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EU agrees Brexit transition period negotiating guidelines

The UK would be expected to apply EU law "as if it were a member state" during any post-Brexit transition period, EU leaders have said.31 Jan 2018

The position is contained in negotiating directives (8-page / 154KB PDF) agreed by the remaining 27 member states, sitting as the EU General Affairs Council, which give the European Commission authority to begin discussions with the UK on a transition period following its planned exit from the EU in March 2019. This transition period should come to an end on 31 December 2020, according to the text; which makes it shorter than the two-year transition period preferred by the UK.

The UK would continue to participate in the EU customs union and single market during the transition period, and would remain bound by EU trade policy, customs laws and tariffs, according to the directives. It would not be able to participate in EU decision-making, and would no longer be represented at the EU Commission, parliament and Council during this time.

"EU ministers have given a clear mandate to the Commission on what is the type of transition period that we envisage: full EU acquis to be applied in the UK and no participation in the EU institutions and decision-making," said Bulgarian deputy prime minister Ekaterina Zaharieva.

The council had adopted the text "speedily", and hoped that "an agreement on this with the UK can also be closed swiftly", she said.

The position of the EU is that the entire body of EU law, known as the 'acquis', should continue to apply to the UK for the duration of the transition period. All existing EU regulatory, budgetary, supervisory and enforcement structures should also apply, including the jurisdiction of the Court of Justice of the EU (CJEU).

Any changes to the acquis adopted by the EU during the transition period would also apply in the UK, according to the directives. The UK will retain its existing opt-outs on freedom, security and justice matters, but will not be permitted to opt into new measures in these areas other than those which amend, build on or replace measures by which it is already bound.

The UK would remain bound by its obligations under trade agreements concluded by the EU during the transition period, but would not be permitted to participate in any bodies set up by those agreements. It would not be able to become bound by new trade agreements with third countries "in fields of competence of EU law" during this period, without authorisation from the EU. Trade with the EU would continue on the basis of the single market and customs union, with the UK bound by all related policies, laws and tariffs. This would include the 'four freedoms' of the EU: freedom of movement of goods, capital, services and labour.

As a third country, the UK would not be permitted to participate in the institutions and decision-making of the EU or to attend any meetings at which member states are represented during the transition period. It may be invited to attend some of these meetings on a case by case basis in exceptional circumstances, but would not have any voting rights. The directives also allow for specific consultations with the UK during the transition period on EU fishing rights.

The EU's position that the UK would be bound by all EU laws without any right to give input into decisions would "cause a degree of concern" to financial services firms in particular, with similar concerns likely in other sectors, said insurance law expert Tobin Ashby of Pinsent Masons, the law firm behind Out-Law.com.

"As the UK would be subject to EU law for the transition period but not a participant in the decision-making process, this does raise the possibility of attempted 'land-grab' by EU member states through new rules brought in during the period," he said.

"However, this is perhaps a taste of what is to come post-Brexit for UK firms wishing to continue to do business cross-border into EU, and in the short term the time usually needed to agree new proposals and the fact that this is the opening negotiation position should provide some comfort for firms," he said.