Brexit: The Withdrawal Agreement explained

Brexit Westminster
David Wood.jpg By David Wood, Senior Policy Director

23 November 2018

David Wood summarises some of the key points in the 585-page Withdrawal Agreement published by the European Commission and UK Government on 14 November.

After 29 March 2019, the Withdrawal Treaty will be the only legal agreement between the UK and the EU.

The text agreed by negotiators and published on 14 November, protects over 3 million EU citizens in the UK and over 1 million UK nationals in EU countries.

It seeks an orderly withdrawal of the UK from the EU trading bloc, and establishes a transition period to 31 December 2020 during which time, the EU will treat the UK as if it was a Member State though not participating in EU institutions and governance structures.

It sets out the arrangements for a financial settlement, to ensure the UK and EU honour all financial obligations undertaken while the UK was a Member State.

Article 132 of the Agreement allows the transition period to be extended beyond 31 December 2020, up to a date yet to be specified.

The Withdrawal Agreement requires approval by this weekend’s forthcoming EU Summit, the UK Parliament and the European Parliament.

The Northern Ireland Backstop and the Single Customs Territory

The Agreement brings in a legally operational backstop through a specific protocol on Ireland/Northern Ireland which contains commitments not to diminish the rights set out in the Good Friday (Belfast) Agreement 1998, and to protect North-South co-operation.

The protocol lays out the arrangements for avoiding a hard border between Ireland and Northern Ireland in the event that no other agreement has been reached by the end of the transition period (currently 31 December 2020).

Both the UK and the EU are committed to reaching a deal which would supersede the protocol by the end of the transition period.

Under the protocol, the UK and the EU will remain in a single customs territory from the end of the transition period until an agreement on the future UK-EU relationship replaces it. Northern Ireland will, therefore, remain, with the rest of the UK, in this customs territory, thereby avoiding tariffs, quotas and rules of origin checks between Northern Ireland and the UK and, subject to compliance with the Union Customs Code, the EU.

Operational aspects will be codified by a UK-EU Joint Committee; this committee will also consider any claims from either party that the protocol is no longer necessary and should be terminated.

The protocol is not intended to create a permanent relationship between the UK and EU.

A protocol on Gibraltar is also included within the Withdrawal Agreement, which provides for close co-operation between Spain and the UK in relation to citizens’ rights and administrative co-operation.

Single Customs Territory

What does the Single Customs Territory mean in practice?  In essence:

  • The UK will align its tariffs and rules to the EU’s external tariffs and rules of origin
  • There will be no tariffs, quotas or checks on rules of origin between the EU and UK (except for fishery and aquaculture products)
  • Both the UK and EU have agreed on a series of measures to ensure a ‘level playing field’, e.g. on State Aid and competition, tax, environmental requirements and employment and social protection
  • The UK will harmonise its commercial policy with the EU’s commercial policy to the extent necessary.

Accounting and Auditing

The only mention of accounting is in endorsing International Public Sector Accounting Standards for the annual calculation of the outstanding UK pension liabilities which accrue up to 2020. These liabilities should be calculated using actuarial valuations made in accordance with the relevant IPSAS.

Article 27 confirms that audit and other professional qualifications recognised prior to the end of the transitional agreement shall remain valid in their host state.

What else is in the Withdrawal Agreement?

The Agreement seeks to ensure an orderly withdrawal of the UK from the EU.  For example:

  • Goods lawfully placed on the market in the UK or EU before the end of the transition period will continue to circulate freely in and between these two markets until they reach their end-users
  • Existing protection of intellectual property rights across the EU and UK will be maintained, including geographical indications such as ‘Parma ham’ and ‘Welsh Lamb’
  • The UK must continue to apply EU data protection rules to personal data received from other Member States during EU membership – until the EU has established an ‘adequacy decision’ that the UK data protection safeguards are ‘essentially equivalent’ to those in the EU
  • Public procurement procedures pending at the end of the transition period should be completed in accordance with EU law.

Topics

  • Political landscape
  • Brexit

Previous Page