Analysis 3 of the Revised Brexit Withdrawal Agreement: Dispute settlement

Professor Steve Peers, University of Essex

Introduction

What does the revised Brexit withdrawal agreement say about dispute settlement, including the rule of the Court of Justice of the European Union (CJEU)? This is the third in a series of updated blog posts about the revised agreement, which consists of a revised Protocol on the Irish border (for a full text of the revised withdrawal agreement following this change, see here) and a revised political declaration on the future relationship.  The previous posts contained an overview of the agreement and examined the transition period. (Update: a later fourth post analysed citizens’ rights and a fifth post analysed the revised political declaration on the future relationship). This is an update of a blog post published last year, concerning the earlier version of the withdrawal agreement.

The issue of dispute settlement, in particular the continued jurisdiction of the Court of Justice of the European Union (CJEU) regarding the UK, has been contentious. This blog post first presents an overview of the issue, and then a detailed annotation of all the provisions in the withdrawal agreement relating to dispute settlement and the CJEU.

Background: CJEU and WTO dispute settlement

The drafters of the withdrawal agreement refer to existing CJEU jurisdiction several times, and the dispute settlement provisions are broadly similar to the dispute settlement rules of the World Trade Organisation (WTO). So I’ll explain here the basics of the two systems for the benefit of non-specialists.

The CJEU’s most important jurisdiction – set out in Article 267 TFEU – is over preliminary rulings from national courts on the interpretation or validity of EU law. For example, see the Wightman case on whether the Article 50 notification can be reversed, discussed here. In that case, a Scottish court paused its proceedings, asked the CJEU to answer questions about Article 50, and then now resumed its proceedings in light of the Court’s reply. 

The Court also has jurisdiction over direct challenges to the validity acts of the EU institutions or other bodies (Article 263 TFEU). For example, see the recent Shindler case in which UK citizens living in EU27 countries challenged the validity of the EU Council’s decision to start negotiations for the withdrawal agreement, discussed here. Finally, the Court’s other important jurisdiction is over infringement actions against Member States which have allegedly violated EU law, usually brought by the EU Commission (Article 258 TFEU; see also Article 260 TFEU, which mainly concerns fines for non-compliance with a prior judgment determining an infringement of EU law).

As for the WTO, the dispute settlement rules allow any WTO Member to bring a complaint against any other WTO Member for an alleged breach of WTO rules eventually to a panel of trade experts. The panel’s findings can be appealed by either side (or both sides, if they each are unhappy about different parts of the findings) to the WTO’s Appellate Body (although this Body’s work is currently slowed down by the US government’s objections to aspects of the WTO’s functioning).

If, at the end of this process, a WTO Member is found to have breached WTO rules, it has a “reasonable period of time” to comply with the ruling against it, by bringing its law in line with its WTO obligations. If there’s a dispute about how long the “reasonable period of time” should be, that can be settled by arbitration. If the losing Member then indisputably complies with the ruling in time, that’s fine. If not, then the losing Member can agree on alternative compensation with the winning Member (which could be, say, reducing its tariffs on another product which the winning Member exports a lot of to the losing Member).

Failing that, the winning Member can retaliate against the losing Member by imposing trade sanctions, as long as they are equivalent to its losses due to the losing Member’s breach of WTO law. If there are disputes about whether such retaliation really is equivalent to the losses or goes “over the top”, the issue can go to arbitration. Finally, if there is an argument as to whether the losing Member has complied with the WTO ruling or not, in practice that dispute can go to arbitration as well.  

Overview

The crucial point is that most of the UK’s obligations under the withdrawal agreement end when the transition period ends. Under the agreement, that period ends at the end of 2020, with a possible extension of one or two years. After that point, the UK’s obligations mainly relate to: (a) pending cases and proceedings being wrapped up; (b) the acquired rights of EU27 citizens who lived in the UK before the end of the transition period (with matching provisions for UK citizens in the EU27 States); (c) the provisions on Northern Ireland; and (d) remaining sums under the financial settlement.

 

First of all, the withdrawal agreement says that the EU law principles of “direct effect” and “supremacy” in EU law still apply, to the extent that the UK is still bound by EU law. (Remember, most of those obligations end when the transition period ends). The UK is also bound by CJEU judgments delivered before the end of the transition period. In the case of judgments delivered afterward, it only has to take “due regard” of them.

During the transition period, the Court’s normal rules apply to the UK. After that, the withdrawal agreement sets out rules on jurisdiction for the CJEU in cases pending at the end of the transition period, as well as cases linked to events which took place before the end of the transition period. 

There is also special jurisdiction over citizens’ rights (for eight years after the end of the transition period), for disputes over EU budget legislation, and for cases concerning parts of the Irish border protocol and the whole protocol on UK army bases in Cyprus.    

The core of the dispute settlement system in the withdrawal agreement sets out an arbitration process for resolving disputes that cannot be settled by discussion. This process is broadly similar to the WTO dispute settlement rules described above. However, it may involve the CJEU where EU law issues are involved. This was, however, an unavoidable legal “red line” for the EU side, as the case law of the CJEU provides that only the EU courts can give an interpretation of EU law that binds the EU institutions or Member States (see, for instance, Opinion 1/92).

Note that this does not give the CJEU jurisdiction to settle disputes concerning the entire agreement, as some have wrongly claimed; its jurisdiction here is limited to EU law issues. But the nature of the agreement is such that it is possible that a lot of the issues being disputed concern will concern the interpretation of EU law.

Note that there are different dates of entry into force and termination for these provisions. I’ve set out a time frame below which summarises in one place when each type of dispute settlement rule starts and stops, and which aspect of CJEU jurisdiction is applicable.

Comments

For those who loathe the existence of the CJEU, the withdrawal agreement may be a disappointment, for it does not immediately end the Court’s jurisdiction over the UK. However, as noted above, most of that jurisdiction ends when the transition period ends, with the Court’s remaining role after that point concerning either: (a) pending proceedings or cases; (b) special jurisdiction (citizens’ rights, EU budget legislation, parts of the Irish border protocol, and the protocol on Cyprus); and (c) a possible role in the arbitration process.

Much of this jurisdiction will be wound up too: there’s an eight-year time limit (starting from the end of the transition period) for the Court’s jurisdiction over citizens’ rights; the pending cases and budget legislation issues will wind down naturally; and the Irish border protocol might be replaced by a future treaty. Moreover, not all of this jurisdiction relates to the UK courts and setting aside UK law, which is the most sensitive issue for some.

In particular, despite the role of the CJEU in some arbitration cases, the arbitration process as a whole is based on general international law, not EU law; the Court of Justice is not answering in such cases to national  courts applying EU law in proceedings before them.  Furthermore, it should be noted that the UK government successfully obtained amendments to much of the dispute settlement text as proposed by the Commission: replacing the CJEU with arbitration as much as legally possible as regards the main dispute settlement provisions; limiting the Court’s jurisdiction over pending cases; and denying any special jurisdiction for the Court as regards the “separation provisions” in the withdrawal agreement (ie what happens to European Arrest Warrants issued by the UK to request arrest and surrender of fugitives in the EU27, or vice versa, if those warrants have not been executed already by the end of the transition period).

Like everything else in the withdrawal agreement, the role of the CJEU is a complex compromise, in which the links with the EU are essentially unchanged during the transition period but are curtailed significantly after that – and then continue to diminish further.  

Time Frame

-          During transition period (end of 2020, possibly extended): ordinary jurisdiction of the CJEU (Article 131)

-          Pending cases at end transition: all types of cases, if they reached the CJEU beforehand (Article 86)

-          New cases after transition:

-          a) Infringement proceedings (four-year time limit) if UK allegedly breached EU law before end of the transition period, or failed to enforce a ruling in an EU administrative proceeding pending before the end of the transition period, or relating to issues arising before the end of the transition period, but decided afterward (Article 87)

-          b) Annulment actions: challenges to administrative decisions taken concerning proceedings pending before the end of the transition period, or relating to issues arising before the end of the transition period, but decided afterward (Article 95(3))

-          c) EU27 citizens’ rights: preliminary rulings (eight-year time limit, starting from the end of the transition period) from UK courts (Article 158)

-          d) financial settlement: preliminary rulings and infringement proceedings (indefinitely) relating to EU budget legislation (Article 160)

-          e) reference from arbitration panel (indefinitely) (Article 174)

-          f) Northern Ireland protocol (Article 12(4)), full jurisdiction over parts of protocol (unless protocol is replaced)

-          g) Cyprus bases protocol (Article 12), full jurisdiction over protocol (indefinitely) 

-          Impact of CJEU judgments:

-          a) compliance with CJEU rulings on relevant EU law before end of the transition period (Article 4(4))

-          b) due regard for CJEU rulings on the agreement after the end of the transition period (Article 4(5))

-          c) continued compliance with CJEU rulings under Northern Ireland protocol (Article 15 of protocol), until protocol is replaced

Barnard & Peers: chapter 10, chapter 27

Photo credit: http://blog.mslgroup.com/eu-us-personal-data-transfer-after-the-european-court-ruling/

Annotation

CJEU and dispute settlement provisions in the Withdrawal Agreement

PART ONE

COMMON PROVISIONS

ARTICLE 4

Methods and principles relating to the effect, the implementation and the application of this Agreement

1. The provisions of this Agreement and the provisions of Union law made applicable by this Agreement shall produce in respect of and in the United Kingdom the same legal effects as those which they produce within the Union and its Member States. Accordingly, legal or natural persons shall in particular be able to rely directly on the provisions contained or referred to in this Agreement which meet the conditions for direct effect under Union law.

2. The United Kingdom shall ensure compliance with paragraph 1, including as regards the required powers of its judicial and administrative authorities to disapply inconsistent or incompatible domestic provisions, through domestic primary legislation.

3. The provisions of this Agreement referring to Union law or to concepts or provisions thereof shall be interpreted and applied in accordance with the methods and general principles of Union law.

4. The provisions of this Agreement referring to Union law or to concepts or provisions thereof shall in their implementation and application be interpreted in conformity with the relevant case law of the Court of Justice of the European Union handed down before the end of the transition period.

5. 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.

Comments: Article 4 does not confer any jurisdiction on the CJEU as such. However, it addresses two related issues: the legal effect of the agreement and the EU law it refers to, as well as the impact of CJEU case law. Its practical relevance will diminish over time, in particular when the transition period ends and the UK’s obligations under the agreement are hugely truncated. (See my overview of the entire agreement). As noted above, the transition period will end at the end of 2020, unless extended.

Article 4(1) retains the EU law principle of “direct effect”, as well as other principles on the legal effect of EU law, as regards the agreement itself and EU law made applicable by the agreement. (Note that Articles 2(a) and 6 define “Union law” for the purposes of the agreement).

Article 4(2) reflects the principle of supremacy of EU law, meaning that national measures incompatible with the withdrawal agreement will have to be disapplied by the courts. Due to its cross-reference to Article 4(1), it applies to the agreement itself and to EU law made applicable by the agreement.

Article 4(3) is a general provision, supplemented by the following two paras, on the interpretation of the EU law referred to in the agreement in conformity with EU law principles. (Again, note that Articles 2(a) and 6 define “Union law” for the purposes of the agreement).

Article 4(4) means that CJEU case law on the interpretation of the EU law referred to in the agreement up until the end of the transition/implementation period will be binding upon the UK. Again, Articles 2(a) and 6 define “Union law” for the purposes of the agreement. It is not clear if this provision will still have much effect (other than the citizens’ rights in Part Two, which refers extensively to EU law) after the end of the transition period, given that the scope of EU law binding the UK will be hugely reduced from that point.

Article 4(5) requires the UK to “have due regard” to CJEU case law on the agreement handed down after the end of the transition period. It differs from Article 4(4) as regards both the extent of the obligation and the law it refers to: the agreement, rather than the EU law referred to in it. 

Note that Article 13 of the Protocol on Northern Ireland applies even CJEU case law after the end of the transition period, within the context of that Protocol, as a derogation from Article 4. So does the protocol on military bases in Cyprus, discussed further below.

PART THREE

SEPARATION PROVISIONS

TITLE X

UNION JUDICIAL AND ADMINISTRATIVE PROCEDURES

CHAPTER 1

JUDICIAL PROCEDURES

ARTICLE 86

Pending cases before the Court of Justice of the European Union

1. The Court of Justice of the European Union shall continue to have jurisdiction in any proceedings brought by or against the United Kingdom before the end of the transition period. Such jurisdiction shall apply to all stages of proceedings, including appeal proceedings before the Court of Justice and proceedings before the General Court where the case is referred back to the General Court.

2. The Court of Justice of the European Union shall continue to have jurisdiction to give preliminary rulings on requests from courts and tribunals of the United Kingdom made before the end of the transition period. 

3. For the purposes of this Chapter, proceedings shall be considered as having been brought before the Court of Justice of the European Union, and requests for preliminary rulings shall be considered as having been made, at the moment at which the document initiating the proceedings has been registered by the registry of the Court of Justice or the General Court, as the case may be.

Comments: this regulates the position of cases pending before the CJEU concerning the UK at the end of the transition period. As discussed below, the Court’s usual jurisdiction applies during the transition period, and so this provision – like the other separation provisions in the agreement – sets out what happens at the end of that period to pending cases, namely that they continue to fall within the Court’s jurisdiction as long as they have been brought before the Court before the end of that period, as defined in para 3. Para 2 explicitly covers preliminary rulings requested by UK courts, and para 1 covers infringement actions against the UK and annulment actions brought by the UK.

ARTICLE 87

New cases before the Court of Justice

1. If the European Commission considers that the United Kingdom has failed to fulfil an obligation under the Treaties or under Part Four of this Agreement before the end of the transition period, the European Commission may, within 4 years after the end of the transition period, bring the matter before the Court of Justice of the European Union in accordance with the requirements laid down in Article 258 TFEU or the second subparagraph of Article 108(2) TFEU, as the case may be. The Court of Justice of the European Union shall have jurisdiction over such cases. 

2. If the United Kingdom does not comply with a decision referred to in Article 95(1) of this Agreement, or fails to give legal effect in the United Kingdom's legal order to a decision, as referred to in that provision, that was addressed to a natural or legal person residing or established in the United Kingdom, the European Commission may, within 4 years from the date of the decision concerned, bring the matter to the Court of Justice of the European Union in accordance with the procedural requirements laid down in Article 258 TFEU or the second subparagraph of Article 108(2) TFEU, as the case may be. The Court of Justice of the European Union shall have jurisdiction over such cases.

3. In deciding to bring matters under this Article, the European Commission shall apply the same principles in respect of the United Kingdom as in respect of any Member State.

Comments: This provision provides for limited jurisdiction for new cases to be brought after the end of the transition period, but this is dependent upon the dispute in question relating back to before the end of the transition period. Para 1 sets out this power in relation to infringement proceedings or actions relating to State aid (Article 108). But there is a four-year time limit from the end of the transition period to bring such cases. This time limit was added after the March 2018 draft of the withdrawal agreement, as was the reference to State aid proceedings. This limit was a victory for the UK.

Also the UK won a victory as regards preliminary rulings, as the March 2018 draft provided that cases pending in the UK courts at the end of the transition period which concerned EU law issues could still be sent to the CJEU for a preliminary ruling after that point. This prospect has disappeared entirely.

Para 2 concerns jurisdiction over infringement actions to enforce a final decision concerning an EU administrative proceeding which was pending at the end of the transition period, but where a decision was made afterward. Again, a four-year deadline was added.

ARTICLE 88

Procedural rules

The provisions of Union law governing the procedure before the Court of Justice of the European Union shall apply in respect of the proceedings and requests for preliminary rulings referred to in this Title. 

Comments: this applies the Treaty and rules of procedure regulating CJEU proceedings to all legal actions referred to in this Title (Articles 86-91). Article 267 TFEU preliminary rulings are mentioned explicitly.

ARTICLE 89

Binding force and enforceability of judgments and orders

1. Judgments and orders of the Court of Justice of the European Union handed down before the end of the transition period, as well as such judgments and orders handed down after the end of the transition period in proceedings referred to in Articles 86 and 87, shall have binding force in their entirety on and in the United Kingdom.

2. If, in a judgment referred to in paragraph 1, the Court of Justice of the European Union finds that the United Kingdom has failed to fulfil an obligation under the Treaties or this Agreement, the United Kingdom shall take the necessary measures to comply with that judgment.

3. Articles 280 and 299 TFEU shall apply in the United Kingdom in respect of the enforcement of the judgments and orders of the Court of Justice of the European Union referred to in paragraph 1 of this Article.

Comment: Some misconstrued this provision as giving the CJEU indefinite jurisdiction, but it clearly does not. It only refers to other jurisdiction in the agreement, as regards rulings made during the transition period (on which, see below), or after the transition period where the case was pending at the end of the transition period (Article 86), or related to disputes that go back to the transition period (Article 87).  As noted in the discussion of Article 158 below, it is a legal requirement stemming from CJEU case law that the Court’s judgments – to the extent it has jurisdiction – are always binding.

Paragraph 2 reflects the wording of Article 260(1) TFEU, which requires Member States to comply with judgments of the Court in infringement actions, finding that they have infringed EU law.

Article 280 TFEU simply provides that CJEU judgments are enforceable under the conditions set out in Article 299 TFEU, while Article 299 TFEU lays out the details of how EU measures are enforceable under national law.

ARTICLE 90

Right to intervene and participate in the procedure

Until the judgments and orders of the Court of Justice of the European Union in all proceedings and requests for preliminary rulings referred to in Article 86 have become final, the United Kingdom may intervene in the same way as a Member State or, in the cases brought before the Court of Justice of the European Union in accordance with Article 267 TFEU, participate in the procedure before the Court of Justice of the European Union in the same way as a Member State. During that period, the Registrar of the Court of Justice of the European Union shall notify the United Kingdom, at the same time and in the same manner as the Member States, of any case referred to the Court of Justice of the European Union for a preliminary ruling by a court or tribunal of a Member State.

The United Kingdom may also intervene or participate in the procedure before the Court of Justice of the European Union in the same way as a Member State:

(a) in relation to cases which concern a failure to fulfil obligations under the Treaties, where the United Kingdom was subject to the same obligations before the end of the transition period, and where such cases are brought before the Court of Justice of the European Union in accordance with Articles 258 TFEU before the end of the period referred to in Article 87(1) or, as the case may be, until the moment, after the end of that period, at which the last judgment or order rendered by the Court of Justice of the European Union on the basis of Article 87(1) has become final;

(b) in relation to cases which concern acts or provisions of Union law which were applicable before the end of the transition period to and in the United Kingdom and which are brought before Court of Justice of the European Union in accordance with Article 267 TFEU before the end of the period referred to in Article 87(1) or, as the case may be, until the moment, after the end of that period, at which the last judgment or order rendered by the Court of Justice on the basis of Article 87(1) has become final; and

(c) in relation to the cases referred to in Article 95(3).

Comment: the UK will be able to intervene or participate in cases as a non-EU state (see Article 23 of the CJEU Statute, which allows this already if a treaty between the EU and a non-EU State provides for it). This Article gives a lengthy time period for the UK to intervene in such cases: essentially until the last cases brought under Articles 86 or 87 of this agreement have been decided by the CJEU, or (point (c)) where a challenge to an EU administrative decision affecting the UK has been brought.

ARTICLE 91

Representation before the Court

1. Without prejudice to Article 88, where, before the end of the transition period, a lawyer authorised to practise before the courts or tribunals of the United Kingdom represented or assisted a party in proceedings before the Court of Justice of the European Union or in relation to requests for preliminary rulings made before the end of the transition period, that lawyer may continue to represent or assist that party in those proceedings or in relation to those requests. This right shall apply to all stages of proceedings, including appeal proceedings before the Court of Justice and proceedings before the General Court after a case has been referred back to it.

2. Without prejudice to Article 88, lawyers authorised to practise before the courts or tribunals of the United Kingdom may represent or assist a party before the Court of Justice of the European Union in the cases referred to in Article 87 and Article 95(3). Lawyers authorised to practise before the courts or tribunals of the United Kingdom may also represent or assist the United Kingdom in the proceedings covered by Article 90 in which the United Kingdom has decided to intervene or participate.

3. When representing or assisting a party before the Court of Justice of the European Union in the cases referred to in paragraphs 1 and 2, lawyers authorised to practise before the courts or tribunals of the United Kingdom shall in every respect be treated as lawyers authorised to practise before courts or tribunals of Member States representing or assisting a party before the Court of Justice of the European Union.

Comment: this preserves rights of audience of UK lawyers in relevant cases.

CHAPTER 2

ADMINISTRATIVE PROCEDURES

ARTICLE 95

Binding force and enforceability of decisions

1. Decisions adopted by institutions, bodies, offices and agencies of the Union before the end of the transition period, or adopted in the procedures referred to in Articles 92 and 93 after the end of the transition period, and addressed to the United Kingdom or to natural and legal persons residing or established in the United Kingdom, shall be binding on and in the United Kingdom.

2. Unless otherwise agreed between the European Commission and the designated national competition authority of the United Kingdom, the European Commission shall continue to be competent to monitor and enforce commitments given or remedies imposed in, or in relation to, the United Kingdom in connection with any proceedings for the application of Articles 101 or 102 TFEU conducted by the European Commission under Regulation (EC) No 1/2003 or proceedings conducted by the European Commission under Regulation (EC) No 139/2004 in connection with the control of concentrations between undertakings. If so agreed between the European Commission and the designated national competition authority of the United Kingdom, the European Commission shall transfer the monitoring and enforcement of such commitments or remedies in the United Kingdom to the designated national competition authority of the United Kingdom.

3. The legality of a decision referred to in paragraph 1 of this Article shall be reviewed exclusively by the Court of Justice of the European Union in accordance with Article 263 TFEU.

4. Article 299 TFEU shall apply in the United Kingdom in respect of the enforcement of decisions referred to in paragraph 1 of this Article that impose pecuniary obligations on natural and legal persons residing or established in the United Kingdom.

Comment: Articles 92 and 93 of the agreement give power to EU bodies to continue proceedings relating to the UK if those proceedings were launched before the end of the transition period (Article 92), or relate to events taking place before the end of the transition period, where there is a four-year period where the EU institutions may act (Article 93). This relates to competition, State aid, mergers, financial services regulation, and anti-fraud measures. Paragraph 1 makes decisions on the basis of those Articles binding. Those decisions can be challenged, according to para 3, on the basis of the annulment action jurisdiction in Article 263 TFEU.

Paragraph 2 gives continuing powers to the Commission to monitor the application of competition or mergers legislation, although there is an option to transfer that power to the relevant UK agency.

Paragraph 4 concerns the enforceability of decisions: as noted above, Article 299 TFEU lays out the details of how such decisions are enforceable under national law.

Article 87(2), discussed above, gives the Court jurisdiction on an infringement action if the UK does not give effect to decisions delivered pursuant to Article 95. Article 90(c) provides for rights of intervention for the UK if there are legal challenges under Article 95(3). 

PART FOUR

TRANSITION

ARTICLE 131

Supervision and enforcement

During the transition period, the institutions, bodies, offices and agencies of the Union shall have the powers conferred upon them by Union law in relation to the United Kingdom and to natural and legal persons residing or established in the United Kingdom. In particular, the Court of Justice of the European Union shall have jurisdiction as provided for in the Treaties.

The first paragraph shall also apply during the transition period as regards the interpretation and application of this Agreement.

Comments: the ordinary jurisdiction of the CJEU will apply to the UK during the transition period. As noted already, this period will last until the end of 2020, except a single decision can extend it by one or two years (Article 132). The issue of what happens if cases are pending at the end of that period is addressed by Articles 86-91, discussed above. The position during the transition period differs in that the UK does not have any judges or Advocates-General on the EU courts (see Article 7 of the agreement).

PART SIX

INSTITUTIONAL AND FINAL PROVISIONS

TITLE I

CONSISTENT INTERPRETATION AND APPLICATION

ARTICLE 158

References to the Court of Justice of the European Union concerning Part Two

1. Where, in a case which commenced at first instance within 8 years from the end of the transition period before a court or tribunal in the United Kingdom, a question is raised concerning the interpretation of Part Two of this Agreement, and where that court or tribunal considers that a decision on that question is necessary to enable it to give judgment in that case, that court or tribunal may request the Court of Justice of the European Union to give a preliminary ruling on that question. However, where the subject matter of the case before the court or tribunal in the United Kingdom is a decision on an application made pursuant to Article 18(1) or (4) or pursuant to Article 19, a request for a preliminary ruling may be made only where the case commenced at first instance within a period of 8 years from the date from which Article 19 applies.

2. The Court of Justice of the European Union shall have jurisdiction to give preliminary rulings on requests pursuant to paragraph 1. The legal effects in the United Kingdom of such preliminary rulings shall be the same as the legal effects of preliminary rulings given pursuant to Article 267 TFEU in the Union and its Member States.

3. In the event that the Joint Committee adopts a decision under Article 132(1), the period of eight years referred to in the second subparagraph of paragraph 1 shall be automatically extended by the corresponding number of months by which the transition period is extended.

Comments: As noted already, the transition period will end at the end of 2020, unless there is a single decision to extend that period by one or two years. Para 3 makes clear that if the transition period is extended, the 8-year special jurisdiction for the CJEU will start running from the later date. “Part Two” refers to the provisions on citizens’ rights, which only apply from the end of the transition period (see Article 185).

The Court’s jurisdiction is slightly less than it is under Article 267 TFEU in that final courts in the UK are not obliged as a rule to refer cases under this Article, whereas they are under Article 267 TFEU. However, the legal effects of such rulings are the same as under Article 267, ie binding and setting aside conflicting national law (see also Article 4, discussed above). It would not have been legally possible to provide for non-binding jurisdiction of the CJEU, because the CJEU has ruled that its judgments (where its jurisdiction exists) must always be binding, even as regards non-EU states (see Opinion 1/91, para 38). It is implicit that the Court’s other jurisdiction (notably on infringement proceedings) will not apply.

As noted already, according to Article 185, this provision – and the whole of Title I of Part Six (Articles 158 to 163) will only apply from the end of the transition/implementation period. That temporal limitation appears in the text of Article 158, but not Articles 159 to 163.

As the Court’s jurisdiction will explicitly apply as long as a case was first brought before the UK courts before the end of the eight-year period, it is necessarily implicit that it will retain jurisdiction to rule on cases pending at the end of that period even if it has not ruled (or been asked to rule) on such cases at that point. (Compare with Article 86, discussed above).

It should be noted that there is no time limit on the CJEU’s jurisdiction to rule on the application of this agreement as regards UK citizens in the EU27, if the national courts in the EU27 ask for a ruling. Nor is there any other limit on its jurisdiction relating to UK citizens in the EU27 (ie final courts will in principle have to send cases concerning them to the CJEU; infringement proceedings can apply).

As the UK’s notice on ‘no deal’ implications for EU27 citizens (discussed here) observes, the CJEU would have no jurisdiction on EU27 citizens in the UK if the withdrawal agreement is not ratified. As I discuss in the other blog post, there would in that scenario be fewer EU law rules applicable to UK citizens in the EU27.

ARTICLE 159

Monitoring of the implementation and application of Part Two

1. In the United Kingdom, the implementation and application of Part Two shall be monitored by an independent authority (the "Authority") which shall have powers equivalent to those of the European Commission acting under the Treaties to conduct inquiries on its own initiative concerning alleged breaches of Part Two by the administrative authorities of the United Kingdom and to receive complaints from Union citizens and their family members for the purposes of conducting such inquiries. The Authority shall also have the right, following such complaints, to bring a legal action before a competent court or tribunal in the United Kingdom in an appropriate judicial procedure with a view to seeking an adequate remedy.

2. The European Commission and the Authority shall each annually inform the specialised Committee on citizens' rights referred to in point (a) of Article 165(1) on the implementation and application of Part Two in the Union and in the United Kingdom, respectively. The information provided shall, in particular, cover measures taken to implement or comply with Part Two and the number and nature of complaints received.

3. The Joint Committee shall assess, no earlier than 8 years after the end of the transition period, the functioning of the Authority. Following such assessment, it may decide, in good faith, pursuant to point (f) of Article 164(4) and Article 166, that the United Kingdom may abolish the Authority.

Comments: The Authority will have power to: a) “to receive complaints from Union citizens and their family members”; b) “to conduct inquiries on its own initiative concerning alleged breaches” of the rules by UK “administrative authorities”; and c) to “bring a legal action before a competent court or tribunal in the United Kingdom in an appropriate judicial procedure with a view to seeking adequate remedy”, if it believes that the administration does not react appropriately. Implicitly it will not be able to make its own binding decisions on complaints brought to it.

Some text was deleted from the first draft of this Article, which had also provided that the Authority was “without prejudice” to other remedies. But such other remedies remain available, in light of the express wording of the citizens’ rights provisions on remedies, as well as Article 158. The final draft also dropped text saying that: the authority “may make its findings public”; it “shall inform” the Commission on legal actions and “may consult” it beforehand; the Commission may also suggest that the authority brings such actions.

If the withdrawal agreement is ratified, the UK Bill to implement it might go into more details about the Authority, including guarantees of independence, staff and funding. It may also be necessary to address what happens if the authority gives a disappointing reply to a complaint, or fails to reply within a reasonable time. Is there a remedy against the authority in that case? Must its decisions be reasoned? There are also questions of whether there will be time limits upon bringing complaints, or upon the authority bringing legal proceedings. The authority does not appear to have the power to bring proceedings as regards general changes to the law, or to comment on them. It seems to have the discretion whether to make its proceedings public. It is not clear that the authority’s power to bring proceedings can lead to a remedy directly for the complainant; and it would be useful if the authority could submit observations in cases which it didn’t bring itself, by analogy with Articles 161 and 162.

Substantively, the definition of “family members” logically entails an implied cross-reference to the definition in Article 9, in light of the reference to Part Two. “Union citizens” are defined in Article 2, which applies to the entire agreement.

Note that according to Article 185, this provision will only apply from the end of the transition/implementation period.  This is problematic, since even though Part Two will not apply until the end of the transition period, the UK will be rolling out a “settled status” scheme well before that time (indeed, even before Brexit day), and EU27 nationals may need the assistance this body will offer as soon as possible.

Note that the UK’s notice on “no deal” implications for EU27 citizens (discussed here) is silent on the question of whether this Authority would still be set up in a no deal scenario. There would be no legal obligation to do so, but the UK could choose to set an Authority up unilaterally.

ARTICLE 160

Jurisdiction of the Court of Justice of the European Union concerning certain provisions of Part Five

Without prejudice to Article 87 of this Agreement, Articles 258, 260, and 267 TFEU shall apply in respect of the interpretation and application of applicable Union law referred to in Article 136 and Article 138(1) or (2) of this Agreement. To this effect, any reference made in Articles 258, 260, and 267 TFEU to a Member State shall be understood as including the United Kingdom.

Comment: This gives the CJEU its jurisdiction as regards infringement actions and preliminary rulings over cases concerning the references to EU budget law in Part Five (financial settlement), which will still apply after the end of the transition/implementation period to the extent that payments are made after that date, which will diminish over time. Compared to the earlier drafts, continued jurisdiction over the separation provisions (Part Three) was dropped from this Article.

According to Article 185, this provision will only apply from the end of the transition period. As noted above, the Court’s ordinary jurisdiction will apply up until to the end of that period. Unlike Article 158, there is no time limit on the jurisdiction in this Article, but as noted already, this jurisdiction will become less relevant over time.

The cross-reference to Article 87 covers cases brought for a limited period after the end of the transition period, if they related to events before that deadline (see discussion above) which the CJEU will still have jurisdiction to decide.

ARTICLE 161

Procedures before the Court of Justice of the European Union

1. Where a court or tribunal of a Member State refers a question concerning the interpretation of this Agreement to the Court of Justice of the European Union for a preliminary ruling, the decision of the national court or tribunal containing that question shall be notified to the United Kingdom.

2. The provisions of Union law governing procedures brought before the Court of Justice of the European Union in accordance with Article 267 TFEU shall apply mutatis mutandis to requests for a ruling of the Court of Justice of the European Union made pursuant to Article 158 of this Agreement.

The provisions of Union law governing the procedure before the Court of Justice of the European Union shall apply in respect of the proceedings before the Court of Justice of the European Union and requests for preliminary rulings made in accordance with Article 160 of this Agreement.

3. In the cases brought before the Court of Justice of the European Union in accordance with paragraph 1 and Articles 158 and 160 of this Agreement and Article 12 of the Protocol on the Sovereign Base Areas:

(a) the United Kingdom may participate in the proceedings before the Court of Justice of the European Union in the same way as a Member State;

(b) lawyers authorised to practise before the courts or tribunals of the United Kingdom shall be entitled to represent or assist any parties to such proceedings before the Court of Justice of the European Union; in such cases those lawyers shall in every respect be treated as lawyers authorised to practise before courts of Member States representing or assisting a party before the Court of Justice of the European Union.

Comment: this Article is similar to Articles 90 and 91, discussed above, which give the UK rights to participate in proceedings and UK lawyers a right of audience in relevant cases.

ARTICLE 162

Participation of the European Commission in cases pending in the United Kingdom

Where the consistent interpretation and application of this Agreement so requires, the European Commission may submit written observations to the courts and tribunals of the United Kingdom in pending cases where the interpretation of the Agreement is concerned. The European Commission may, with the permission of the court or tribunal in question, also make oral observations. The European Commission shall inform the United Kingdom of its intention to submit observations before formally making such submissions.

Comments: This Article was expanded in scope compared to the March 2018 draft, when it only referred to Part Two on citizens’ rights. According to Article 185, this provision will only apply from the end of the transition period. However, it will not expire after any particular period, although the number of cases concerning the Agreement in the UK courts is likely to be much less after the end of the transition period, due to the hugely reduced scope of obligations for the UK.

As far as I know this explicit power to intervene in a national court proceeding is novel, although it could be compared to the Commission’s power to make observations in EFTA Court proceedings. It overlaps with the Authority’s power to bring cases on citizens’ rights (Article 159), and (for a number of years) with the UK courts’ ability to ask the CJEU questions about the citizens’ rights in Part Two, or the budget legislation referred to in Article 160.

ARTICLE 163

Regular dialogue and exchange of information

In order to facilitate the consistent interpretation of this Agreement and in full deference to the independence of courts, the Court of Justice of the European Union and the United Kingdom's highest courts shall engage in regular dialogue, analogous to the dialogue in which the Court of Justice of the European Union engages with the highest courts of the Member States.

Comments: this provision is not limited in time (although it only applies from the end of the transition period, according to Article 185), or the specific parts of the agreement.

TITLE III [of Part Six]

DISPUTE SETTLEMENT

ARTICLE 167

Cooperation

The Union and the United Kingdom shall at all times endeavour to agree on the interpretation and application of this Agreement, and shall make every attempt, through cooperation and consultations, to arrive at a mutually satisfactory resolution of any matter that might affect its operation.

Comment: This is a “best endeavours” Article that points toward trying to find political solutions to disputes. It does not include any specific legal obligations but could nevertheless be relevant in practice, given that disputes under the EU’s free trade agreements are usually settled diplomatically.

In accordance with Article 185, it applies as soon as the agreement enters into force, with no time limit on its application.

ARTICLE 168

Exclusivity

For any dispute between the Union and the United Kingdom arising under this Agreement, the Union and the United Kingdom shall only have recourse to the procedures provided for in this Agreement. 

Comment: This Article prevents using other means besides those in the agreement to settle disputes, unless the agreement itself is amended. In accordance with Article 185, it applies as soon as the agreement enters into force, with no time limit on its application.

ARTICLE 169

Consultations and communications within the Joint Committee

1. The Union and the United Kingdom shall endeavour to resolve any dispute regarding the interpretation and application of the provisions of this Agreement by entering into consultations in the Joint Committee in good faith, with the aim of reaching a mutually agreed solution. A party wishing to commence consultations shall provide written notice to the Joint Committee.

2. Any communication or notification between the Union and the United Kingdom provided for in this Title shall be made within the Joint Committee.

Comment: the starting point for dispute settlement is discussions in the Joint Committee, with a view to reaching a political settlement. This is comparable to consultations under Article 4 of the WTO Dispute Settlement Understanding. It is not clear what precise legal powers the Joint Committee would be exercising as regards dispute settlement, however.

In accordance with Article 185, this Article, and the remaining dispute settlement provisions, apply from the end of the transition period, with no time limit on their application.

ARTICLE 170

Initiation of the arbitration procedure

1. Without prejudice to Article 160, if no mutually agreed solution has been reached within 3 months after a written notice has been provided to the Joint Committee in accordance with Article 169(1), the Union or the United Kingdom may request the establishment of an arbitration panel. Such request shall be made in writing to the other party and to the International Bureau of the Permanent Court of Arbitration. The request shall identify the subject matter of the dispute to be brought before the arbitration panel and a summary of the legal arguments in support of the request.

2. The Union and the United Kingdom may agree that the establishment of an arbitration panel may be requested before the expiry of the time limit laid down in paragraph 1.

Comment: once a dispute has been brought to the Joint Committee but has not been settled within three months, either party can send it to arbitration. Before that point, the two parties can jointly agree to send it to arbitration. This is different from the March 2018 draft, where the same time limits applied, but the CJEU would have had jurisdiction, not arbitrators. 

This Article is comparable to Article 6 of the WTO Dispute Settlement Understanding, where there is a right to a panel to settle disputes within a specified period of time.

In the previous version of the withdrawal agreement, a  large part of the ‘level playing field’ rules (as regards tax, environmental law, employment law and competition law) in the previous Annex 4 to the Protocol on Northern Ireland were excluded from the scope of Articles 170-181, with the consequence that there were limited means of enforcing them. However, this is a moot point under the revised withdrawal agreement, since these provisions have been deleted.

ARTICLE 171

Establishment of the arbitration panel

1. The Joint Committee shall, no later than by the end of the transition period, establish a list of 25 persons who are willing and able to serve as members of an arbitration panel. To that end, the Union and the United Kingdom shall each propose ten persons. The Union and the United Kingdom shall also jointly propose five persons to act as chairperson of the arbitration panel. The Joint Committee shall ensure that the list complies with these requirements at any moment in time.

2. The list established pursuant to paragraph 1 shall only comprise persons whose independence is beyond doubt, who possess the qualifications required for appointment to the highest judicial office in their respective countries or who are jurisconsults of recognised competence, and who possess specialised knowledge or experience of Union law and public international law. That list shall not comprise persons who are members, officials or other servants of the Union institutions, of the government of a Member State, or of the government of the United Kingdom.

3. An arbitration panel shall be composed of five members. 

4. Within 15 days of the date of a request in accordance with Article 170, the panel shall be established in accordance with paragraphs 5 and 6.

5. The Union and the United Kingdom shall each nominate two members from among the persons on the list established under paragraph 1. The chairperson shall be selected by consensus by the members of the panel from the persons jointly nominated by the Union and the United Kingdom to serve as a chairperson. In the event that the members of the panel are unable to agree on the selection of the chairperson within the time limit laid down in paragraph 4, the Union or the United Kingdom may request the Secretary-General of the Permanent Court of Arbitration to select the chairperson by lot from among the persons jointly proposed by the Union and the United Kingdom to act as chairperson.

6. The Secretary-General of the Permanent Court of Arbitration shall make the selection referred to in second subparagraph of paragraph 5 within 5 days of the request referred to in paragraph 5. Representatives of the Union and of the United Kingdom shall be entitled to be present at the selection.

7. The date of establishment of the arbitration panel shall be the date on which the selection procedure is completed. 

8. In the event that the list referred to in paragraph 1 has not been established by expiry of the time limit laid down in paragraph 4, the Union and the United Kingdom shall within 5 days each nominate two persons to serve as members of the panel. If persons have been proposed under paragraph 1, the nominations shall be made from among those persons. The chairperson shall then be appointed in accordance with the procedure set out in paragraph 5. In the event that the Union and the United Kingdom have not, within a further 5 days, jointly proposed at least one person to serve as chairperson, the Secretary-General of the Permanent Court of Arbitration shall within five days, after consultation with the Union and the United Kingdom, propose a chairperson who fulfils the requirements of paragraph 2. Unless either the Union or the United Kingdom objects to that proposal within 5 days, the person proposed by the Secretary-General of the Permanent Court of Arbitration shall be appointed.

9. In the event of failure to establish an arbitration panel within 3 months from the date of the request made pursuant to Article 170, the Secretary-General of the Permanent Court of Arbitration shall, upon request by either the Union or the United Kingdom, within 15 days of such request, after consultation with the Union and the United Kingdom, appoint persons who fulfil the requirements of paragraph 2 of this Article to constitute the arbitration panel.

Comments: This Article is comparable to Article 8 of the WTO Dispute Settlement Understanding, although there are different ‘tie-break’ rules as regards the final arbitrator, the qualifications are different, and there are five arbitrators instead of the usual three WTO panellists.

ARTICLE 172

Rules of procedure

Dispute settlement procedures set out in this Title shall be governed by the rules of procedure set out in Part A of Annex IX ("Rules of Procedure"), the Joint Committee shall keep the functioning of those dispute settlement procedures under constant review and may amend the Rules of Procedure.

Comments: Appendix 3 to the WTO Dispute Settlement Understanding, referred to in Article 12 of the DSU, similarly sets out working procedures for dispute settlement panels.

ARTICLE 173

Time-frame of the procedure before the arbitration panel

1. The arbitration panel shall notify its ruling to the Union, the United Kingdom and the Joint Committee within 12 months from the date of establishment of the arbitration panel. Where the arbitration panel considers that it cannot comply with this time limit, its chairperson shall notify the Union and the United Kingdom in writing, stating the reasons for the delay and the date on which the panel intends to conclude its work.

2. Within 10 days of the establishment of the arbitration panel the Union or the United Kingdom may submit a reasoned request to the effect that the case is urgent. In that case, the arbitration panel shall give a ruling on the urgency within 15 days from the receipt of such request. If it has determined the urgency of the case, the arbitration panel shall make every effort to notify its ruling to the Union and the United Kingdom within 6 months from the date of its establishment.

Comments: para 1 can be compared to Article 12(8) and (9) of the DSU, and even copies some of the wording of Article 12(9). The WTO rules say that panels must report within six months, with a maximum extension to nine months. These deadlines are not always kept, which may explain why the withdrawal agreement provides for more flexibility: a 12-month deadline, with no absolute deadline if the arbitrators fail to meet it.

Paragraph 2 can also be compared to Article 12(8) and (9) of the DSU, which set a three-month deadline for urgent cases, with a possible extension to nine months. The six-month deadline for urgent cases in the withdrawal agreement is more flexible, especially since the deadline is not absolute (“shall make every effort”).

Note that Article 174(3) suspends the time limits in this Article if a case is referred to the CJEU.

ARTICLE 174

Disputes raising questions of Union law

1. Where a dispute submitted to arbitration in accordance with this Title raises a question of interpretation of a concept of Union law, a question of interpretation of a provision of Union law referred to in this Agreement or a question of whether the United Kingdom has complied with its obligations under Article 89(2), the arbitration panel shall not decide on any such question. In such case, it shall request the Court of Justice of the European Union to give a ruling on the question. The Court of Justice of the European Union shall have jurisdiction to give such a ruling which shall be binding on the arbitration panel.

The arbitration panel shall make the request referred to in the first subparagraph after having heard the parties.

2. Without prejudice to the first sentence of the first subparagraph of paragraph 1, if the Union or the United Kingdom considers that a request in accordance with paragraph 1 is to be made, it may make submissions to the arbitration panel to that effect. In such case, the arbitration panel shall submit the request in accordance with paragraph 1 unless the question raised does not concern the interpretation of a concept of Union law, interpretation of a provision of Union law referred to in this Agreement, or does not concern whether the United Kingdom has complied with its obligations under Article 89(2). The arbitration panel shall provide reasons for its assessment. Within 10 days following the assessment, either party may request the arbitration panel to review its assessment, and a hearing shall be organised within 15 days of the request for the parties to be heard on the matter. The arbitration panel shall provide reasons for its assessment.

3. In the cases referred to in paragraphs 1 and 2, the time limits laid down in Article 173 shall be suspended until the Court of Justice of the European Union has given its ruling. The arbitration panel shall not be required to give its ruling less than 60 days from the date on which the Court of Justice of the European Union has given its ruling.

4. The first subparagraph of Article 161(2) and Article 161(3) shall apply mutatis mutandis to the procedures brought before the Court of Justice of the European Union in accordance with this Article. 

Comment: this provision gives jurisdiction to the CJEU to interpret EU law issues (defined as three categories of issues) upon request of the arbitration panel. Article 89(2), discussed above, concerns the UK’s obligations to comply with CJEU rulings in cases pending at the end of the transition period, or relating to events which occurred before the end of the transition period, as further defined in Articles 86 and 87. The Court’s rulings must always be binding, as noted already. It was always going to be difficult to avoid CJEU jurisdiction over this issue, because its case law going back to Opinion 1/92 states that the CJEU must give final rulings whenever there is an issue of interpretation of EU law between the EU and non-EU countries. Since a lot of the withdrawal agreement concerns EU law, it is possible that Article 174 will be frequently invoked, although it is also possible that disputes about the interpretation of EU law can be settled politically: the equivalent provisions of EU association agreements have never been used to date.

The Article goes in to some procedural detail about a request to the CJEU: the parties must be heard before the arbitrators decide to refer the issue, the UK or EU side can request the reference and make submissions on the issue, a refusal to refer to the CJEU must be reviewed upon request with a hearing, and reasons must be given for the assessment. The deadlines for arbitration in Article 173 are suspended until the CJEU judgment, and the arbitrators have 60 days at least to consider the impact of the Court’s ruling.

Paragraph 4 means that the Treaty rules on preliminary rulings from national courts, and the rules on UK interventions and rights of audience of UK lawyers, will apply to references to the CJEU from the arbitrators.

ARTICLE 175

Compliance with the arbitration panel ruling

The arbitration panel ruling shall be binding on the Union and the United Kingdom. The Union and the United Kingdom shall take any measures necessary to comply in good faith with the arbitration panel ruling and shall endeavour to agree on the period of time to comply with the ruling in accordance with the procedure in Article 176.

Comments: the final ruling is binding but the timing and follow-up measures are determined by the following Articles of the withdrawal agreement, which have more in common with WTO dispute settlement rules than they do with ordinary EU law.

ARTICLE 176

Reasonable period of time for compliance

1. No later than 30 days after the notification of the arbitration panel ruling to the Union and the United Kingdom, the respondent shall, if the panel has ruled in favour of the complainant, notify the complainant of the time it considers it will require for compliance (the "reasonable period of time").

2. If there is disagreement between the Union and the United Kingdom on the reasonable period of time to comply with the arbitration panel ruling, the complainant shall, within 40 days of the notification by the respondent under paragraph 1, request the original arbitration panel in writing to determine the length of the reasonable period of time. Such request shall be notified simultaneously to the respondent. The arbitration panel shall notify its decision on the period for compliance to the Union and the United Kingdom within 40 days of the date of submission of the request.

3. In the event of the original arbitration panel, or some of its members, being unable to reconvene to consider a request under paragraph 2, a new arbitration panel shall be established as set out in Article 171. The time limit for notifying the decision shall be 60 days from the date of establishment of the new arbitration panel.

4. The respondent shall inform the complainant in writing of its progress in complying with the arbitration panel ruling referred to in Article 173 at least 1 month before the expiry of the reasonable period of time.

5. The reasonable period of time may be extended by mutual agreement of the Union and the United Kingdom.

Comments: the concept of a reasonable period of time for compliance is comparable to Article 21(3) of the WTO dispute settlement understanding, although the DSU rules have different time limits and a suggested guideline period for compliance (15 months). Paragraph 4 can be compared to Article 21(6) of the WTO dispute settlement understanding, which provides for more detailed review of compliance with a DSU ruling.

ARTICLE 177

Review of any measure taken to comply with the arbitration panel ruling

1. The respondent shall notify the complainant before the end of the reasonable period of time of any measure that it has taken to comply with the arbitration panel ruling.

2. If, at the end of the reasonable period, the complainant considers that the respondent has failed to comply with the arbitration panel ruling referred to in Article 173, the complainant may request the original arbitration panel in writing to rule on the matter. The arbitration panel shall notify its ruling to the Union and the United Kingdom within 90 days of the date of submission of the request.

3. In the event of the original arbitration panel, or some of its members, being unable to reconvene to consider a request under paragraph 2, a new arbitration panel shall be established as set out in Article 171. The time limit for notifying the ruling shall be 60 days from the date of establishment of the new arbitration panel.

 4. Where a case referred to the arbitration panel pursuant to paragraph 2 raises a question of interpretation of a concept of Union law or a question of interpretation of a provision of Union law referred to in this Agreement, Article 174 shall apply mutatis mutandis.

Comment: the settlement of a possible dispute over whether the losing party has in fact complied with its obligations is not expressly dealt with in the WTO dispute settlement rules, but a practice has developed of assessing this issue as part of disputes over retaliation. The EU has an interest in setting out express rules on this issue because it was involved in such disputes in the WTO (notably in the case of the EU’s banana import regime). Note the possible need to ask the CJEU about EU law issues again.

   

ARTICLE 178

Temporary remedies in case of non-compliance

1. If the arbitration panel rules in accordance with Article 177(2) that the respondent has failed to comply with the arbitration panel ruling referred to in Article 173, at the request of the complainant it may impose a lump sum or penalty payment to be paid to the complainant. In determining the lump sum or penalty payment, the arbitration panel shall take into account the seriousness of the non-compliance and underlying breach of obligation, the duration of the non-compliance and underlying breach of obligation. 

2. If, 1 month after the arbitration panel ruling referred to in paragraph 1, the respondent has failed to pay any lump sum or penalty payment imposed on it, or if, 6 months after the arbitration panel ruling referred to in Article 177(2), the respondent persists in not complying with the arbitration panel ruling referred to in Article 173, the complainant shall be entitled, upon notification to the respondent, to suspend obligations arising from:

(a) any provision of this Agreement other than those contained in Part Two; or

(b) parts of any other agreement between the Union and the United Kingdom under the conditions set out in that agreement.

The notification shall specify the provisions which the complainant intends to suspend. Before deciding to suspend parts of an agreement referred to in point (b) the complainant shall first consider whether the suspension of the provision of this Agreement in accordance with point (a) would be an appropriate response to the breach. Any suspension shall be proportionate to the breach of obligation concerned, taking into account the gravity of the breach and the rights in question and, where the suspension is based on the fact that the respondent persists in not complying with the arbitration panel ruling referred to in Article 173, whether a penalty payment has been imposed on the respondent and has been paid or is still being paid by the latter. The complainant may implement the suspension at any moment but not earlier than 10 days after the date of the notification, unless the respondent has requested arbitration under paragraph 3. 

3. If the respondent considers that the extent of the suspension set out in the notification referred to in paragraph 2 is not proportionate, it may request the original arbitration panel in writing to rule on the matter. Such request shall be notified to the complainant before the expiry of the 10-day period referred to in paragraph 2. The arbitration panel shall notify its ruling to the Union and the United Kingdom within 60 days of the date of submission of the request. Obligations shall not be suspended until the arbitration panel has notified its ruling, and any suspension shall be consistent with the arbitration panel ruling.

4. In the event of the original arbitration panel, or some of its members, being unable to reconvene to consider a request under paragraph 2, a new arbitration panel shall be established as set out in Article 171. In such cases, the period for notifying the ruling shall be 90 days from the date of establishment of the new arbitration panel.

5. The suspension of obligations shall be temporary and shall be applied only until any measure found to be inconsistent with the provisions of this Agreement has been withdrawn or amended, so as to achieve conformity with the provisions of this Agreement, or until the Union and the United Kingdom have agreed to otherwise settle the dispute.

Comments: this Article provides for escalating penalties in the case of continued breach of the agreement. First of all, para 1 provides for imposition of a fine upon the party which has been found to have breached the agreement and not to have fixed its breach within the reasonable time period. This penalty is imposed by the arbitrators, apparently at the same time when they consider whether the breach is continuing (this is similar to WTO practice). However, unlike the WTO, the arbitrators impose the penalty as such; it is not negotiated by the parties (compare to Article 23(2) of the WTO dispute settlement understanding).

The wording of para 1 has some similarities to Article 260 TFEU (fines for not complying with a prior CJEU judgment) and the criteria resemble those developed by the CJEU case law on this provision (which I discussed here). However, there is no express reference to CJEU case law or to EU law here.  This process differs from that in the March 2018 draft, where the UK or EU could go to the CJEU and ask it to rule on a breach of its previous ruling on dispute settlement under the withdrawal agreement, with the Court applying a fine if the argument was upheld.

Paragraph 2 escalates by providing for retaliation, in the event that the losing party refuses to pay a fine after one month or has not implemented a ruling confirming that it is still in breach of the agreement six months after that ruling was handed down. Note that it is not permissible to retaliate by suspending citizens’ rights, and retaliation under a future treaty is possible if that treaty provides for it. Retaliation also has to be proportionate. Compare to Article 22(3) to (6) of the WTO dispute settlement rules.

The proportionality of the retaliation is guaranteed by para 3, which provides for arbitration if the losing party thinks that the retaliation levied against it is excessive. Compare to Article 22(6) and (7) of the WTO dispute settlement rules. Using the arbitrators is a change from the original draft proposal, which was to have judicial review by the CJEU of retaliation. Note that there is no reference to the CJEU here; the assumption is probably that the proportionality of retaliation is not an EU law issue that the Court would have to be involved in interpreting.  

Para 5 on the temporary nature of retaliation can be compared to Article 22(8), first sentence, of the WTO dispute settlement rules.

ARTICLE 179

Review of any measure taken after temporary remedies

1. Where the complainant has suspended obligations in accordance with Article 178 or where the arbitration panel has imposed a penalty payment on the respondent in accordance with Article 178(1), the respondent shall notify the complainant of any measure it has taken to comply with the ruling of the arbitration panel and of its request for an end to the suspension of obligations applied by the complainant or to the penalty payment.

2. If the Union and the United Kingdom do not reach an agreement on whether the notified measure brings the respondent into conformity with the provisions of this Agreement within 45 days of the date of submission of the notification, either party may request the original arbitration panel in writing to rule on the matter. Such request shall be notified simultaneously to the other party. The arbitration panel ruling shall be notified to the Union and the United Kingdom and to the Joint Committee within 75 days of the date of submission of the request.

If the arbitration panel rules that the respondent has brought itself into conformity with this Agreement, or if the complainant does not, within 45 days of the submission of the notification referred to in paragraph 1, request that the original arbitration panel rule on the matter:

(a) the suspension of obligations shall be terminated within 15 days of either the ruling of the arbitration panel or the end of the 45-day period;

(b) the penalty payment shall be terminated on the day after either the ruling of the arbitration panel or the end of the 45-day period.

3. In the event of the original arbitration panel, or some of its members, being unable to reconvene to consider a request under paragraph 2, a new arbitration panel shall be established as set out in Article 171. The period for notifying the ruling shall in that case be 90 days from the date of establishment of the new arbitration panel.

4. Where a case referred to the arbitration panel pursuant to paragraph 2 raises a question of interpretation of a concept of Union law or a question of interpretation of a provision of Union law referred to in this Agreement, Article 174 shall apply mutatis mutandis.

Comments: this is another issue which is contentious as regards the WTO dispute settlement rules: what happens if the losing party insists that it has now complied with the original ruling, but the winning party insists that it has not? The withdrawal agreement sends the issue back to arbitration, noting also that it might be necessary in this context to ask the CJEU to rule on interpretation of EU law.   

ARTICLE 180

Arbitration panel decisions and rulings

1. The arbitration panel shall make every effort to take decisions by consensus. Where, nevertheless, a decision cannot be arrived at by consensus, the matter at issue shall be decided by majority vote. However, in no case dissenting opinions of members of an arbitration panel shall be published. 

2. Any ruling of the arbitration panel shall be binding on the Union and the United Kingdom. The ruling shall set out the findings of fact, the applicability of the relevant provisions of this Agreement, and the reasoning behind any findings and conclusions. The Union and the United Kingdom shall make the arbitration panel rulings and decisions publicly available in their entirety, subject to the protection of confidential information.

Comments: note the lack of dissenting opinions, in the event that that the arbitrators vote by a majority. The obligation for reasoned rulings is comparable to Article 11 of the WTO dispute settlement rules. The obligation to publish decisions (also WTO practice) is useful.

ARTICLE 181

Members of an arbitration panel

1. The members of an arbitration panel shall be independent, shall serve in their individual capacity and shall not take instructions from any organisation or government, and shall comply with the Code of Conduct set out in Part B of Annex IX. The Joint Committee may amend that Code of Conduct.

2. The members of an arbitration panel shall, as from the establishment thereof, enjoy immunity from legal proceedings in the Union and the United Kingdom with respect to acts performed by them in the exercise of their functions on that arbitration panel.

PROTOCOL ON IRELAND/NORTHERN IRELAND

ARTICLE 12

Implementation, application, supervision and enforcement

1. Without prejudice to paragraph 4, the authorities of the United Kingdom shall be responsible for implementing and applying the provisions of Union law made applicable by this Protocol to and in the United Kingdom in respect of Northern Ireland.

4. As regards the second subparagraph of paragraph 2 of this Article, Article 5 and Articles 7 to 10, the institutions, bodies, offices, and agencies of the Union shall in relation to the United Kingdom and natural and legal persons residing or established in the territory of the United Kingdom have the powers conferred upon them by Union law. In particular, the Court of Justice of the European Union shall have the jurisdiction provided for in the Treaties in this respect. The second and third paragraphs of Article 267 TFEU shall apply to and in the United Kingdom in this respect.

5. Acts of the institutions, bodies, offices, and agencies of the Union adopted in accordance with paragraph 4 shall produce in respect of and in the United Kingdom the same legal effects as those which they produce within the Union and its Member States.

6. When representing or assisting a party in relation to administrative procedures arising from the exercise of the powers of the institutions, bodies, offices, and agencies of the Union referred to in paragraph 4, lawyers authorised to practise before the courts or tribunals of the United Kingdom shall in every respect be treated as lawyers authorised to practise before courts or tribunals of Member States who represent or assist a party in relation to such administrative procedures.

7. In cases brought before the Court of Justice of the European Union pursuant to paragraph 4:

(a) the United Kingdom may participate in the proceedings before the Court of Justice of the European Union in the same way as a Member State;

(b) lawyers authorised to practise before the courts or tribunals of the United Kingdom may represent or assist a party before the Court of Justice of the European Union in such proceedings and shall in every respect be treated as lawyers authorised to practise before courts or tribunals of Member States representing or assisting a party before the Court of Justice of the European Union.

Comments: this Article applies from the end of the transition period, except para 3 (not reproduced), which applies as soon as the withdrawal agreement enters into force (see Article 185). They key provision for the Court is para 4, which retains the Court’s jurisdiction over parts of the Protocol. More precisely, the Court’s jurisdiction applies to: the rules on exchange of information (Article 12(2), second sub-paragraph); the provisions on customs and movement of goods relating to Northern Ireland (Article 5); and technical regulations, VAT and excise law, electricity market, and State aid law as applicable to Northern Ireland (Articles 7 to 10).

ARTICLE 13

Common provisions

2. Notwithstanding Article 4(4) and (5) of the Withdrawal Agreement, the provisions of this Protocol referring to Union law or to concepts or provisions thereof shall in their implementation and application be interpreted in conformity with the relevant case law of the Court of Justice of the European Union.

Comment: the other provisions of Article 13 of the protocol are not reproduced. This provision differs from Article 4 in that all CJEU judgments, even after the end of the transition period, continue to apply within the scope of the Protocol. Article 13 itself applies from the end of the transition period.

PROTOCOL RELATING TO THE SOVEREIGN BASE AREAS

OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND

 IN CYPRUS

ARTICLE 1

General provisions

2. By way of derogation from Article 4(4) and (5) of the Withdrawal Agreement, the provisions of this Protocol referring to Union law or concepts or provisions thereof shall in their implementation and application be interpreted in conformity with the relevant case law of the Court of Justice of the European Union.

Comment: the other provisions of Article 1 of the protocol are not reproduced. Like Article 13 of the Northern Ireland protocol, this provision differs from Article 4 in that all CJEU judgments, even after the end of the transition period, continue to apply within the scope of the Protocol. Article 1 itself applies from the end of the transition period.

ARTICLE 12

Supervision and enforcement

1. In respect of the Sovereign Base Areas and in relation to natural and legal persons residing or established in the territory of those Areas, the institutions, bodies, offices and agencies of the Union shall have the powers conferred upon them by Union law in relation to this Protocol and provisions of Union law made applicable by it. In particular, the Court of Justice of the European Union shall have jurisdiction as provided for in the Treaties in this respect.

2. Acts of the institutions, bodies, offices and agencies adopted in accordance with paragraph 1 shall produce the same legal effects with regard to and in the Sovereign Base Areas as those which they produce within the Union and its Member States.

Comments: this Article applies from the end of the transition period. Like Article 12 of the Northern Ireland protocol, it retains the Court’s jurisdiction for the Protocol, although unlike the other provision it applies to the whole protocol, not selected parts of it.

Analysis 2 of the Revised Brexit Withdrawal Agreement: Transition Period

Professor Steve Peers, University of Essex

With a revised version of the Brexit withdrawal agreement now on the table, this is an opportune time to update my previous blog posts on the first version of the withdrawal agreement. The first analysis was an overview of the revised agreement, and this blog post (updating my spring 2018 post) concerns the transition period in the agreement. (The revised deal comprises a revised Protocol on the Irish border – for a full text of the revised withdrawal agreement following this change, see here – and a revised political declaration on the future relationship.) Update: Subsequent blog posts analyse the provisions in the revised withdrawal agreement on dispute settlement, citizens' rights and the revised political declaration on the future relationship between the UK and the EU.

This blog post explains the overall context of the transition period and then annotates the text. I have not repeated some of my analysis of the drafting history, but that can be found in the 2018 version of this post.  

The basic idea of the transition period is that substantive EU law (including newly adopted measures) continues to apply to the UK until the end of 2020 – although this date could be extended by one or two years. However, there are exceptions to this general rule, as explained below. After the end of that period, the relationship between the EU and UK ceases, unless new treaties have been negotiated (with the exception of Northern Ireland, which is subject to special rules). 

Structure of the withdrawal agreement

Part One of the withdrawal agreement sets out the “Common Provisions”. These deal with basic issues like definitions and territorial scope.

Part Two of the withdrawal agreement deals with citizens’ rights. It will mostly not apply until the end of the transition period, and free movement law will continue to apply during the transition period.

Part Three of the agreement sets out “separation provisions”. These deal with issues like what happens to European Arrest Warrants pending at the end of the transition period. This part will largely apply as from the end of that period.

Next, Part Four sets out the rules on the transition period as such. These provisions are annotated below.

Part Five concerns the financial settlement. It incorporates the earlier agreement that the UK is takes part in the EU’s financial rules until the end of the transition period. (The end-2020 cut-off date of the transition period matches the end of the current EU budget cycle).

Part Six sets out “Final Provisions”. Some of this applies immediately from Brexit Day, and some from the end of the transition period. For instance, the rules on ECJ jurisdiction over EU citizens apply, for the most part, from eight years after the end of the transition period.  So does the clause on a new authority to help guarantee EU citizens’ rights, which might be shut down at the end of that same eight-year period. 

There will also be Protocols on Irish border issues and UK bases in Cyprus, both of which would mostly apply from the end of the transition period; the former was revised as part of this week’s ‘deal’.

I aim to update my other blog posts on the previous version of the withdrawal agreement (on citizens’ rights and dispute settlement) and on the related political declaration shortly.

Barnard & Peers: chapter 27

Photo credit: Der Speigel

PART FOUR

TRANSITION

Article 126

Transition period

There shall be a transition or implementation period, which shall start on the date of entry into force of this Agreement and end on 31 December 2020.

Comments: The EU preferred the term ‘transition’, while the UK preferred ‘implementation’. As a compromise, both terms are used here, although the withdrawal agreement refers solely to a ‘transition’ period in all other Articles of the withdrawal agreement.

The key issues are how the transition period relates to the rest of the agreement, and whether it can be extended. See the discussion above on the first issue, and Article 132 below on the latter issue.

The end date is convenient for the EU27 side as it corresponds with the end of the current multi-annual EU budget cycle. In the revised withdrawal agreement, the ‘backstop’ for the entire UK is removed, creating a ‘cliff edge’ at the end of the period except as regards Northern Ireland.

Note that Article 127(2), discussed below, provides conversely for the transition period to be potentially curtailed early as regards foreign policy issues.

Article 127

Scope of the transition

1. Unless otherwise provided in this Agreement, Union law shall be applicable to and in the United Kingdom during the transition period.

However, the following provisions of the Treaties and acts adopted by the institutions, bodies, offices or agencies of the Union shall not be applicable to and in the United Kingdom during the transition period:

(a) provisions of the Treaties and acts which, pursuant to Protocol (No 15) on certain provisions relating to the United Kingdom of Great Britain and Northern Ireland, Protocol (No 19) on the Schengen acquis integrated into the framework of the European Union or Protocol (No 21) on the position of the United Kingdom and Ireland in respect of the area of freedom, security and justice, or pursuant to the provisions of the Treaties on enhanced cooperation, were not binding upon and in the United Kingdom before the date of entry into force of this Agreement as well as acts amending such acts;

(b)  Article 11(4) TEU, point (b) of Articles 20(2), Article 22 and the first paragraph of Article 24 TFEU, Articles 39 and 40 of the Charter of Fundamental Rights of the European Union, and acts adopted on the basis of those provisions. 

Comments: Union law is defined in Article 2. 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. Paragraph 4 says more about enhanced cooperation, while para 5 says more about JHA.

Sub-paragraph 1(b) 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 no transitional clause on the situation of those EU27 citizens who were elected to local government in the UK (and vice versa) before Brexit day, even in the “Separation Provisions” of Part Three of the withdrawal agreement. 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.

2. In the event that the Union and the United Kingdom reach an agreement governing their future relationship in the area of the Common Foreign and Security Policy and the Common Security and Defence Policy which becomes applicable during the transition period, Chapter 2 of Title V of the TEU and the acts adopted on the basis of those provisions shall cease to apply to the United Kingdom from the date of application of that agreement.  

Comments: There are also provisions on foreign policy in paragraph 7 and in Article 129(6) and (7).

This is the only area where the transition period contemplates a potential early end to the transitional period. By contrast, Theresa May’s Florence speech referred to the possibility of ending the transition 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, although note that Article 129(6) preserves that possibility in certain circumstances. It would also end a possibility for linking defence issues to trade issues, although the UK policy in the Florence speech (and since) was not to insist upon such a link. A later speech by Theresa May (discussed here) went into more detail on what a “future relationship” treaty in this area might include.

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.

3. During the transition period, the Union law applicable pursuant to paragraph 1 shall produce in respect of and in the United Kingdom the same legal effects as those which it produces within the Union and its Member States, and shall be interpreted and applied in accordance with the same methods and general principles as those applicable within the Union.

4. The United Kingdom shall not participate in any enhanced cooperation:

(a)  in relation to which authorisation has been granted after the date of entry into force of this Agreement; or

(b)  within the framework of which no acts were adopted before the date of entry into force of this Agreement.

Comments: On “enhanced cooperation”, see also para 1(b) of this Article, discussed above. This clause 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). In light of this provision, the suggestion that the UK might somehow become bound as such by the tax during the transition period is 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. It could also have such an effect if the UK were no longer even a “transition” ex-Member State.

5. During the transition period, in relation to measures which amend, build upon or replace an existing measure adopted pursuant to Title V of Part Three of the TFEU by which the United Kingdom is bound before the date of entry into force of this Agreement, Article 5 of Protocol (No 19) on the Schengen acquis integrated into the framework of the European Union and Article 4a of Protocol (No 21) on the position of the United Kingdom and Ireland in respect of the area of freedom, security and justice shall continue to apply mutatis mutandis. The United Kingdom shall not, however, have the right to notify its wish to take part in the application of new measures pursuant to Title V of Part Three of the TFEU other than those referred to in Article 4a of Protocol No 21. 

In order to support continuing cooperation between the Union and the United Kingdom, under the conditions set out for cooperation with third countries in the relevant measures, the Union may invite the United Kingdom to cooperate in relation to new measures adopted under Title V of Part III TFEU.

Comment: This issue is also the subject of a speech by Theresa May. For an analysis of the speech and a proposed “future relationship” treaty in this area, see here.

This provision 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. On the other hand, it cannot opt in to new JHA measures which do not amend JHA laws which it is already bound by. At most it can seek to cooperate with the EU in those measures as a non-EU country, on the same basis as other non-EU countries.

At the end of the transition period, the winding up of cooperation in this field is dealt with by the separation provisions in the agreement, on criminal law and civil litigation. There is no provision for how to deal with pending proposals to transfer responsibility for asylum seekers (the “Dublin III” Regulation) at the end of that period.   

One provision relevant to this field appears in Article 185 of the treaty. It provides for the possibility, as from Brexit Day, of refusing to surrender a State’s own citizens under the European Arrest Warrant (EAW) law:

When making the written notification referred to in the first paragraph, the Union, in respect of any Member State which has raised reasons related to fundamental principles of national law of that Member State, may declare that, during the transition period, in addition to grounds for non-execution of a European arrest warrant referred to in Framework Decision 2002/584/JHA, the executing judicial authorities of that Member State may refuse to surrender its nationals to the United Kingdom pursuant to a European arrest warrant. In such a case, the United Kingdom may declare, no later than 1 month after the receipt of the Union's declaration that its executing judicial authorities may refuse to surrender its nationals to that Member State.

This provision raises some key questions, in particular what separation rule will apply to a European Arrest Warrant pending on Brexit Day which is covered by this declaration, and whether some other obligation applies instead of surrender (extradition treaties often contain an “extradite or prosecute” rule, although the EAW law also applies to those who have been convicted already; in that case the obvious course would be to transfer the sentence using the applicable EU rules). Note that the majority of those surrendered are not nationals of the State surrendering them; Germany could still return UK citizens to the UK, for instance.

6. Unless otherwise provided in this Agreement, during the transition period, any reference to Member States in the Union law applicable pursuant to paragraph 1, including as implemented and applied by Member States, shall be understood as including the United Kingdom.

7. By way of derogation from paragraph 6:

(a) for the purposes of Articles 42(6) and 46 TEU and of Protocol (No 10) on permanent structured cooperation established by Article 42 of the Treaty on European Union, any references to Member States shall be understood as not including the United Kingdom. This shall not preclude the possibility for the United Kingdom to be invited to participate as a third country in individual projects under the conditions set out in Council Decision (CFSP) 2017/2315 on an exceptional basis, or in any other form of cooperation to the extent allowed and under the conditions set out by future Union acts adopted on the basis of Articles 42(6) and 46 TEU;

(b) where acts of the Union provide for the participation of Member States, nationals of Member States or natural or legal persons residing or established in a Member State in an information exchange, procedure or programme which continues to be implemented or starts after the end of the transition period, and where such participation would grant access to security related sensitive information that only Member States (or nationals of Member States, or natural or legal persons residing or established in a Member State) are to have knowledge of, in such exceptional circumstances the references to Member States in such Union acts shall be understood as not including the United Kingdom. The Union shall notify the United Kingdom of the application of this derogation;

(c) for the purposes of the recruitment of officials and other servants of the institutions, bodies, offices or agencies of the Union, any references to Member States in Articles 27 and 28(a) of the Staff Regulations and in Article 1 of Annex X thereto and in Articles 12, 82 and 128 of the Conditions of Employment of Other Servants of the European Union, or in the relevant provisions of other staff rules applicable to those institutions, bodies, offices or agencies, shall be understood as not including the United Kingdom. 

Comments: Paragraph 7(a) concerns “permanent structured cooperation” in the area of defence, from which the UK decided to opt out when most Member States decided to trigger that process recently (in the 2017 Council Decision referred to in the text of para 7(a)). The text sets out a compromise: the UK continues its opt out but, like JHA measures, can cooperate as a non-EU country in this and other future defence measures. Note that following paragraph 2 there may be an early EU/UK treaty in this area which would likely address this issue.

It is often falsely claimed that the withdrawal agreement ties the UK into an “EU army”: this provision makes clear that this is not the case.

Article 128

Institutional arrangements

1. Notwithstanding Article 127, during the transition period Article 7 shall apply. 

Comments: Article 7 states that the UK should be regarded as a Member State when Union law (defined in Article 2(a)), refers to Member States, except as regards EU institutions, governance of agencies, or voting in the committees that oversee the adoption of implementing measures by the Commission.

In effect, although Article 2(b) implicitly defines the UK as not a Member State, the UK will remain a de facto Member State during the transition period for the purposes of substantive EU law, but not institutional EU law.

Note that paragraph 5 is an express derogation from paragraph 1, and that Articles 129 and 130 lay out specific rules on external action and fisheries.

2. For the purposes of the Treaties, during the transition period, the parliament of the United Kingdom shall not be considered to be a national parliament of a Member State, except as regards Article 1 of Protocol (No 1) on the role of national parliaments in the European Union and, in respect of proposals which are in the public domain, Article 2 of that Protocol.

Comments: The exception for Articles 1 and 2 of the Protocol on national parliaments means that consultation documents and proposals for EU legislation will still be sent to the UK parliament. However, the rest of that Protocol will no longer apply to the UK parliament: it concerns national parliament objections (Article 3); a waiting period (Article 4); Council agendas (Article 5); simplified Treaty amendments (Article 6); the Court of Auditors (Article 7); bicameral parliaments (Article 8); and COSAC, the joint EP/national parliament body (Title II).

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. Ultimately it seems that there was a compromise which partly accepts the case for a continued link with the UK parliament during the transition period.

3. During the transition period, provisions of the Treaties which grant institutional rights to Member States enabling them to submit proposals, initiatives or requests to the institutions shall be understood as not including the United Kingdom.

Comments: A footnote here states “This should in particular concern Articles 7, 30, 42(4), 48(2) – (6) and 49 TEU and Articles 25, 76(b), 82(3), 83(3), 86(1), 87(3), 135, 218(8), 223(1), 262, 311 and 341 TFEU.”  This exclusion follows from the removal of the UK from the institutional law of the EU.

4. For the purposes of participation in the institutional arrangements laid down in Articles 282 and 283 TFEU and in Protocol (No 4) on the Statute of the European system of central banks and of the European Central Bank with the exception of Article 21(2) of that Protocol, during the transition period, the Bank of England shall not be considered to be a national central bank of a Member State.

Comments: The exception for Article 21(2) of the ECB Protocol means that the Bank of England can still act as a fiscal agent for those buying government debt without this violating the Treaties’ no-bailout clause. Arguably it’s 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.

5. By way of derogation from paragraph 1 and from Article 6, during the transition period, representatives or experts of the United Kingdom, or experts designated by the United Kingdom, may, upon invitation, exceptionally attend meetings or parts of meetings of the committees referred to in Article 3(2) of Regulation (EU) No 182/2011, of Commission expert groups, of other similar entities, or of bodies, offices or agencies where and when representatives or experts of the Member States or experts designated by Member States take part, provided that one the following conditions is fulfilled:

(a) the discussion concerns individual acts to be addressed during the transition period to the United Kingdom or to natural or legal persons residing or established in the United Kingdom;

(b)  the presence of the United Kingdom is necessary and in the interest of the Union, in particular for the effective implementation of Union law during the transition period.

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 items that fulfil the conditions set out in point (a) or (b).  

Comments: Note that a statement by the Commission commits itself to issue a guidance document on how to apply this rule consistently in practice. Regulation 182/2011 sets out general rules for Member States’ participation in committees which govern the Commission’s use of implementing powers.

As in many other aspects of the transition period rules, 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.

6. During the transition period, the United Kingdom shall not act as leading authority for risk assessments, examinations, approvals or authorisations at the level of the Union or at the level of Member States acting jointly as referred to in the acts and provisions listed in Annex VII.

Comments: 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. If the EU can trust the UK to implement EU law, why not accept that it can have a role in risk assessment, et al?

7. During the transition period, where draft Union acts identify or refer directly to specific Member State authorities, procedures, or documents, the United Kingdom shall be consulted by the Union on such drafts with a view to ensuring the proper implementation and application of that act by and in the United Kingdom.

Article 129

Specific arrangements relating to the Union's external action

1. Without prejudice to Article 127(2), during the transition period, the United Kingdom shall be bound by the obligations stemming from the international agreements concluded by the Union, or by Member States acting on its behalf, or by the Union and its Member States acting jointly as referred to in point (a)(iv) of Article 2.* 

Comments: A footnote states that: “The Union will notify the other parties to these agreements that during the transition period, the United Kingdom is to be treated as a Member State for the purposes of these agreements.”  For the text of the notification which would be issued, see here.

The UK will still be bound to the EU as regards treaties with non-EU states. Logically this applies vice versa and it would have been 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.

The assumption seems to be to hope that a unilateral notification by the EU regarding its customs territory (and other issues) will suffice for non-EU countries, legally and politically. Time will tell if this assumption is correct.

2. During the transition period, representatives of the United Kingdom shall not participate in the work of any bodies set up by international agreements concluded by the Union, or by Member States acting on its behalf, or by the Union and its Member States acting jointly, unless:

(a)  the United Kingdom participates in its own right; or 

(b) the Union exceptionally invites the United Kingdom to attend, as part of the Union's delegation, meetings or parts of meetings of such bodies, where the Union considers that the presence of the United Kingdom is necessary and in the interest of the Union, in particular for the effective implementation of those agreements during the transition period; such presence shall only be allowed where Member States participation is permitted under the applicable agreements.

3. In accordance with the principle of sincere cooperation, the United Kingdom shall refrain, during the transition period, from any action or initiative which is likely to be prejudicial to the Union's interests, in particular in the framework of any international organisation, agency, conference or forum of which the United Kingdom is a party in its own right. 

 Comments: This para 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. The particular relevance of the “sincere cooperation” principle in EU external relations law is that it limits Member States from negotiating treaties; but that issue is explicitly addressed by para 4. 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 127(2) above).

4. Notwithstanding paragraph 3, during the transition period, the United Kingdom may negotiate, sign and ratify international agreements entered into in its own capacity in the areas of exclusive competence of the Union, provided those agreements do not enter into force or apply during the transition period, unless so authorised by the Union.

Comments: This para only applies to “exclusive” competence of the EU, which narrows the limits on the UK’s external action. Note that the exact extent of exclusivity of EU external competence is often disputed and even litigated.

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. 

5. Without prejudice to Article 127(2), whenever there is a need for coordination, the United Kingdom may be consulted, on a case-by-case basis. 

Comments: This paragraph takes account of the UK’s significant foreign policy rule, in particular regarding sanctions, although there is ultimately no specific reference to them. 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 127(2) above).

6. Following a decision of the Council falling under Chapter 2 of Title V TEU, the United Kingdom may make a formal declaration to the High Representative of the Union for Foreign Affairs and Security Policy, indicating that, for vital and stated reasons of national policy, in those exceptional cases it will not apply the decision. In a spirit of mutual solidarity, the United Kingdom shall refrain from any action likely to conflict with or impede Union action based on that decision, and the Member States shall respect the position of the United Kingdom.

Comment: This is a significant possibility for the UK not to be bound by an EU measure in this field during the transition period. It reinforces the absurdity of the false claims that the withdrawal agreement would bind the UK to a future “EU army”.

The wording is adapted from two different rules on foreign policy decision-making in Article 31 TEU, although note that the consequence of a UK government declaration here would not be exactly the same as the provisions in the EU Treaty. This would not be a veto as such – since the EU could still adopt the planned act. Rather it would be what the EU calls a “constructive abstention” – the UK would not be bound by what the EU does, but would have to avoid frustrating it.

Note that since Union law applies to the UK during the transition period, this must include Article 275 TFEU, which limits Court of Justice jurisdiction over EU foreign policy measures to cases about sanctions and disputes over EU competence.

The future relationship treaty foreseen in Article 127(2) may make this provision redundant.  

7. During the transition period, the United Kingdom shall not provide commanders of civilian operations, heads of mission, operation commanders or force commanders for missions or operations conducted under Articles 42, 43 and 44 TEU, nor shall it provide the operational headquarters for such missions or operations or serve as framework nation for Union battlegroups. During the transition period, the United Kingdom shall not provide the head of any operational actions under Article 28 TEU.

Comments: The future relationship treaty foreseen in Article 127(2) may make this provision redundant. While this para is consistent with the overall thrust of removing the UK from roles in EU bodies, it is liable to make it harder to run an effective EU defence policy, given the extent of the contribution by the UK military. 

                                                        

Article 130

Specific arrangements relating to fishing opportunities

1. As regards the fixing of fishing opportunities within the meaning of Article 43(3) TFEU for any period falling within the transition period, the United Kingdom shall be consulted in respect of the fishing opportunities related to the United Kingdom, including in the context of the preparation of relevant international consultations and negotiations. 

2. For the purposes of paragraph 1, the Union shall offer the opportunity to the United Kingdom to provide comments on the Annual Communication from the European Commission on fishing opportunities, the scientific advice from the relevant scientific bodies and the proposals from the European Commission for fishing opportunities for any period falling within the transition period.

3. Notwithstanding point (b) of Article 129(2), with a view to allowing the United Kingdom to prepare its future membership in relevant international fora, the Union may exceptionally invite the United Kingdom to attend, as part of the Union's delegation, international consultations and negotiations referred to in paragraph 1 of this Article, to the extent allowed for Member States and permitted by the specific forum.

4. Without prejudice to Article 122(1), the relative stability keys for the allocation of fishing opportunities referred to in paragraph 1 of this Article shall be maintained. 

Comments: Fisheries was a controversial issue during the negotiations on a transition period, although it should also be noted that the deal equally preserves full market access for UK fisheries’ main export market during that period. The catch allocation/market access trade off is going to be central to the future relationship talks with the EU, given the EU’s intention to link these two issues.

If the transition period ends as proposed at the end of 2020, this provision would only be relevant for one year. It could continue for longer if the transition period is extended.

Paras 2 and 3 elaborate further upon the consultations and international negotiations points referred to in para 1, but para 4 is separate: it freezes the catch allocations existing on Brexit day. As such it is a compromise which prevents a possible “grab” of the UK fisheries catch by EU countries during the transition period. 

  

Article 131

Supervision and enforcement

During the transition period, the institutions, bodies, offices and agencies of the Union shall have the powers conferred upon them by Union law in relation to the United Kingdom and to natural and legal persons residing or established in the United Kingdom. In particular, the Court of Justice of the European Union shall have jurisdiction as provided for in the Treaties.

The first paragraph shall also apply during the transition period as regards the interpretation and application of this Agreement.  

Comments: As noted already, “Union law” is defined in Article 2 of the agreement.

ARTICLE 132

Extension of the transition period

1. Notwithstanding Article 126, the Joint Committee may, before 1 July 2020, adopt a single decision extending the transition period for up to 1 or 2 years.*

Comment: Note the requirement that the UK and EU both agree to an extension, and that there is only a single extension permitted. The footnote reads: * “In case of extension, the Union will notify other parties to international agreements thereof.”

2. In the event that the Joint Committee adopts a decision under paragraph 1, the following shall apply:

(a) by way of derogation from Article 127(6), the United Kingdom shall be considered as a third country for the purposes of the implementation of the Union programmes and activities committed under the multiannual financial framework applying as from the year 2021;

(b) by way of derogation from Article 127(1) and without prejudice to Part Five of this Agreement, the applicable Union law concerning the Union's own resources relating to the financial years covered by the extension of the transition period shall not apply to the United Kingdom after 31 December 2020;

(c) by way of derogation from Article 127(1) of this Agreement, Articles 107, 108 and 109 TFEU shall not apply to measures of the United Kingdom authorities, including on rural development, supporting the production of and trade in agricultural products in the United Kingdom up to an annual level of support which shall not be more than the total amount of expenditure incurred in the United Kingdom under the Common Agricultural Policy in 2019, and provided that a minimum percentage of that exempted support complies with the provisions of Annex 2 to the WTO Agreement on Agriculture. Such minimum percentage shall be determined on the basis of the last available percentage by which the overall expenditure under the Common Agricultural Policy in the Union complied with the provisions of Annex 2 to the WTO Agreement on Agriculture. In the event that the period by which the transition period is extended is not a multiple of 12 months, the maximum annual level of exempted support in the year for which the extended transition period covers less than 12 months shall be reduced pro rata;

(d) for the period from 1 January 2021 to the end of the transition period, the United Kingdom shall make a contribution to the Union budget, as determined in accordance with paragraph 3;

(e) subject to point (d) of paragraph 3, Part Five of this Agreement shall not be affected.

3. A decision of the Joint Committee under paragraph 1 shall:

(a) establish the appropriate amount of the contribution of the United Kingdom to the Union budget for the period from 1 January 2021 to the end of the transition period, taking into account the status of the United Kingdom during that period, as well as the modalities of payment of that amount;

(b) specify the maximum level of exempted support, as well as the minimum percentage thereof that shall comply with the provisions of Annex 2 to the WTO Agreement on Agriculture, as referred to in point (c) of paragraph 2;

(c) lay down any other measure necessary for the implementation of paragraph 2;

(d) adapt the dates or periods referred to in Articles 51, 62, 63, 84, 96, 125, 141, 156, 157 and Annexes IV and V to reflect the extension of the transition period.

Comments: EU budget law will not as such apply to the UK in event of an extension, but ad hoc contributions would be negotiated instead. This would likely be a difficult negotiation.