Draft Article 50 Withdrawal Agreement

The European Commission has today (28 February 2018) published a draft document on the Withdrawal Agreement between the European Union and the United Kingdom as a Position Paper from the EU Commission to the EU 27.

This document will ultimately form a Treaty between the UK and the EU

The draft Withdrawal Agreement translates into legal terms the Joint Report from the negotiators of the EU and the UK Government on the progress achieved during phase 1 of the negotiations, published on 8 December 2017, and proposes text for those outstanding withdrawal issues which are mentioned in, but not set out in detail, in the Joint Report. It also integrates the text on the transition period, based on the supplementary negotiating directives adopted by the Council (Article 50) on 29 January 2018.

https://ec.europa.eu/commission/brexit-negotiations/negotiating-documents-article-50-negotiations-united-kingdom_en

The document is a basis for negotiations with the UK and reflects the EU position which has not (necessarily) been agreed to by the UK for example, on the role of the ECJ (European Court of Justice). So compromise is still required but to-date there doesn’t not appear to have been much (if any) compromise from the EU side.

The Draft Withdrawal Agreement sets out the arrangements for the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and from the European Atomic Energy Community. It will now be discussed over the coming weeks with the Council (Article 50) and the Brexit Steering Group of the European Parliament before transmission to the UK authorities for negotiation.

The document is almost 120 pages long and contains 168 paragraphs (Articles). It wraps up previous discussions into a formal legal text.

There are six main parts

  • Common Provisions (articles 1-7)
  • Citizens’ Rights (articles 8-35)
  • Separation Provisions (articles 36-120)
  • Transition (Implementation) (articles 121-126 )
  • Financial Provisions (articles 127-150 )
  • Institutional and Final Provisions (articles 151-168 )

Also included are a Protocol on Ireland/Northern Ireland and a Protocol relating to the Sovereign Base Areas in Cyprus and various Annexes, some of wich are yet to be completed.

The role of the Court of Justice seems to continue after the Transition (Implementation) period, as in Article 4

In the interpretation and application of this Agreement, the United Kingdom’s judicial and administrative authorities shall have due regard to relevant case law of the Court of Justice of the European Union handed down after the end of the transition period.

I also noted a lack of Reprocity in certain articles e.g.

Article 7 – Access to network and information systems and data bases

At the end of the transition period, the United Kingdom shall cease to be entitled to access any network, any information system, and any database established on the basis of Union law. The United Kingdom shall take appropriate measures to ensure that it does not access a network, information system, or database which it is no longer entitled to access.

Fair enough but should it also state

At the end of the transition period, the EU and member states of the EU, shall take appropriate measures to ensure that it does not access a network, information system, or database which it is no longer entitled to access.

Other points worthy of note:

  • The EU wants to extend Citizens Rights to the end of the Transition (Implementation) period rather than from the Withdrawal Date as agreed in December.
  • Transition (Implementation) Period will end on 31 December 2020. (Art 121)
  • Union law shall be applicable to and in the United Kingdom during the transition period. (Art 122)
  • Unless otherwise provided in this Agreement, during the transition period, any reference to Member States in the Union law applicable pursuant to paragraph 1, as implemented and applied by Member States, shall be understood as including the United Kingdom.(Art 122)
  • Notwithstanding paragraph 3, during the transition period, the United Kingdom may not become bound by international agreements entered into in its own capacity in the areas of exclusive competence of the Union, unless authorised to do so by the Union.(Art 124)
  • Financial – Payments by the UK to the EU

  • For the years 2019 and 2020, in accordance with Part Four, the United Kingdom shall contribute to and participate in the implementation of the Union budgets. (Art 128) [no mention of the rebate in payments]
  • The applicable Union law concerning the Union’s own resources relating to financial years until 2020 shall continue to apply to the United Kingdom after 31 December 2020, including where the own resources concerned are to be made available, corrected or subject to adjustments after that date. (Art 129)
  • Unless otherwise provided for in this Agreement, the United Kingdom shall be liable to the Union for its share of the budgetary commitments of the Union budget and of the budgets of the Union decentralised agencies outstanding on 31 December 2020 and the commitments made in 2021 on the carryover of commitment appropriations from the budgets for 2020. (art 133)
  • In particular, the United Kingdom shall contribute to its share of the Union liability for the pension and other employee benefits as it stands on 31 December 2020. Payments related to this liability shall be made when the amounts fall due. [forever] (art 135)
  • Participation in the European Development Fund (art 145)
  • Commitments toward the Trust Funds and the Facility for Refugees in Turkey (art 148)
  • The United Kingdom’s obligations from the date of entry into force of this Agreement Until 31 December 2020, the United Kingdom shall contribute to the financing of the European Defence Agency, the European Union Institute for Security Studies, and the European Union Satellite Centre, as well as of Common Security and Defence Policy operations, on the basis of the same contribution key as before the date of entry into force of this Agreement. (art 149)
  • Payments from the EU to the UK

    These payments are all staged over a number of years. Why not pay in full?

  • Article 138 – The Union shall be liable to the United Kingdom for its share of the net assets of the European Coal and Steel Community in liquidation. The relevant amount shall be reimbursed to the United Kingdom in 5 equal annual instalments.
  • Article 139 – The Union shall be liable to the United Kingdom for its share of the Union’s investment in the paid-in capital of the EIF on 31 December 2020. The relevant amount shall be reimbursed to the United Kingdom in 5 equal annual instalments.
  • Article 142 – The European Central Bank shall on behalf of the Union reimburse to the Bank of England the paid-in capital provided by it. The date of the reimbursement and other practical arrangements shall be established in accordance with Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank.
  • Article 143 – The EIB shall pay to the United Kingdom on behalf of the Union an amount equal to the share of the United Kingdom of the paid-in subscribed capital of the EIB as it stood immediately prior to the date of entry into force of this Agreement. The payment shall be made in accordance with Protocol No 5 on the Statute of the European Investment Bank. It shall be made in twelve yearlyinstalments. The first eleven instalments, each equal to EUR 300,000,000, shall be due on 15 December of each year starting in 2019. The balance of EUR 195,903,950 shall be due on 15 December 2030. The payments made in accordance with this paragraph shall not release the United Kingdom from its liability in accordance with paragraph 5. The obligation to pay the amount not yet paid pursuant to this paragraph shall lapse in the event that the EIB enters liquidation.
  • Article 144 – Participation of the United Kingdom in EIB group after the withdrawal date As from the date of entry into force of this Agreement, the United Kingdom, entities established in the United Kingdom and projects located in the United Kingdom shall not be eligible for new financial operations from the EIB group reserved for Member States, including those under Union mandates.
  • Disputes

  • A Joint Committee is hereby established, comprising representatives of the Union and of the United Kingdom. The Joint Committee shall be co-chaired by the Union and the United Kingdom. (art 157)
  • The Joint Committee may, at any point, decide to submit the dispute brought before it to the Court of Justice of the European Union for a ruling. The Court of Justice of the European Union shall have jurisdiction over such cases and its rulings shall be binding on the Union and the United Kingdom. (art 162)
  • Suspension of benefits during the transition period. Notwithstanding Article 126 of this Agreement, if during the transition period the Union considers that the United Kingdom has not fulfilled, during the transition period, an obligation under Union law as found in a judgment rendered pursuant to Article 126 of this Agreement in accordance with Article 258 TFEU, or that the United Kingdom does not respect an order rendered pursuant to Article 126 of this Agreement in accordance with Article 279 TFEU, and where the functioning of the internal market, of the customs union, or the financial stability of the Union or its Member States would be jeopardised as a result, the Union may suspend certain benefits deriving for the United Kingdom from participation in the internal market.(art 165)
  • The subject of the Withdrawal Agreement on Ireland and Northern Ireland is worthy of a specially devoted article and will be discussed/summarised in a separate post.

    The European Commission also produced a Fact Sheet related to this document titled:

    Questions & Answers: Publication of the draft Withdrawal Agreement between the European Union and the United Kingdom