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UK government publishes draft Withdrawal Agreement

16 November 2018

The government has published the draft Withdrawal Agreement, reflecting the in principle agreement between the UK and EU negotiating teams on the full legal text.

Following a special European Council meeting on 25 November, the government will then lay a final version of the agreement before parliament.

The government has also published an outline of the Political Declaration on the future relationship, setting out progress on the scope of the framework for the future relationship. Negotiations are ongoing to finalise this Declaration.

A summary of the salient points in the draft Withdrawal Agreement (WA) is below:

Transition period (including the extension clause)

  • Article 126 sets out the transition period, which will last until 31 December 2020. During this period the EU will treat the UK as if it were a member state, with the exception of the UK’s participation in the EU institutions and governance structures. One exception to the latter rule is that UK experts can attend working group meetings when the discussion concerns acts applying to the UK during the transition period and/or where the UK’s presence is 'necessary and in the interest' of the EU. These experts will not have voting rights.
  • Article 129 states that the UK will be bound by obligations stemming from the EU’s international agreements during transition.
  • Article 129 goes on to state that, during the transition period, the UK can negotiate, sign and ratify international agreements in the areas of EU exclusive competence provided those agreements do not enter into force during the transition period.
  • Furthermore, Article 129 states that the CJEU retains jurisdiction over the UK during the transition period.
  • The Joint Committee (ie UK and EU representatives deciding jointly) can agree to extend the transition period at any time before 1 July 2020 (ie 6 months before the end of the transition period) according to Article 129.

Mutual recognition of professional qualifications

  • Article 27 states that the text relating to MRPQs is unchanged and is identical to that set out in the draft WA.
  • Article 27 also includes specific mention to the Lawyers Directives in the context of professional qualifications. Qualifications that have been recognised by the end of the transition period will continue to have effect after the end of the period.
  • For ongoing procedures in recognising qualifications, Article 28 provides for applications introduced before the end of the transition period.

Ongoing judicial co-operation in civil judicial cooperation (title VI)

  • The Rome I and II Regulations on the law governing contractual and non-contractual obligations will apply to contracts concluded (or events occurring in the case of Rome II) before the end of the transition period (Article 66).
  • The Brussels Regulation and other rules on jurisdiction will apply to proceedings taken before the end of the transition period (Article 67).
  • On the recognition and enforcement of judgments, Brussels Regulation applies to proceedings taken before the end of the transition period. It also applies to decisions / instruments/settlements that are approved or concluded before the end of the transition period. The same applies to Brussels IIa, the Maintenance Regulation, and to European Enforcement Orders (provided that the certification as a European Enforcement Order was applied for before the end of the transition - Article 67).
  • For ongoing judicial procedures (article 68), the Service of Documents Regulation and the Regulation on the taking of evidence will apply to judicial documents received / requests received before the end of the transition period.
  • Article 67 states that the Regulation on the mutual recognition of protection measures in civil matters will apply to all certificates that have been issued before the end of the transition period.
  • Similarly, Article 67 also states that the Insolvency Regulation will apply to insolvency proceedings provided that the main proceedings were opened prior to the end of the transition period.
  • Provisions on ongoing cases

    • The CJEU has jurisdiction in all cases brought by or against the UK before the end of the transition period. This also applies to appeals before the ECJ and cases before the General Court when the case is referred back to the General Court (GC) by the ECJ (Article 86).
    • The CJEU can decide on preliminary rulings referred to it before the end of transition (Article 86).
    • The Commission can take proceedings against the UK if it has not fulfilled its obligations under the treaties or implemented an EU decision during the transition period up to four years after the end of the transition period (Article 87).
    • Article 90 sets out the UK’s rights to intervene in a case of concern to it in the CJEU.

    Representation of lawyers at EU courts

    • Article 91 states that UK lawyers have the right to continue to represent a party in proceedings before the CJEU in all stages of proceedings, in relation to the proceedings mentioned above.

    Ongoing intellectual property rights

    • Article 54 provides for the automatic transfer of an EU IP right into an equivalent UK right where the right was granted / registered before the end of transition.
    • Geographical indications granted in the EU before the end of the transition period will be protected in the UK at the end of the transition, without need for re-examination (also Article 54).
    • Registration of IPRs in the UK will be free for rights holders and will be carried out by the UK authorities using data from the EU IPO (Article 55).
    • Where a right is exhausted in the EU before the end of the transition period, exhaustion will apply also in the UK (Article 61).

    The dispute resolution mechanism and institutional arrangements

    The Joint Committee will oversee everything and is a forum for both the UK and EU to settle disputes at the political level. If there’s a disagreement, the dispute goes to international arbitration. There are specific provisions for citizens, where a joint authority in the UK will temporarily monitor the section on their rights. They can take cases against the government in UK courts if the agreement is breached.

    If an individual or business wants to challenge the application of the Treaty

    During transition:

    • The EU will treat the UK as if it were a member state, with the exception of the UK’s participation in the EU institutions and governance structures. This includes all levels of governance structures, with one exception: UK experts can attend working group meetings when the discussion concerns acts applying to the UK during the transition period and/or where the UK’s presence is 'necessary and in the interest' of the EU. These experts will not have voting rights.
    • The Commission and CJEU retains jurisdiction over the UK during the transition period.
    • Article 91 states that UK lawyers have the right to continue to represent a party in proceedings before the CJEU in all stages of proceedings, in relation to the proceedings mentioned above. This right under Article 91 applies only where the case has been brought to the CJEU before the end of the transition period.

    Citizens’ rights:

    • An independent authority in the UK will monitor the application of the provisions on citizens’ rights in the UK. It will have powers similar to those of the Commission at present in this area. The authority can bring legal actions to UK courts where it receives complaints from EU citizens on the basis of the provisions of the WA. The specialised committee on citizens’ rights (under the Joint Committee) will review the Commission and Authority’s work on a yearly basis. After eight years, the Joint Committee can assess the Authority’s work and can at that point abolish it.
    • Furthermore, the UK courts can refer cases to the CJEU for eight years after the end of the transition (Article 158). However, this part does not contain any provision on the right for the UK lawyers to represent clients in front of the Court.
    • The Joint Committee ultimately oversees the authority’s work.

    Northern Ireland

    • On Northern Ireland there will be specific institutional structures created, also under the umbrella of the Joint Committee, to give effect to the EU rules needed to maintain a frictionless border.

    If the dispute is between the UK and the EU on interpretation of the Treaty:

    • Article 164 – A Joint Committee will be created with representatives from the UK and EU. It will meet at least once per year and is responsible for the implementation, application and interpretation of the WA. Both the UK and the EU can refer any issues arising to the Committee. It will issue an annual report on the functioning of the WA and oversees all of the new UK-EU institutional structures created by this Agreement.
    • Specialised committees will work on specific areas and their work will be overseen by the Joint Committee. The Joint Committee can create new specialised committees if necessary. There will at least be committees working on (a) citizens’ rights, (b) other separation provisions, (c) Northern Ireland, (d) Cyprus, (e) Gibraltar and (f) on financial provisions. The committees will be made up of both UK and EU representatives.
    • The Joint Committee has the power to adopt decisions and to make recommendations both to the UK and EU. Its decisions are binding. Decisions will be made by mutual consent.
    • Article 170 sets out an arbitration where the Joint Committee cannot resolve a dispute within three months. An arbitration panel will then be created through the International bureau of the Permanent Court of Arbitration. By the end of the transition period, the Joint Committee must have identified 25 people to serve on the panel (10 each proposed by the UK and EU and five to act as chairperson). These individuals must be independent and will sit in panels of five.
    • Further provisions detail the rules involved in selecting members of a given panel and how to move forward if the parties cannot decide on a chairperson.
    • The panel has 12 months to deliver its ruling. If the case is urgent, an expedited procedure applies and a decision can be delivered within six months.
    • Importantly, where a dispute concerns the interpretation of a concept of EU law, the panel cannot decide on that question. Instead the CJEU should deliver a ruling, which is binding on the panel.
    • The ruling of the arbitration panel is binding on the UK and EU. The panel can apply temporary remedies for non-compliance including a lump sum/penalty payment. Ultimately, parts of the Agreement can be suspended in the case of continued non-compliance.
    • Protocol on Ireland/Northern Ireland: The UK is responsible for implementing and applying all provisions of EU law required under the so-called backstop in Northern Ireland. EU representatives can monitor the work of the UK on this. The Joint Committee can decide how this cooperation will work in practice. The CJEU retains jurisdiction over these areas of law. UK lawyers have the right to plead before the EU Courts in this respect and the UK can intervene in cases taken in these cases. For new EU acts falling within the scope of the Protocol, the EU will inform the UK of this via the Joint Committee. A joint consultative working group will be established to work under the Specialised Committee on Northern Ireland to allow for the exchange of information.
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