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Brexit withdrawal agreement and the transition period

Posted: 24th November 2020

As of 11pm (midnight central European time) on the 31st January 2020 the UK left the European Union, 47 years after it first acceded to the European Economic Community. We are now in a ‘transitional period’ in terms of our relationship with the EU. This period runs to 31 December 2020, as provided for in the Withdrawal Agreement reached between the UK and the EU in October 2019.

Since January, the UK has been able to negotiate its future trading relationship with other countries around the world. If negotiations cannot be successfully concluded, there will be a ‘no-deal’ Brexit. This insight gives a guide to the withdrawal agreement and the expiry of the transition period.

The European Union Withdrawal Agreement explained

The EU Withdrawal Agreement itself is a legally binding document. It sets out terms for the UK’s withdrawal from the EU, running to more than 500 pages, including initial agreements on citizens’ rights, the UK’s financial obligations to the EU and the Northern Ireland protocol, establishing arrangements for retaining an open border on the island of Ireland. The Withdrawal Agreement was agreed in its final form by the European Council on 19 October 2019, as confirmed in the statement that political agreement had been reached and that the United Kingdom had concluded an agreement with the European Union under Article 50(2) of the Treaty on European Union.

The Withdrawal Agreement is supplemented by the Political Declaration setting out the framework for the future relationship between the European Union and the Declaration by Her Majesty’s Government of the United Kingdom of Great Britain and Northern Ireland concerning the operation of the ‘Democratic consent in Northern Ireland’ provision of the Protocol on Ireland/Northern Ireland. The Political Declaration aims to establish “the parameters of an ambitious, broad, deep and flexible partnership across trade and economic co-operation with a comprehensive and balanced Free Trade Agreement at its core”. It sets the tone and provides the framework for the detailed and complex negotiations that have followed in which the UK and EU have been seeking to reach agreement on a free trade agreement.

European Union (Withdrawal Agreement) Act 2020

The European Union (Withdrawal Agreement) Act 2020 (the 2020 Act) gives effect to the Withdrawal Agreement. The 2020 Act, which received Royal Assent on 23 January 2020, following its passage through the UK Parliament:

  • amends the European Union (Withdrawal) Act 2018 so that, although section 1 of the 2018 Act repeals the European Communities Act 1972 with effect from ‘Exit Day’, the 2020 Act reinstates the 1972 Act through a ‘saving’ provision, so that the 1972 Act continues to have effect in UK law until the end of the transition period;
  • sets out the terms of the financial payments to be made by the UK to the EU over a number of coming years, to meet its commitments;
  • contains provisions relating to a protocol on Ireland and the operation of a customs and regulatory border between Great Britain and Northern Ireland;
  • provides for the areas where the European Court of Justice still has a role in relation to UK law and seeks to clarify the status of the Withdrawal Agreement (an international treaty) in relation to other areas of UK law;
  • establishes an arbitration procedure that is to be used to deal with disputes that arise concerning the Withdrawal Agreement, together with a reporting duty on the use of that procedure;
  • includes arrangements for dealing with the rights of citizens, with the establishment of an Independent Monitoring Authority for individuals to complain to about the way they have been treated in the context of EU withdrawal.

The transition period

This has been a period for negotiations on the future relationship between the UK and the EU. During the transition period, the UK has remained in the EU’s single market and customs union, and has still contributed to the EU budget, with free movement of citizens retained for this period, but it has no longer been represented in the EU’s decision-making bodies, including the European Parliament.

The Withdrawal Agreement included an option to extend the transitional period, to avoid a ‘no-deal’ Brexit if agreement cannot be reached between the EU and UK by 31 December 2020. Such an extension would have had to have been requested by July 2020. Following a statement by the Prime Minister Boris Johnson that he would not use this option and that 11 months was sufficient to agree a comprehensive deal, the UK Government inserted a provision in the 2020 Act to prohibit a UK Minister seeking such an extension, and an extension has not been sought.

Countdown to 31st December 2020

It remains to be seen whether a deal can be reached in the transition period, but the possibility of a ‘no-deal’ Brexit remains, as the countdown to 31st December 2020 continues.

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