Professor Steve Peers provides us this week with a ‘running commentary’ on the draft text of the Brexit withdrawal agreement...
Last Wednesday, the EU Commission for the first time proposed the text of part of the Brexit withdrawal agreement. From the legal point of view, ultimately the withdrawal agreement (if it is successfully negotiated and comes into force) will be the key legal text governing the Brexit process as such (there will be post-Brexit treaties governing the future relationship between the EU and the UK).
Due to its importance, I will provide what the UK’s Prime Minister once disdainfully referred to as a ‘running commentary’ on the draft text of the agreement as it develops. Several caveats apply, however. First of all, this is a partial text, comprising the part of the treaty on the transitional period (which the UK government would prefer to call the ‘implementation period’) and some (probably not all) of the part on common provisions. So this is the first of perhaps many instalments of the commentary: there’s a lot of running ahead. The Articles in the final withdrawal agreement will be numbered properly, but I have used the Commission’s provisional numbering (where it suggested numbers) for now.
Secondly, this text has yet to be agreed with the other party to the talks (the UK), which has indicated its disagreement with at least some parts of this proposal.
Thirdly, to some extent this text is not even the EU27’s position, because only part of it reflects the EU27 negotiation directives on the transition period recently adopted by Member States in the EU Council, which I annotated here.
I have indicated whether an issue in the proposed text was referred to in the negotiation directives or not. If it was not referred to in those directives, then the Commission is on a ‘frolic of its own’ on those points, and its suggestions may not necessarily represent the view of Member States. Some of these points will be more controversial with the Member States than others: I expect it’s unlikely that Member States will argue with the Commission’s proposal here on European Schools, for instance. But as I suggest below, one of the Commission’s suggestions is arguably a highly inappropriate breach of its position as EU negotiator.
Conversely, where the text does represent the view of Member States, the Commission’s negotiation position should not simply be dismissed (as some in the UK do) as its own institutional preference. Put simply, it might be harder for the UK to convince EU27 Member States to change their own negotiation position, than it would be for the UK to convince those States not to follow the Commission’s institutional preferences.
In addition to the parts of the withdrawal agreement on the transition period and common provisions proposed yesterday, there will be parts dealing with ‘governance and dispute settlement’ (referred to in a footnote in yesterday’s text) and the ‘financial settlement’ (referred to in the introductory section of yesterday’s text). There will necessarily also be a part dealing with the rights of EU27 and UK citizens who moved before Brexit day: I recently made detailed suggestions as to what that text should include. I assume there will also be parts on the Irish border and on ‘winding up’ the UK’s involvement with EU law, such as what happens to pending ECJ cases or pending European Arrest Warrants, although the proposal on the transitional period would in practice delay the application of such rules.
On the financial settlement in particular, yesterday’s proposal says:
It should be noted that the detailed provisions relating to the financial settlement aspects of the transition will be covered under the Financial Provisions of the Withdrawal Agreement. In addition to the elements contained in the Joint report of 8 December 2017, the Financial Provisions of the Withdrawal Agreement should also cover the financing, during the transition period, of the relevant Common Foreign and Security Policy and Common Security and Defence Policy agencies or operations on the basis of the same contribution key as before the withdrawal date.
There is, however, no reference in yesterday’s proposal to the EU27 position that acquired rights for EU27 citizens who moved to the UK, and for UK citizens who moved to the EU27, will still be obtained for those who move during the transition period. The UK government has contested this suggestion.
One can speculate why the Commission has begun to draw up legal texts as part of the negotiation process. In any event, the December joint report on ‘sufficient progress’ in the Brexit talks referred implicitly to the intention to draw up draft texts related to the partly agreed parts of the withdrawal agreement, so we might expect more of the draft soon.
On the judicial front, the practical effect of drawing up legal texts of the withdrawal agreement is that as the final shape of the agreement becomes clearer, it becomes possible to ask the EU’s Court of Justice to clarify any disputed legal issues relating to the withdrawal agreement in advance. (The Court will not give an advance ruling on a proposed international treaty if the intended text of the proposed treaty is too uncertain: see Opinion 2/94 where the Court ruled it could only clarify some aspects of the EC’s proposed accession to the ECHR). Time is running out to give this opinion before Brexit day if the Court were asked, although it could fast-track a case if need be (Opinion 1/94 on accession to the WTO was decided in seven months).
Barnard & Peers: chapter 27
The text here is taken from footnote 1 to the proposal, which reads: “The Withdrawal Agreement will contain, in its Part on Common Provisions, an article defining Union law as meaning:…” I have suggested a title for the Article. Presumably there will be other definitions in the withdrawal agreement too. If not, this Article might simply be titled ‘Definition of Union law’.
This text reflects (and fleshes out) the first sentence of para 13 of the negotiation directives, which say that the transition rules should cover “the whole of the Union acquis, including Euratom matters”. It could be compared a contrario to the text of an accession treaty to the EU.
Oddly, there is no explicit mention here of the EU Charter of Rights - although it is referred to in the Treaties and legislation, it is a separate legal text.
The text here is also taken from footnote 1 to the proposal, which reads: “The Part on Common Provisions will also contain an article to the effect that…” the text of paragraph 1, and “Furthermore, a specific article of the Part on Common Provisions will clarify that…” the text of paragraph 2. I have added a suggested heading for the title of the Article. It is possible that these will end up as separate Articles. There might be other rules added on interpreting the withdrawal agreement.
Since they will appear in the Common Provisions of the agreement, these cross-references to the development of case law or legislation during the transition period will presumably also apply to the citizens’ rights and financial settlement provisions of the agreement.
The UK government is particularly concerned about being bound by EU legislation adopted during the transition period without its involvement, although note that this rule only applies where existing law is amended and where that amendment "takes effect" before the end of the transition period. Possibly point (iii) in the previous Article is meant to cover cases of brand new legislation, but this is unimpressive drafting. Also, the term “takes effect” is unclear: Directives enter into force immediately, but only have full legal impact after the deadline to transpose them, which is usually two years later.
In any event, the proposals do not reflect para 59 of the December joint report on progress in the Brexit talks, which states that future changes to the basic EU funding and spending laws which affect the UK will not apply to it, which would for instance prevent any changes being made to the UK rebate after it loses its power to veto such changes. However, as noted above, the Commission states that issues relating to the financial settlement will be in a separate part of the withdrawal agreement, so this issue might be covered there.
The text here is taken from footnote 2 to the proposal, which reads: “The Withdrawal Agreement will contain, in its Part on Common Provisions, the following:” I have suggested a title for the Article. I refer to this as ‘Article NN’ because the proposed Article X+2(1), which refers to it, does so (see below). There will likely be other Articles in the ‘Common Provisions’ part of the agreement. It is not clear why there are deleted words in point (c). Note that the proposed Article X+2(4) includes a derogation from this Article, allowing some limited participation of the UK in EU bodies as an exception.
This text reflects the second sentence of para 13 of the negotiation directives, which states that “the Union acquis should apply to and in the United Kingdom as if it were a Member State”, as well as the final sentence of para 18 and the first sentence of para 19 on the exclusions from a UK role in the institutions.
While the Treaties only refer to Member States as having a full decision-making role within EU institutions, there is nothing to rule out consultation with non-Member States. Indeed, the Schengen association agreement with Norway and Iceland gives them consultation rights at ministerial level. The notion that the UK is expected to apply new EU law (see the previous Article) without even being informally consulted on the relevant proposals therefore has a vindictive tinge to it. In any event, the proposals do not reflect para 30 of the December joint report on progress in the Brexit talks, which states that there should be a system to decide jointly on the incorporation of future amendments to the social security rules in the withdrawal agreement.
This text reflects para 22 of the negotiation directives. The end date is convenient for the EU27 side as it corresponds with the end of the current multi-annual EU budget cycle. For its part, the UK has referred to a transition period of “around two years”.
As the text stands, the transition period could not be extended unless another clause is added in the withdrawal agreement to allow for this. If no such clause is added, extending the transition period after Brexit day would need a new treaty adopted on a different legal basis than Article 50 (which only applies to the withdrawal process) which would need to be adopted by unanimity and possibly also ratification by national parliaments (although some or all of the treaty could apply provisionally while national ratification was taking place).
Note that Article X+1(2), discussed below, provides conversely for part of the transition period to be curtailed as regards foreign policy issues.
There are rules about what is included in the scope of UK obligations, and what is excluded from the scope of those obligations. The rule about inclusion appears as a proposed Article in a footnote to this paragraph in the Commission proposal; I have adapted it and inserted it as the text of the ‘Common Provisions’ above.
As for exclusions, sub-paragraph 1(a) keeps the UK’s existing opt outs from the single currency, Schengen, Justice and Home Affairs (JHA) law and enhanced cooperation (a system where some Member States go ahead and adopt EU law without the others), except where the UK opted in to EU laws in these areas before Brexit day. The JHA exclusion reflects the final sentence of para 13 of the negotiation directives; the other exclusions are not mentioned in those directives.
There is no opt-out from Treaty amendments, although no such amendment is planned at present. It is odd that the text does not exclude the UK from ‘permanent structured cooperation’ in the area of defence, given that the UK decided to opt out when most Member States decided to trigger that process recently.
Sub-paragraph 1(a) excludes the Treaty rules and legislation related to the European citizens’ initiative (on that process, see the case law discussed here) and also voting and standing for office in the European Parliament and local government. There is a need for a transitional clause to deal with the situation of those EU27 citizens who were elected to local government in the UK (and vice versa) before Brexit day.
Conversely other EU citizenship provisions will logically still apply. This includes the “Ruiz Zambrano” case law on UK citizen children with non-EU parents, which I discussed here.
This is the one field where the proposal contemplates an early end to the transitional period. By contrast, the UK Prime Minister’s Florence speech referred to the possibility of ending the transitional (or ‘implementation’) period early for a number of issues at different times. An early end to the transition period in this field would avoid the awkward situation where the UK becomes bound by foreign policy measures which it could have vetoed if it were a Member State. It would also end a possibility for linking defence issues to trade issues, although the policy in the Florence speech was not to insist upon such a link.
This proposed clause is partly consistent with a statement adopted by the Council when it adopted the negotiation directives. However, that statement also referred to the “fight against terrorism and international crime”, which are JHA issues. Legally it is questionable whether the UK and EU would actually be constrained by the withdrawal agreement if they wanted to sign a treaty replacing these rules in other fields of EU law during the transition period.
This proposed para transposes para 14 of the Council negotiation directives, which refer explicitly to the direct effect and supremacy of EU law.
This paragraph is not reflected in the Council negotiation directives. It is particularly relevant to the proposal on the financial transaction tax, which is subject to the enhanced cooperation process (without UK participation) but where there is no agreement yet (see more on the background to the tax proposal here). If this para is agreed, the suggestion that the UK might somehow become bound as such by the tax during the transition period is therefore, as things stand, frankly scaremongering. There is a risk that the tax would have some extraterritorial effect upon the City of London, but that risk would equally exist if the UK were still a Member State, since it could not veto an enhanced cooperation measure that it was not participating in.
This paragraph is reflected in the fourth sentence of para 13 of the Council negotiation directives. It means that the UK can opt in to new JHA laws amending JHA laws which it is already bound by. Note that the UK has already opted out of the ‘Dublin IV’ proposal on allocation of asylum seekers, so the suggestion that it could be bound by that law during the transitional period is pure scaremongering.
However, where acts of the Union provide for the participation of Member States, nationals of Member States or natural or legal person residing or established in a Member State in an information exchange, procedure or programme and where such participation would grant access to sensitive information that a third country or natural or legal person residing or established in a third country is not to have knowledge of, these references to Member States shall be understood as not including the United Kingdom.
The first sub-paragraph reflects the second sentence of para 13 of the Council negotiation directives. However, the second sub-paragraph does not reflect those directives. It seems that the Commission is concerned that the UK might hand information over to non-EU countries without authorisation.
See the text of ‘Article NN’, discussed above. As a reminder, this Article removes the UK from the EU institutions and other bodies.
This sub-paragraph does not explicitly reflect anything in the Council negotiation directives. However, it arguably is implicit that if the UK is not part of the EU institutions, there is no requirement to consult the UK’s national parliament on proposed EU measures. But even if there is no longer a legal obligation to do so, it is hard to see what harm would be caused by consulting the UK parliament, or what legal rule would prevent the EU agreeing to do so outside the context of the formal role for national parliaments of Member States set out in the Treaties.
This sub-paragraph does not explicitly reflect anything in the Council negotiation directives. However, it arguably is implicit that if the UK is not part of the EU institutions, it follows that the Bank of England does not have the status of a national central bank in its relations with the ECB.
During such meetings or parts of meetings, the representatives or experts of the United Kingdom or experts designated by it shall have no voting rights and their presence shall be limited to the specific agenda points that fulfil the conditions set out in point (a) or (b). In the invitation to be sent to representatives or experts of the United Kingdom or to experts appointed or designated by it, the chair of the meeting concerned shall clearly identify the agenda points for which their attendance is allowed.
The first half of this sub-paragraph reflects para 19 of the Council negotiation directives, and the second half elaborates upon that rule. Note that a statement by the Commission commits itself to issue a guidance document on how to apply this rule consistently in practice.
A footnote refers to the official publication of Regulation 182/2011, which sets out general rules for Member States’ participation in committees which govern the Commission’s use of implementing powers.
As in the rest of this Article and Article NN, it is questionable whether it is really necessary to limit the UK’s purely consultative role to this extent. Certainly there is only a weak argument that it is legally required.
This sub-paragraph does not explicitly reflect anything in the Council negotiation directives. It is not so obviously implicit that the UK’s exclusion from the EU institutions means that it cannot have a role as lead authority in risk assessment et al. Put another way, this is arguably an issue of EU substantive law – where the UK will in effect remain a Member State during the transition period – rather than EU institutional law, where it will not.
These two paragraphs transpose para 17 of the Council negotiation directives. They entail the UK still being bound to the EU as regards treaties with non-EU states. Logically this applies vice versa and it would be preferable to spell that out directly. It should follow that individuals can still invoke the direct effect of such treaties (where it exists) in the UK during the transition period (for instance, Turkish citizens with rights under the EU/Turkey association agreement framework).
However, the UK is not bound to non-EU countries to apply such treaties; neither can non-EU countries directly invoke such treaties against the UK. Since this could in particular affect UK exports, it makes sense for the UK to focus on replicating such treaties: see para 4 below.
This paragraph is not reflected in the Council negotiation directives. It explicitly sets out the obligation that would anyway arguably still apply implicitly, since other EU Treaty provisions on sincere cooperation would still be applicable to the UK. Note that the UK would presumably have more freedom to act once any early post-Brexit treaty on EU/UK security and defence cooperation came into force (see Article X+1(2) above).
This para transposes the wording of the final sentence of para 16 of the Council’s negotiation directives, with the important change that it only applies to ‘exclusive’ competence of the EU. This change narrows the limits on the UK’s external action. Note that the exact extent of exclusivity of EU competence is often disputed and even litigated.
Some discussion of the transition period suggests that the UK would be banned from signing treaties, but this is false: rather the UK could do so, but only with authorisation, and that limit would only apply within the area of exclusive EU competence. Also, note that the restriction is on the UK becoming ‘bound by’ international treaties during the transition period, not upon negotiation or signing such treaties. However, it might be argued that such negotiations would breach para 3 of this Article, although the obvious counter-argument from the UK would be that a treaty which does not apply until after the transition period could not affect the Union’s interests given that the UK will no longer be bound by EU law as such after that point.
There is no mention of the process of approval of the UK becoming bound by treaties. Note that one of the statements attached to the Council negotiation Directives says that the Council will approve the UK becoming bound by such treaties, in accordance with the usual Treaty rules.
This para is not reflected in the Council’s negotiation directives. It takes account of the UK’s significant foreign policy rule, in particular regarding sanctions. It’s conceivable, due to the loss of the UK veto over EU foreign policy during the transition period, that the UK could be legally bound to use (or not to use) its Security Council veto during the transition period. As with para 3, in the foreign policy context the UK would presumably have more freedom to act once any early post-Brexit treaty on EU/UK security and defence cooperation came into force (see Article X+1(2) above).
This para is not reflected in the Council’s negotiation directives, although it is consistent with the overall thrust of removing the UK from roles in EU bodies.
This reflects para 21 of the Council negotiation Directives, which states that “Specific consultations should also be foreseen with regard to the fixing of fishing opportunities (total allowable catches) during the transition period, in full respect of the Union acquis.”. If the transition period ends as proposed at the end of 2020, this would only be relevant for one year.
This reflects the first sentence of para 18 of the Council negotiation Directives, but leaves out the second sentence, which reads: “In particular, Union institutions, bodies and agencies should conduct all supervision and control proceedings foreseen by Union law.”
That brings us to the most controversial part of this proposal: there is a footnote 4 here which states as follows: “In addition, the Governance and Dispute Settlement Part of the Withdrawal Agreement should provide for a mechanism allowing the Union to suspend certain benefits deriving for the United Kingdom from participation in the internal market where it considers that referring the matter to the Court of Justice of the European Union would not bring in appropriate time the necessary remedies.” Since there is no suggested text of this clause, I have not inserted this point separately into this proposed draft of the agreement.
While sanctions in general are common remedies for breaches of treaties in international law, and the disapplication of some provisions of an agreement is common in EU treaties with non-EU states in particular, this specific suggestion in the context of the withdrawal agreement negotiations is highly legally and politically problematic.
As a matter of principle, this approach is contradictory: the Commission thinks that the UK should be a Member State fully covered by the Treaties, plus a special rule ought to apply which is similar to those in international treaties in which non-EU countries have a more distant relationship with the EU. On the contrary: substantive status quo membership should mean substantive status quo membership.
Moreover, this issue is not referred to in the Council negotiation directives; in fact, creating such a special rule contradicts the position in those directives that the EU institutions shall have their normal enforcement role. Arguably it also interferes with the ‘essential nature’ of the jurisdiction of the ECJ, contradicting the rule in ECJ case law on its jurisdiction in treaties with non-EU countries. The argument about timing of ECJ action is unconvincing, since the Commission can ask for interim measures in ECJ proceedings, and the deadlines to apply many of the laws concerned would fall after the end of the transition period. While the UK could presumably challenge the legality of any sanctions decision in the EU courts, as this proposal does not limit the UK’s standing to sue EU institutions during the transition period, the issue is whether such a power should exist in the first place.
Furthermore, the footnote makes no reference to the dispute settlement process that would usually precede such a sanction, or to the limits on the proportionality of such measures found in treaties such as the EEA. The suggestion ignores the careful balance found in the EEA, where partial disapplication of the Treaty could only follow a decision by Norway et al not to apply a new law within the scope of the EEA; but there is no such potential power to refuse to apply a new EU law foreseen for the UK. It is not clear whether the proposed sanction would only apply to breaches of the transitional rules (and if so, which), or to other parts of the withdrawal agreement too.
The proposal is then not only legally and politically questionable, but poorly thought out and justified, not only breaching the Commission’s obligations as EU negotiator but also spreading ill will in the negotiations. The phrase “frolic of the Commission’s own” scarcely does justice to the problematic nature of this proposal.
There is a footnote referring to the text of the Convention. This issue was not referred to in the Council negotiation Directives.🔷
(This piece was first published on EU Law Analysis.)