16.1 EFTA separation agreements
On 20 December 2018, the Government announced it had reached agreement with the three EFTA EEA countries to address separation issues following Brexit, including protecting the rights of UK citizens living in these countries and citizens of these countries living in the UK, as well as an agreement with Switzerland covering citizens’ rights.
The agreement with the EEA EFTA states (Norway, Iceland and Liechtenstein) covers separation issues similar to some of those covered by the UK-EU withdrawal agreement, including citizens’ rights, arrangements for goods placed on the market, intellectual property, ongoing police and judicial co-operation, ongoing judicial procedures, data protection and public procurement. It winds down certain arrangements that the UK has with these states by virtue of the UK’s participation in the EEA agreement (as a member of the EU) as well as addressing citizens’ rights following the UK’s exit from the EU. On citizens’ rights it provides that all UK nationals legally resident in EEA EFTA states and nationals of these countries legally resident in the UK at the end of the post-Brexit implementation or transition period will have the right to reside permanently in these countries, together with family members. Close relatives will be able to join them at any point in the future. The right to permanent residence will apply to those who have resided continuously in the host state for five years. Those who have not met this threshold will also be able to stay and then apply for permanent residence once they have reached the threshold. The agreement also covers rights of workers, equal treatment, mutual recognition of qualifications and social security co-ordination.
The Government explainer for the agreement said that it would be implemented in domestic legislation through the planned EU (Withdrawal Agreement) Bill. The agreement is predicated on the approval of the UK-EU Withdrawal Agreement (WA), with most provisions applying following the envisaged implementation or transition period in the WA. Article 4(3) states that the provisions of Part Two (Citizens’ Rights) and Part Three (Separation Provisions) shall be implemented in conformity with the corresponding provisions in the EU-UK WA. The agreement would not apply in the event of the WA (or an amended version of it) not being approved. In announcing the agreement, the Government said it was “discussing no deal arrangements with the EEA EFTA states”.
The UK-Switzerland agreement is narrower in scope, just covering citizens’ rights. As with the agreement with the EEA EFTA states, the Government explainer for the agreement said that it would be implemented in domestic legislation through the planned EU (Withdrawal Agreement) Bill. Unlike the agreement with the EEA EFTA states, the agreement with Switzerland will come into force in the event of no deal with the EU. It provides that the agreement will come into force following the envisaged implementation or transition period should the WA be approved, or from the date of exit from the EU if there is no deal.
The agreement protects the rights of Swiss and UK nationals who have acquired rights under the EU-Swiss agreement on the free movement of persons (FMOPA), which will no longer apply to the UK as a consequence of UK withdrawal from the EU. It provides that UK nationals and family members lawfully residing in Switzerland and Swiss nationals and family members residing in the UK on the specified date (the date of Brexit if the UK leaves the EU with no deal, or the date of the end of the transition period if there is a deal) will be able to continue living in their host countries. There are also rights to family reunion for five years after the arrangements enter in force. Once they have five years residence, citizens covered by the agreement will be able to apply for settled status in the UK or permanent residence in Switzerland. The agreement also covers rights of workers, equal treatment, mutual recognition of qualifications and social security co-ordination.
The Government statement announcing both agreements said that EEA EFTA and Swiss nationals who want to stay beyond the end of the implementation period will be able to apply to the UK’s Settlement Scheme in the same way as EU citizens, and would need to do so by June 2021.
On 8 February 2019, the Government announced that it had reached a separate agreement with Norway, Iceland and Liechtenstein to protect citizens’ rights in a no deal scenario.
16.2 Open Skies agreement with the US
On 28 November 2018 the Government announced that it had concluded a new ‘open skies’ air services arrangement with the USA ahead of EU exit. This would replace the existing EU aviation agreement with the USA (as it applies to the UK) and would safeguard flights between the UK and the USA after Brexit.
The Government said that this was one of nine new bilateral aviation arrangements the government has already concluded with countries guaranteeing the continuation of vital air routes. The others are with Albania, Georgia, Iceland, Israel, Kosovo, Montenegro, Morocco and Switzerland. This was followed by an announcement on 30 November that a similar air services agreement had been concluded with Canada. On 17 December, Transport Secretary Chris Grayling said he would, that day, be signing the previously flagged air services agreement with Switzerland.
16.3 The EU’s international agreements
The UK is currently party to numerous international agreements with third countries as an EU Member State. The EU’s Europa online treaties database lists 1,256 international agreements to which the EU is party. How many of these are pertinent to the UK is as yet unclear. But as most aspects of external relations are Member State or shared competences, there are
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more options available to the UK to establish working bilateral mechanisms for cooperation in a no-deal scenario.
A report in the Financial Times in May 2017 suggested that there were 759 separate EU international agreements with potential relevance to the UK. These included 295 agreements related to trade (discussed in section 6), as well as agreements on regulatory co-operation, fisheries, agriculture, nuclear co-operation and transport co-operation (including aviation agreements enabling air transport). The agreements cover 168 countries, with multiple accords with certain countries.
Liam Fox has indicated that such high figures are misleading, and that not all of the treaties would require action to maintain continuity following Brexit. Some of these treaties have been superseded, are redundant or no longer relevant to the UK, and there are also multiple agreements that could be understood as one agreement. It is not possible to identify which treaties remain in force from the FCO UK Treaties Online database. Dr Fox said in December 2017 that work was “ongoing” to “identify the full range of agreements that are affected by exit and to take action to ensure continuity for businesses and individuals on exit”.
The Department for Exiting the EU oversees the lnternational Agreements programme across the Government, with the Foreign and Commonwealth Office (FCO), the Department for lnternational Development and the Department for lnternational Trade having responsibility for agreements. 684
A Financial Times article on 29 October 2018 reported that the UK had so far managed to rollover only 14 of 236 relevant EU international treaties, referring to figures discussed at an internal meeting of Government officials. It said the 236 treaties covered trade, aviation and financial services, fisheries and the nuclear industry.
UK relations with most of the states that are party to the European Neighbourhood Policy (ENP)685 are, at least partially, mediated through that relationship. So ‘no deal’ would mean the UK would drop out of the Association Agreement with Ukraine, for example, and in addition to losing the EU-Ukraine Deep and Comprehensive Free Trade Area, it would not be able to participate any longer in EU-led stabilisation initiatives there.
In oral evidence to the International Trade Committee on 30 January 2019, Sarah Taylor, Director for International Agreements at the FCO, explained that the FCO is leading on the rollover of EU association agreements with Albania, Algeria, Bosnia, the Central Americas, Egypt, Georgia, Jordan, Kosovo, Lebanon, Macedonia, Moldova, Montenegro, Morocco, Serbia, Tunisia and Ukraine.
Although these agreements contain a trade element, they also contain other political and co-operation areas of agreement, and it was decided that the FCO should lead on them “because of the breadth of the nature of
684 See Letter from Dr Liam Fox, Secretary of State for International Trade, to the Chair of the International Trade Committee, 4 February 2019.
685 The ENP seeks to link countries to the east and south of the territory of mainland Europe to the EU.
the relationships that those agreements represent”. In addition to these, the FCO is also leading on 11 political co-operation agreements relating to the support of human rights, democracy and security co-operation rather than trade.
Ms Taylor explained that the political co-operation agreements do not require rollover in the same way, as they are not treaty based and take a number of different forms, not all of which “has to be replicated in exactly the same way”.
Regarding the 16 association agreements, Ms Taylor said she was “confident that a number of those agreements will be signed in time for 29 March” but did “not have absolute confidence that every single agreement will be in place by 29 March” and it was “unlikely that all those agreements will be in place”. Ms Taylor explained that:
These discussions are ongoing. You will know that, through technical discussions, which are happening as we speak, things can become unblocked very quickly, discussions can move very fast and, equally, discussions where you think you are nearly there can throw up new legal questions that you need to go away and think about. I am not going to prejudice those discussions.686
In the absence of definitive information about the state of play of negotiations with third countries on the rollover of existing trade and other co-operation arrangements, the areas of co-operation covered and the Government’s assessment of which of the EU’s international treaties require replacement in order to avoid disruption of relations, it is difficult to assess whether the necessary arrangements will be in place by March 2019.
The impact of ‘no deal’ on trade agreements specifically is discussed in section 6.4.687
Government update on international agreements signed and nearly ready
On 25 January 2019, Brexit Secretary Steve Barclay wrote to the Chair of the Exiting the EU Committee and other Committee chairs attaching a list of bilateral agreements the Government has so far signed with third countries to replace existing EU international agreements, those that it expects to sign in the near future and those where the text is nearly finalised. In his letter Mr Barclay said:
As you will be aware, we have been working with third countries to identify which of the EU’s existing international agreements are relevant, important and need action as a result of our exit from the EU. Not all of these need action. This is for various reasons; some of these agreements have been superseded because they have been amended over time as the terms have changed or new countries have joined the EU; some are not applicable to the UK, and in some instances, we signed the agreement as a member in our own right
686 International Trade Committee Oral evidence: The impact of UK-EU arrangements on wider UK trade policy, HC 1549, 30 January 2019.
687 For further information, see House of Commons Briefing Paper 8370, UK adoption of EU external agreements after Brexit, 24 July 2018, and House of Commons International Trade Select Committee report on Continuing Application of EU trade agreements after Brexit published on 28 February 2018.
and so our membership will therefore continue. As a consequence, the number of replacement treaties is much lower than the full list on the EU Treaties database
The trade-related agreements signed/nearly ready to be signed or close to being finalised are listed in section 6.4. Other agreements on the list of signed deals include nuclear co-operation agreements with Australia, Canada, USA and the IAEA, and nine air services agreements (see section 16.2). Agreements that the UK intends to sign shortly include a further seven air services agreements. Among the agreements which the Government says is close to being finalised is the UK-EEA EFTA Citizens Rights’ Agreement, which it says will “largely seeks to preserve the terms of the EEA EFTA citizens’ rights element of the separation agreement, in a no deal scenario”.
The Government also listed multilateral agreements for which the UK is taking action to become an independent party. These include the Hague Conventions on the International Recovery of Child Support and Other Forms of Family Maintenance, and on Choice of Courts Agreements, various international fisheries conventions, the Agreement on Government Procurement (GPA), the Convention on a Common Transit Procedure (CTC) and the Interbus agreement.
According to the NAO report, Implementing the UK’s exit from the European Union. The Foreign & Commonwealth Office, April 2018, “Under a ‘no deal’ outcome with the EU the FCO will request a further £65 million for 2018-19” and possibly more to support some of the Overseas Territories. The report notes:
Having previously reduced the number of UK diplomats across the EU27, the FCO now intends to increase them in order to enhance its ability to engage bilaterally with member states. Although the FCO does not have reliable data on actual numbers, it is clear that the number of UK diplomats reduced substantially in the decade up to the EU referendum. To compensate for leaving the EU institutions the UK is increasing staffing numbers across the FCO’s Europe network in the EU27 member states. In March 2018, the FCO announced 250 new posts in its overseas network, including the Europe network.
Overseas aid spending
The EU has been one of the UK’s largest multilateral aid partners. We are still waiting to find out whether any UK aid will be channelled through the EU after Brexit. It is reasonable to anticipate that about 10% of the UK’s 2019/20 aid budget will potentially be available for reallocation after Brexit. This looks all but certain in the event of ‘no deal’.
The Government spent £884 million in aid through the EU in 2017, around 6% of all aid spending.688 If the UK stops contributing to all EU development activities, this will not result in it spending less money on aid (because it is legally obliged to continue to spend 0.7% of gross national income as aid
688 DFID, Statistics on International Development: Provisional UK Aid Spend 2017, 5 April 2018
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each year); it will, however, mean that this aid will have to be spent differently.
In the July 2018 White Paper on the future relationship between the UK and the EU, the UK Government proposed that the two parties make a series of cooperative accords, one of which would cover international development and international action.689 This would provide a framework under which the UK could continue to participate in EU activities, potentially including those which spend aid money. The EU does already have agreements with third countries covering specific aid programmes, implying that such collaboration is possible.
Current proposals for future EU development funding emphasise converting multiple funding streams into a single external action instrument, rather than the kind of openness and flexibility towards non-member states which the UK has said it would like to see. So, whether there is a deal or not, it remains unclear whether (and if so, how) the UK might participate in EU development activities in future as a third country.
In recent months, there has been concern that the European Commission may decide that UK-based humanitarian NGOs should be immediately ineligible to continue to receive EU funding in the event of a ‘no-deal’ Brexit. In response, the UK Government has pledged to cover any loss of EU funds by UK-based humanitarian NGOs acting as lead consortium partner or sole implementer of pre-existing programmes.
A more detailed explanation of the UK’s aid spending, and a discussion of the possible ways in which it could change after Brexit, are covered in a House of Commons Library briefing paper, UK aid: frequently asked questions.
16.4 External security
Foreign and defence policy
With no deal the UK would lose access to Common Foreign and Security Policy (CFSP) decision-making mechanisms used to co-ordinate joint responses to foreign policy challenges across all EU Member States. A recent example is the EU response to the Skripal assassination attempt, when the EU recalled its ambassador from Moscow, and EU Member States, as well as NATO partners and the US, ordered the expulsion of Russian diplomats. There are also questions around intelligence sharing, if there is no legal mechanism in place to share classified information (as discussed in section 14 above).
But the implications of ‘no deal’ for UK defence policy and the UK armed forces would be arguably relatively limited.
Successive Governments have stated that NATO is the cornerstone of European defence and security, supported by a network of strong multilateral and bilateral alliances and partnerships of which the UK is a participant, including permanent membership of the UN Security Council. From the UK’s perspective the EU has instead been a notable ‘soft power’
689 DExEU, The future relationship between the United Kingdom and the European Union, 12 July 2018
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actor, focusing on crisis prevention, crisis management and post-conflict stabilisation. In terms of military capabilities the UK could also be considered a net contributor to the EU.
Were the UK to leave with EU with ‘no deal’, the most immediate implication would be that that UK would no longer be able to participate in CSDP missions, the EU battlegroups or in organisations such as the European Defence Agency (EDA). All military personnel deployed on EU-led operations, such as Operation Althea in Bosnia, would have to return to the UK, along with all UK military staff seconded to the EU.691 Yet, the UK’s ability to project military power would arguably remain largely unaffected at this time. ‘Hard’ power would continue to be the purview of NATO or ‘coalitions of the willing’; while any shortfalls in soft power projection could be compensated for through other multilateral or bilateral frameworks.
In terms of capability development, the UK would no longer be able to participate in the European Defence Agency, or any projects currently underway under the remit of the European Defence Research Programme (which is part of the European Defence Fund).692 Even during the proposed transitional period, the UK could already be excluded from certain EU-funded research & development projects related to defence because of their ’sensitive’ nature.
In the longer term, however, and regardless of a ‘no deal’ scenario, the UK could seek to re-negotiate its participation in EU military operations via a third party framework agreement, in much the same way that the United States, Canada and Norway have.693 The same is true of the European Defence Agency,694 and the European Defence Fund, although under current assumptions third country access to the European Defence Fund
690 The UK is one of the largest and most advanced military powers in the EU in terms of manpower, assets, capabilities and defence spending. It currently provides 20% of the EU’s force catalogue, including strategic enablers such as airlift, refuelling and intelligence surveillance and reconnaissance. It is also one of only five EU countries capable of deploying an operational HQ and therefore taking command of a mission. At present the UK provides the operational HQ of the CSDP mission Operation Atalanta. On the other hand, the UK contributes only 3-5% of CSDP spending (it varies a little depending on whether military only or civilian and military together are taken into account.
691 It would also no longer be able to provide the operational headquarters of Operation Atalanta, although this would also be the case under any withdrawal agreement.
692 The UK is currently part of the Pythia project and Ocean 2020 project. The ‘capability’ strand of the EDF (the European Defence Industrial Development Programme) is currently being established, with a view to the first projects being financed from 2019. Third party arrangements allowing access to the fund are currently being negotiated and would be relevant to Brexit regardless. The UK is also not currently part of Permanent Structured Cooperation (PESCO). Details on all of these initiatives is available in Library Briefing Paper CBP 8216, European defence: where is it heading?
693 As a result, Canada and Norway have both contributed forces to Operation Althea in Bosnia, Canada has provided personnel for EU police Missions in Bosnia and the Democratic Republic of Congo, while Norway has contributed assets to Operation Atalanta (EUNAVFOR) and has provided forces to the EU Nordic Battlegroup.
694 In 2006 Norway, for example, signed an administrative agreement with the EDA which allows it to participate in the Agency’s research and technology projects. Switzerland also has a similar cooperation agreement. Under current Brexit discussions the UK will still have to conclude an Administrative Agreement with the EDA to continue participating in specific EDA capability projects.
will be tightly controlled and therefore the impact on the UK will be the same whether it leaves the EU with an agreement or not.
Indeed, in the event of a ‘no deal’, and were the UK to pursue third country agreements in the longer term, then the majority of the negotiations and debate would centre around exactly the same discussions which are happening now with respect to Brexit. Yet, the political will of the EU27 to positively engage with the UK in such negotiations following a ‘no deal’ scenario is debatable. As a result the process could be lengthy, and the terms of engagement could be less favourable.
There is a school of thought which would argue that, in defence terms at least, the EU needs the UK. And given recent shifts in the international security environment, the increasing belligerence of Russia and a US President who appears to have very little time for European security or the US’ European allies, engaging the UK as a third country participant in CSDP regardless of a no deal scenario may not be so unappealing. There is another view that it could be helpful for the UK to be leaving, after years of blocking developments such as an Operational Headquarters.695
But there are also non-EU initiatives afoot, such as French President Macron’s European Intervention Force proposal, in which the UK could take part whether or not there’s a Withdrawal Agreement, if there is sufficient political will.696
A no-deal Brexit seems not to have been discussed during debates on the Sanctions and Anti-Money laundering Bill.
The UK Government currently imposes sanctions and updates the anti-money laundering (AML) regime using powers in the European Communities Act 1972 (ECA) and other instruments such as the Export Control Order 2008 and the Immigration Act 1971. The powers under the ECA will disappear on exit day under the EU(Withdrawal) Act and the commencement of provisions under the Sanctions and Anti-Money Laundering Act , which gives the UK Government new powers not dependent on EU membership.
A no-deal Brexit would give the UK Government the immediate freedom to implement regulations that differ from the EU’s. Sanctions and AML regimes are, however, usually coordinated internationally (depending on the regime), for example at G7 meetings, by UN resolution, or following decisions by the international Financial Action Task Force. The freedom to impose unilateral UK rules is unlikely to be exercised very often. The Government has in any case repeatedly insisted – including during the debate following the statement on 5 September 2018 on the Salisbury Skripal investigation – that it intends to keep aligning its sanctions policy with the EU’s. This is unlikely to change in a no-deal scenario.
695 A decision to establish an EU Military Planning and Conduct Capabilities (MPCC) unit to run “non-executive” training missions in parts of Africa was adopted in June 2017, having been blocked by the UK Government, which objected to the use of the term ‘operation headquarters’.
696 See Guardian, Nine EU states sign off on joint military intervention force, 25 June 2018.
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On 12 October 2018 the Government published guidance on sanctions policy if there’s no Brexit deal, which it updated on 1 February 2019. The guidance stated that the UK would carry over all existing EU sanctions, mostly in the form of regulations using the powers in the Sanctions Act. Many of the necessary regulations would be put before Parliament before March 2019 to prepare for the possibility of a no-deal exit.
Any sanctions regimes that had not been carried over using the Sanctions Act would become retained EU law through the powers in the EU (Withdrawal) Act, meaning that there would be no gaps.