Brexit next steps: The transition period

Stefano Fella

The UK leaves the EU today (31 January) at 11pm UK time. The Withdrawal Agreement (WA) comes into force immediately. Several features of UK membership will however be maintained during the transition period provided for by the WA.

This Insight explains what changes when the WA comes into force, and what remains the same.

The Article 50 process comes to an end

Since the UK issued its notice to leave the EU in March 2017, discussions on UK withdrawal and the future relationship with the EU have been governed by Article 50 of the Treaty on European Union (TEU). On 31 January, the Article 50 process will be complete. It will not be possible to further extend or reverse the Article 50 process.

From 1 February, the legal basis for negotiations between the UK and EU will no longer be Article 50. The future relationship negotiations will be based on the same procedures applied for negotiations with other ‘third countries’ (Article 218 Treaty on the Functioning of the EU).

EU rules continue to apply in the transition period

The transition (or implementation) period in the WA was conceived as a bridging period while the UK and the EU negotiate a new relationship. It will last until the end of December 2020. There is provision for the transition period to be extended for one or two years, but the Government has said it won’t seek an extension. It has also legislated to prohibit itself from doing so.

During the transition period nearly all EU rules will continue to apply to the UK. The UK will still be part of the EU single market and customs union. Existing trade arrangements and rules for travelling within the EU will continue to apply.

The jurisdiction of the Court of Justice of the EU in relation to the application of EU law in the UK will continue as before until the transition period ends.

The UK will also continue to pay into the EU budget as part of the financial settlement in the WA.

But the UK can no longer take part in EU decision-making

The UK will no longer be represented in the EU institutions from 1 February and will not participate in EU decision-making. UK MEPs leave the European Parliament, and the UK loses its voting rights in the Council of the EU. It will be possible for UK representatives to participate in meetings of EU bodies where discussions are relevant to the UK. But the UK will not have voting rights in these meetings. The WA identifies fisheries as a policy area where the UK will continue to be consulted.

Some arrangements cease to apply straight away

There are a few exceptions where EU law or rights and obligations relating to membership will no longer apply to the UK from 1 February. These include the following:

Some rights relating to EU citizenship will continue for UK citizens during the transition period, including the right to freedom of movement across the EU. But other rights will end at the beginning of the transition period. For example, UK citizens resident in EU Member States will lose the right to vote and stand in local and European elections.

The UK will no longer have the right to opt into new justice and home affairs (JHA) co-operation measures. But it can do so where measures build upon, amend or replace previous JHA measures the UK has participated in under its previous opt-in arrangements.

Prior to the WA entering into force, EU Member States can notify that they will no longer surrender their citizens to the UK under the European Arrest Warrant (EAW). They can do this if it relates to ‘fundamental principles’ of their national law. So far Germany, Austria and Slovenia have notified that they will not transfer their citizens to the UK under the EAW. They will still transfer other countries’ citizens. The UK can reciprocate and say it will not transfer its citizens under the EAW to these countries.

The EU will be able to exclude the UK from EU activities where participation would grant the UK access to certain security-related sensitive information.

The EU Common Foreign and Security Policy (CFSP) will continue to apply to the UK. For example, it will apply in relation to common positions taken on international affairs and sanctions agreed by the EU. But the UK will be able to abstain from certain actions under the Common Security and Defence Policy (CSDP). The UK will not be considered as an EU Member State in relation to permanent structured co-operation (PESCO) under the CSDP but could still get invited to take part in EU initiatives (the UK has never actually taken part in PESCO). The UK will also not be able to take various command roles within the CSDP.

The above arrangements for CFSP and CSDP can be replaced before the end of the transition period if a new agreement on these areas is reached and is ready to come into force.

The UK will leave the Common Agricultural Policy (CAP) on exit day. The WA means some CAP payment regulations do not apply for 2020. The Government has legislated to allow direct payments to UK farmers to be made this year and is introducing a new UK farm support policy through the Agriculture Bill.

The EU’s international agreements still apply to the UK

The UK will continue to be bound by obligations stemming from the EU’s international agreements during the transition period. These include the EU’s trade agreements with more than 70 non-EU countries. The EU will also notify these countries that the UK should be treated as an EU Member State for the purposes of these agreements. However, the countries concerned are not necessarily obliged to comply. The Government provided a list of countries last year that had indicated they were happy to continue to treat the UK as an EU Member States for trade agreements during the transition period.

The UK is permitted to negotiate and ratify new international agreements with non-EU countries, but these can only come into force at the end of the transition period. The UK has already negotiated some ‘continuity’ agreements to replace the EU’s agreements with non-EU countries.

Greater changes are likely on 1 January 2021

Unless the Government changes its mind on not extending the transition, the above arrangements will end on 31 December 2020. Some areas of the UK-EU relationship will be covered by the WA. These include the rights of EU citizens living in the UK and UK citizens living in the EU at the end of the transition period and aspects of Northern Ireland’s relationship with the EU.

The nature of arrangements for other aspects of UK-EU relationship such as trade, travel, security collaboration and co-operation in other policy areas will depend on what is agreed during the transition period. Arrangements from 1 January 2021 will also depend on whether a UK-EU agreement can be reached and ratified by the end of 2020.