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EU and the UK Agree on Brexit Withdrawal Agreement
26 Nov 2018

Brexit withdrawal

On Sunday the 25th of November 2018, the governments of the United Kingdom and the remaining 27 EU Member States came to an agreement on the deal setting out the conditions for the United Kingdom’s withdrawal from the European Union (“Withdrawal Agreement”). The United Kingdom made its formal application for withdrawal on the 29th of March 2017 and therefore will no longer be a member of the EU after the 29th of March 2019 according to Article 50 of the EU Treaty.

The Withdrawal Agreement, with around 600 pages including its protocols, is designed to make it possible for the United Kingdom to exit from the customs union, the internal market, and the political and administrative structure of the European Union in an orderly way. The British Parliament will vote, on the 11th of December 2018, on whether the Agreement will enter into effect. Considering the present political situation in the United Kingdom, ratification is definitely not a sure thing.

A Transition Period for Union law in the United Kingdom.

During the transition period for the withdrawal, initially set to go on until the 31st of December 2020, the United Kingdom will stay bound by all parts of EU law including the fundamental freedoms, by the enforcement authority of the EU institutions and by the jurisdictional authority of the European Court of Justice (ECJ), and it will stay obliged to continue to make its EU financial contributions. Simultaneously, the United Kingdom will forfeit all of its voting rights, representations, and posts in the EU. The Common Security and Defence Policy, the Common Foreign and Security Policy, and cooperation in Justice and Home Affairs also remain applicable.

The Withdrawal Agreement permits all EU citizens who reside in the United Kingdom and all UK citizens who reside in any of the remaining EU Member States a lifelong right to remain there as long as they decide before the end of the transition period. This right will uphold almost all of the economic, social, and occupational rights to which they were entitled to under EU law.

The ECJ continues to have jurisdiction over all proceedings in relation to the United Kingdom that was pending at the ECJ prior to the end of the transition period and until the ECJ has arrived at a final decision on the issue.

Brexit withdrawal

Key Rules for Regulated Industries and Public Funds.

For companies that work in the regulated sector or collaborate with public entities, the Withdrawal Agreement’s provisions for ongoing public procurement and ongoing administrative procedures are of notable significance (particularly Article 75 et seq. and Article 92 et seq. of the Withdrawal Agreement).

One key area relates to ongoing public procurement procedures. The Agreement allows that public procurement procedures that are pending prior to the end of the transition period will be completed in accordance with the current procedural and substantive Union law governing public procurement procedures. The same applies to administrative procedures related to competition.

Another key aspect is that the Agreement contains significant provisions in respect of state aid law. State aid procedures in relation to the United Kingdom or to natural or legal persons in the United Kingdom that have been started before the end of the transition period by EU institutions, bodies, offices, or agencies will continue to be handled according to EU law even after the transition period ends. The Agreement additionally gives a scrutiny period for state aid. In regards to aiding granted prior to the end of the transition period and for a further four years after the end of the transition period, the European Commission will be competent to start new administrative procedures on state aid.

Monitoring the Withdrawal Agreement.

In compliance with the provisions of EU law, the Withdrawal Agreement is directly applicable and has primacy in its application. Matters in the dispute regarding the application and interpretation of the Withdrawal Agreement will be brought to a political outcome before it would need to go to a common committee. If the proceedings become un solvable, the dispute will be submitted to arbitration and binding on both parties. The arbitration panel can and must, in the case of issues regarding EU law the decision regarding the dispute must be referred to the ECJ. Violations of the Withdrawal Agreement is punishable by a fine.