Professor Steve Peers, University of Essex

The EU Council is anticipated to establish its negotiating directives for the second stage of Brexit discussions on January 29th. These talks will primarily focus on a transition period after Brexit Day, during which existing EU law would still be applicable in the UK. A leaked version of these directives has surfaced, providing an opportunity to analyze them in detail. However, it’s important to note that this is subject to change pending final approval.

Ultimately, the EU27’s position must be agreed upon with the UK. While there appears to be some common ground between the two sides’ positions based on the Prime Minister’s Florence speech last September and the partial agreement reached in December, there are likely to be significant points of contention during the negotiation process.

These directives expand upon the broader Phase 2 negotiation guidelines adopted by EU27 leaders in December and are also informed by a proposal from the EU Commission. Where significant deviations from the Commission’s proposal exist, they are noted.

ANNEX

Supplementary directives for the negotiation of an agreement with the United Kingdom of Great Britain and Northern Ireland setting out the arrangements for its withdrawal from the European Union

1. In accordance with the European Council guidelines of 29 April 2017 and the Council negotiating directives of 22 May 2017, the initial phase of negotiations centered around citizens’ rights, financial settlement, matters concerning the island of Ireland, other separation-related issues, and the governance of the Withdrawal Agreement.

2. Recognizing the progress made, the European Council, on 20 October 2017, urged continued efforts to solidify the existing consensus and advance negotiations to transition to the second phase as soon as feasible. Consequently, the European Council invited the Council, alongside the Union negotiator, to initiate internal preparatory dialogues, encompassing potential transitional provisions.

3. Drawing upon:

– the recommendation presented in the Commission Communication on the state of progress of the negotiations with the United Kingdom under Article 50 of the Treaty on European Union of 8 December 2017

– the Joint Report from the negotiators of the European Union and the United Kingdom Government on progress during phase 1 of negotiations under Article 50 TEU on the United Kingdom’s orderly withdrawal from the European Union of 8 December 2017, which serves as the foundation for the Commission’s recommendation,

the European Council, on 15 December 2017, acknowledged the advancements achieved in the first phase of negotiations, deeming them sufficient to proceed to the second phase, focusing on transition and the framework for the future relationship.

4. The European Council emphasized that progress in the second phase of negotiations hinges on the full and faithful implementation of all commitments made during the first phase, translated into legally binding terms promptly. Moreover, during this phase, a comprehensive understanding of the framework for the future relationship between the Union and the United Kingdom should be attained. For this purpose, the European Council resolved to adopt additional guidelines concerning this framework in March 2018 and called for greater clarity from the United Kingdom regarding its stance on the framework for the future relationship.

5. These current negotiating directives supplement the initial set adopted on 22 May 2017. The European Council guidelines of 29 April 2017, alongside the general principles and procedural arrangements for conducting negotiations established in the Council negotiating directives of 22 May 2017, remain fully applicable to this phase. This includes aspects related to the territorial scope of the withdrawal agreement, encompassing provisions on transitional arrangements and the future framework. These negotiating directives, like the first set, should completely adhere to paragraphs 4 and 24 of the European Council guidelines of 29 April 2017, particularly with regard to Gibraltar.

It’s important to highlight that this refers to a Spanish veto regarding any post-Brexit arrangements concerning the relationship between Gibraltar and the EU.

6. Due to the unique circumstances and specific nature of issues surrounding the island of Ireland, the development of detailed arrangements to implement the principles and commitments outlined in the Joint Report should proceed as a distinct strand during the second phase of negotiations.

It’s worth noting that the final version excludes the following wording proposed by the Commission: ‘…some of which would be translated in the Withdrawal Agreement, others in the framework for the future relationship.’ This original wording implied that certain matters related to Ireland would unequivocally be handled as post-Brexit issues. Omitting this suggests that they will either be fully resolved within the withdrawal agreement or leaves the issue open-ended. In reality, it will be challenging to address them all within the withdrawal agreement, as they are undeniably intertwined with the future relationship. The phrase ‘unique circumstances’ was also introduced. The issues surrounding the Irish border, as articulated in the December joint report, were previously discussed.

6.a Given that the arrangements governing relations between the Union and the Sovereign Base Areas in Cyprus will remain defined within the context of the Republic of Cyprus’ membership in the Union, appropriate provisions should be established during negotiations as needed to achieve the objectives set forth in Protocol 3 to the Act of Accession of the Republic of Cyprus to the Union.

This entire paragraph represents an addition.

I. ISSUES RELATED TO THE ORDERLY WITHDRAWAL OF THE UNITED KINGDOM FROM THE EUROPEAN UNION

7. Aligned with the European Council guidelines of 15 December 2017 and the negotiating directives annexed to the Council Decision of 22 May 2017, as supplemented by these negotiating directives, it is imperative to finalize work on all withdrawal-related matters, including those not yet covered in the initial phase. This encompasses, but is not limited to, aspects like the governance of the Withdrawal Agreement, intellectual property rights, ongoing public procurement procedures, customs-related considerations necessary for a seamless withdrawal from the Union, the protection of personal data, and the utilization of information acquired or processed prior to the withdrawal date.

The Council added the entire second sentence. Commission negotiation papers on these topics are publicly available. It’s important to acknowledge that there was partial agreement on some of these “winding up” issues in the December joint report. Technically, there’s no need to incorporate these matters into the withdrawal agreement if the UK intends to maintain the status quo of EU membership for a period; they could be addressed as part of concluding the transition period. However, the EU27 side appears eager to finalize these aspects now. Governance issues encompass dispute resolution, where reaching an agreement on the precise role of the ECJ will be challenging.

8. Furthermore, negotiations in the second phase should translate the outcomes of previous negotiations, including those achieved in the first phase, into clear and unambiguous legal language. These should be adjusted as appropriate in light of the transitional arrangements mentioned below. Specifically, the provisions within the Citizens’ rights section of the withdrawal agreement should come into effect at the conclusion of the transition period. Consequently, the “specified date” referenced in paragraph 8 of the Joint Report should be defined as the end of the transition period.

The Council added the words ‘clear and unambiguous’ and the entire second and third sentences. The Commission’s proposed sentence, ‘As specified in the first set of the negotiating directives, the Withdrawal Agreement should recall that Union law ceases to apply on the withdrawal date to the overseas countries and territories having special relations with the United Kingdom and to the European territories for whose external relations the United Kingdom is responsible, to which the Treaties apply by virtue of Article 355 of the Treaty on the Functioning of the European Union,’ was removed.

This paragraph stresses the significance of formulating a formal legal text for the withdrawal agreement. Upon agreement and ratification, this text, rather than negotiation documents, will serve as the definitive legal basis for the UK/EU27 withdrawal process. The stance that the cutoff date for acquired rights of EU27 citizens in the UK and UK citizens in the EU27 will be the end of the transition period aligns with the Commission’s prior viewpoint. It is plausible that the UK side might contest this.

The citizens’ rights provisions of the joint report were previously analyzed in greater detail. While certain aspects have been agreed upon in detail, other points, such as the freedom of UK citizens residing in one Member State to relocate to other Member States, were reserved for further deliberation.

II. TRANSITIONAL ARRANGEMENTS

9. The European Council guidelines of 29 April 2017 establish fundamental core principles that apply to any agreement with the United Kingdom, as well as to any transitional provisions:

– any agreement must be founded on a balance of rights and obligations, ensuring a level playing field;

– maintaining the integrity of the Single Market precludes participation based on a sector-by-sector approach;

– a non-member of the Union that does not adhere to the same obligations as a member cannot expect the same rights and benefits as a member;

– the four freedoms of the Single Market are indivisible, and there is no room for “cherry picking”;

– the Union will safeguard its autonomy in decision-making, as well as the role of the Court of Justice of the European Union. As per the European Council guidelines of 15 December 2017, this pertains particularly to the jurisdiction of the Court of Justice of the European Union.

10. In addition to these core principles, the European Council guidelines of 29 April 2017 outline specific conditions for any potential transitional arrangements. If necessary and legally permissible, negotiations may aim to define transitional arrangements that serve the Union’s interests and, where appropriate, establish bridges towards the anticipated framework for the future relationship, considering the progress made. As reaffirmed by the European Council Guidelines of 15 December 2017, any such transitional provisions must be clearly defined, have a precise time limit, and be subject to effective enforcement mechanisms.

11. These supplementary negotiating directives build upon and elaborate on the principles and conditions set forth in the European Council guidelines of 15 December 2017.

12. Consistent with those guidelines, which further specify and develop the core principles outlined in the European Council guidelines of 29 April 2017, any transitional arrangements stipulated in the Withdrawal Agreement should encompass the entirety of the Union acquis, including Euratom matters. Notwithstanding paragraph 17 of these negotiating directives, the Union acquis should apply to and within the United Kingdom as if it were a Member State. Any modifications to the Union acquis should automatically be applicable to and within the United Kingdom throughout the transition period. For acts adopted within the Area of Freedom, Security and Justice that are binding on the United Kingdom before its withdrawal, Articles 4a of Protocol (No 21) and 5 of Protocol (No 19) annexed to the Treaties, which permit the United Kingdom to not participate in an act amending a measure by which it is already bound, should remain in effect during the transition period. This includes the possibility for the Union to determine that such non-participation would render the relevant measure inoperable and, therefore, that the measure should cease to apply to the United Kingdom. However, the United Kingdom should no longer be allowed to opt into measures within this Area other than those amending, replacing, or building upon the aforementioned existing acts.

Regarding the application of new EU laws, there will be a slowdown in EU legislative activity roughly between May and December 2019 due to the European Parliament elections and the transition to a new Commission. Many measures adopted after this period wouldn’t apply to the UK anyway, assuming the transition period concludes as proposed at the end of 2020, as Directives generally have a two-year implementation deadline. The primary focus will be on adopting new funding legislation, which won’t be applicable until after 2020 either. It’s worth noting that the UK will relinquish its current veto power in areas such as tax and foreign policy rules. However, the December joint report stated that the UK would not be bound by changes to the fundamental laws governing revenue and spending, meaning the UK will retain its budget rebate until the end of 2020.

The legal language concerning the “Area of Freedom, Security and Justice” implies that the UK will retain the ability to opt into new EU legislation on EU asylum, criminal law, or policing, but only if such legislation amends existing EU legislation (which is the case in most instances). If such legislation is entirely new, i.e., not an amendment to existing law, the UK will lose its right to opt in and will not be bound by it. The current rule, which allows the UK to be excluded from existing laws in this area if it chooses not to opt into measures amending those existing laws, will remain in effect. Notably, this power has not been exercised to date.

13. Throughout the transition period, Union law covered by these transitional arrangements should have the same legal effect in the United Kingdom as it does within EU Member States. Specifically, the direct effect and primacy of Union law should be upheld.

The Council added the final sentence, ensuring that the current rules governing the legal impact of EU law within the UK’s domestic legal systems would remain unchanged during the transition period. The UK has previously agreed to this concerning the acquired rights of EU27 citizens.

14. During the transition period, and in accordance with the European Council guidelines of 29 April 2017, the United Kingdom will continue to be obligated by the commitments arising from agreements concluded by the Union, by Member States acting on its behalf, or jointly by the Union and its Member States. However, the United Kingdom should cease participation in any bodies established by these agreements.

The Council replaced the phrase ‘will no longer benefit from’ with ‘will remain bound by the obligations stemming from’ and deleted the sentence, ‘Where it is in the interest of the Union, the Union may consider whether and how arrangements can be agreed that would maintain the effects of the agreements as regards the United Kingdom during the transition period’.

The intent appears to be that the UK will remain obligated to the EU to enforce agreements reached with non-EU nations by the EU (or jointly by the EU and its Member States). However, since the withdrawal agreement cannot bind non-EU countries, these nations will no longer have obligations to the UK unless they agree to maintain their existing obligations. The negotiation of treaties between the UK and non-EU countries is addressed in the subsequent paragraph.

15. In line with the European Council guidelines of 15 December 2017, any transitional arrangements necessitate the United Kingdom’s continued involvement in the Customs Union and the Single Market (including all four freedoms) during the transition. The United Kingdom should implement all necessary measures to safeguard the integrity of both the Single Market and the Customs Union. Moreover, the United Kingdom should maintain compliance with Union trade policy. It should also ensure that its customs authorities continue operating in accordance with the mission of EU customs authorities, including collecting Common Customs Tariff duties and conducting all necessary checks required under Union law at the border with other third countries. During the transition period, the United Kingdom is prohibited from entering into international agreements on its own behalf in areas within the competence of Union law, unless authorized by the Union.

The Council added the final sentence. This paragraph guarantees that there will be no changes to the application of the single market or the customs union to the UK during the transition period. However, the limitation on the UK’s authority to enter into treaties raises some questions. This restriction applies only if such treaties fall within the EU’s purview; however, for EU members, there is intricate external relations case law established by the ECJ that dictates when they can sign treaties, even in areas where the EU could also enter into treaties. It remains unclear whether the intention is to replicate this case law or to subject the UK to stricter limitations than it would have as a Member State.

For the UK, the crucial point might be whether it retains the freedom to negotiate and sign treaties during the transition period, even if those treaties don’t take effect until afterward. The negotiation directives are silent on this matter. The UK could reasonably argue that replicating its existing rights and obligations in a new treaty with a non-EU country should either be automatically approved by the EU or not require EU approval at all.

16. As stated in the European Council guidelines of 29 April 2017 and the initial set of negotiating directives of 22 May 2017, any time-limited extension of the Union acquis necessitates the continued application of existing Union regulatory, budgetary, supervisory, judiciary, and enforcement instruments and structures, including the jurisdiction of the Court of Justice of the European Union.

17. Therefore, concerning the application of the Union acquis to the United Kingdom, the Withdrawal Agreement should preserve the full authority of Union institutions (particularly the complete jurisdiction of the Court of Justice of the European Union), bodies, offices, and agencies in relation to the United Kingdom and its natural or legal persons during the transition period. Specifically, Union institutions, bodies, and agencies should continue to conduct all supervisory and control procedures as stipulated by Union law. However, in accordance with the European Council guidelines of 15 December 2017, the United Kingdom will no longer participate in, nominate for, or elect members of the Union institutions, nor will it engage in the decision-making or governance of Union bodies, offices, and agencies.

The Council added the second sentence. The text indicates that while the UK will not be part of the EU’s institutions (such as the Council, Commission, European Parliament, or EU court), it will still be subject to their decisions, as noted earlier.

While the text refers to the application of all existing powers of the ECJ, in practice, the EU27 side had previously consented to a more limited scope of authority for the ECJ regarding citizens’ rights.

18. As a general rule, the UK will not attend meetings of committees mentioned in Article 3(2) of Regulation (EU) No 182/2011, Commission expert groups, or similar entities of agencies, offices, or bodies where Member States are represented during the transition period. In exceptional cases, and on a case-by-case basis, the United Kingdom could be invited to attend such meetings without voting rights:

– when the discussion pertains to individual acts directed at the United Kingdom or its natural or legal persons; or

– when the United Kingdom’s presence is deemed necessary by the Union for the effective implementation of the acquis during the transition period.

For context, the Regulation in question establishes general rules regarding the oversight of the Commission when it enacts measures to implement EU legislation.

19. The Withdrawal Agreement should precisely define the conditions and establish a clear framework governing such exceptional attendance.

20. Moreover, specific consultations regarding the setting of fishing opportunities during the transition period should be arranged, in full compliance with the Union acquis.

21. The transition period should commence on the date the Withdrawal Agreement enters into force and should not extend beyond 31 December 2020.

This date is advantageous for the EU27 as it aligns with the end of the current multi-year budget cycle. There is no mention of a potential extension to the transition period, and paragraph 10 asserts that the period’s duration should be “precisely limited.” The notion of an indefinite extension to the transition period could potentially give rise to legal challenges. While it would be possible to establish a new agreement post-Brexit to extend the transition period, this would likely require unanimous agreement and potentially necessitate national ratification in some instances.

Barnard & Peers: chapter 27

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