as a full Member State subject to the Treaties while simultaneously proposing a special rule similar to those found in international agreements with non-EU states. This contradicts the principle of maintaining substantive status quo membership during the transition period.

Secondly, the Council’s negotiation directives don’t mention this issue. In fact, creating such a rule contradicts their stance on the EU institutions’ enforcement role. It arguably also interferes with the ECJ’s jurisdiction, contradicting established case law on the ECJ’s role in agreements with non-EU countries.

The argument about the timeliness of ECJ action is weak, as the Commission can request interim measures and many relevant legal deadlines would fall after the transition period. While the UK could challenge sanctions decisions in EU courts, the question remains whether such a power should exist.

Furthermore, the footnote doesn’t mention the usual dispute settlement process preceding sanctions or the proportionality limits found in agreements like the EEA. It ignores the EEA’s careful balance, where partial treaty suspension can only occur after Norway et al. decide not to implement a new EEA-related law; no such power to refuse new EU law is foreseen for the UK.

The footnote’s lack of clarity about whether the proposed sanctions would apply to all parts of the withdrawal agreement or just the transitional rules adds further confusion.

The proposal is not only legally and politically questionable but poorly conceived, jeopardizing the Commission’s obligations as negotiator and generating ill will.

The UK’s proposal, on the other hand, is carefully crafted to avoid infringing on the autonomy of EU law. It wouldn’t grant the Joint Committee the power to bind EU institutions or Member States regarding the interpretation of EU law within the EU. However, the Joint Committee’s role could potentially conflict with the ECJ’s jurisdiction in interpreting the agreement. For instance, what happens if the UK is exempt from a new law, but someone challenges that exemption in a UK court, prompting the court to seek the ECJ’s interpretation of the withdrawal agreement? Also, the proposal doesn’t clarify what happens if the Joint Committee fails to reach a resolution. Overall, the UK’s proposal aligns more closely with the norms for non-EU countries under international agreements. However, it still suffers from the same flaw as the Commission’s proposal – treating the UK simultaneously as both an EU and a non-EU country.

Article [X+6] - European Schools

The UK accepts the provision concerning its continued participation in the European Schools system until the end of the relevant school year, with a minor wording change.