Brexit - introduction to the Withdrawal Agreement

46 minute read
22 January 2021

The UK's formal withdrawal from the EU took effect at 11 pm on 31 January 2020 (exit day). At this point, the withdrawal period under Article 50 TEU came to an end and the ratified Withdrawal Agreement setting out the legal terms of the UK's withdrawal entered into force. The ratified Withdrawal Agreement was published in the Official Journal of the European Union on exit day along with the Political Declaration on the framework for the future relationship between the UK and EU:

Exit day marked a key milestone in terms of being the date the UK ceased to be an EU Member State. It also marked the start of the 11-month transition or implementation period, during which the UK continued to be treated by the EU as a Member State for many purposes in accordance with the transitional arrangements provided in Part Four of the Withdrawal Agreement.

What is the Withdrawal Agreement?

As of the point of its exit from the EU, the UK's relationship with the EU was governed by the Withdrawal Agreement, an international treaty negotiated by the UK and the EU during the withdrawal period. The Withdrawal Agreement was introduced to:

  • tie up the administrative and financial loose ends associated with the UK's membership of the EU
  • protect the rights of UK and EU citizens living in each other's territory, and
  • provide a stand-still period in relation to the application of EU law in order to allow for the negotiation of a trade deal between the EU and the UK (as a non-Member State)

Here we provide an overview of the content of the Withdrawal Agreement, as well as highlight several interesting public law issues to which the Withdrawal Agreement has given rise.

This article was first published on Lexis Nexis.



Brief background to the Withdrawal Agreement

The process by which a Member State leaves the EU is governed by Article 50 of the Treaty on European Union (TEU).

Under Article 50 TEU, once a Member State has given notice of its intention to leave the EU, there commences a two-year withdrawal period (extendable by mutual consent), during which the exiting state and the remaining Member States negotiate an agreement governing the terms of withdrawal. The Withdrawal Agreement constitutes the terms negotiated between the UK and the EU27 between June 2017 and October 2019, following the UK's notification of its intention to withdraw from the political institutions of the EU, which was given on 29 March 2017.

The negotiation on the UK's withdrawal occurred in two tranches. A first draft of the Withdrawal Agreement was concluded by Theresa May's government in November 2018. For background reading, see:

However, although the deal was endorsed unanimously by the EU27 Member States at the time, it was voted down by MPs in Westminster on 15 January, 12 March and 29 March 2019. 

Although initial opposition covered a range of issues, it quickly coalesced around the 'backstop' in the Protocol on Ireland/Northern Ireland. This backstop would have seen the UK as a whole form a customs union with the EU and commit to mirroring certain 'level playing field' obligations with respect to environmental protection, labour and social rights, State aid and competition, and tax-with Northern Ireland complying with a raft of additional EU legislation. During the period that the Protocol was in effect the UK would have been unable to sign its own trade deals with third countries. That opposition meant that the government could not ratify the Withdrawal Agreement, at the time giving rise to a risk that the UK would leave the EU with no deal in place.

Both MPs and the government were, at that point, unwilling to risk the economic consequences of a no-deal Brexit and an extension was secured to the withdrawal period under Article 50 TEU, to allow further time to secure the consent of MPs to the Withdrawal Agreement. The first extension lasted until 12 April 2019 with another agreed until 31 October 2019.

Despite securing assurances from the EU as to the interpretation of the Northern Ireland backstop, it became obvious that the original draft Agreement would not be passed by MPs in its current form and so, when Boris Johnston took over as Prime Minister on 24 July 2019, the UK government sought to renegotiate certain elements of it-particularly the backstop.

That renegotiation produced a new version of the Withdrawal Agreement which was agreed on 17 October 2019 and published by the UK government on 19 October 2019. The deal was again endorsed by the EU27 straight away and published in the Official Journal of the European Union. The House of Commons convened for a special sitting on 19 October 2019 (in its first Saturday sitting since the invasion of the Falklands in 1982) in order to consider the new Withdrawal Agreement. However, MPs voted to withhold their approval until the legislation implementing the Withdrawal Agreement in UK law had been passed.

The purpose of withholding consent was to ensure that the Prime Minister was bound by the terms of the European Union (Withdrawal) (No 2) Act 2019 (EU(W)(N2)A 2019), also known as the Benn Act), which required him to seek a further extension to the Article 50 timeline if no Agreement had been approved by 19 October 2019. MPs feared that if the Withdrawal Agreement was approved but the implementing legislation proved controversial then the Withdrawal Agreement would not have been ratified by 31 October 2019 and the UK would still face a no-deal Brexit.

In compliance with the EU(W)(N2)A 2019, a further extension was sought until 31 January 2020 and, on 22 October 2019, the government's implementing legislation in the form of the European Union (Withdrawal Agreement) Bill (the WAB) passed its second reading. That vote was hailed as the first time that MPs had signalled consent to a draft of the Withdrawal Agreement.

On 28 October 2019, the EU granted the requested extension to the withdrawal period and the next day the Early Parliamentary General Election Act 2019 was passed through the House of Commons, receiving royal assent on 31 October 2019. Parliament was dissolved on 6 November 2019 and the WAB fell having made no further progress since its second reading. The Withdrawal Agreement therefore remained unratified by either the UK or the EU.

In the general election of 12 December 2019, Boris Johnson's government secured a majority of 80 seats with a pledge to pass the WAB, ratify the Withdrawal Agreement and take the UK out of the EU on 31 January 2020 with no further extensions. Plans to reintroduce the WAB were then confirmed as the government's top priority in the Queen's Speech on 19 December 2019. 

The WAB was reintroduced, with amendments, shortly after the Queen's Speech on 19 December 2019. The WAB received Royal Assent on 23 January 2020, becoming the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A 2020). The passage of this legislation confirmed the UK Parliament's approval of the Withdrawal Agreement in accordance with domestic constitutional arrangements.

Following the UK Parliament's approval, the Withdrawal Agreement was signed by Prime Minister Boris Johnson, European Council President Charles Michel and European Commission President Ursula von der Leyen. On 29 January 2020, the European Parliament approved a resolution in favour of concluding the Withdrawal Agreement and the UK's Permanent Representative to the EU deposited the instrument of ratification to the European Council ahead of its adoption on 30 January 2020. 

When did the Withdrawal Agreement come into force?

Article 185 of the Withdrawal Agreement provided that the treaty would come into force on the earlier of the following:

  • where both the UK and EU have ratified the Withdrawal Agreement and notified the Secretary General of the European Council that they have done so, the day following the end of the Article 50 period
  • the first day of the month following the ratification of the Withdrawal Agreement by both the UK and EU and notification of ratification to the Secretary General

The ratified Withdrawal Agreement therefore entered into force on 1 February 2020.

What does the Withdrawal Agreement cover?

The Withdrawal Agreement is structured as follows:

Provision

Summary

Part I

Common provisions

Cross-cutting clauses in relation to the interpretation and operation of the Withdrawal Agreement. These include territorial scope, definitions and how its provisions will be given effect in the UK.

Part II

Citizens' rights

Protections for the rights of EU citizens in the UK and UK citizens in the EU, preserving their right to live, work and study in their host countries.

Part III

Separation provisions

Provisions relating to the decoupling of the UK from the EU's legal framework in respect of various matters.

These include provisions relating to:

 

• market access for goods

• ongoing customs, VAT and excise matters

• intellectual property

• ongoing police and judicial co-operation in both criminal and civil/commercial matters

• the protection of data obtained before the end of transition

• ongoing public procurement procedures

• Euratom issues

• ongoing EU judicial/administrative processes, and

• privileges and immunities

 

Part IV

Transition period

Provision for a standstill transition period until 31 December 2020 to allow for the negotiation of a future trade deal between the UK and EU, during which the UK will still be treated as an EU Member State in most respects and will continue to apply EU law.

Part V

Financial settlement

A mechanism to allow for the calculation of amounts to be paid by the UK to the EU in view of financial commitments which the UK signed up to during its membership.

Part VI

Governance arrangements

Arrangements to allow for the establishment of a Joint Committee to perform certain governance functions including resolution of disputes between the parties in relation to the interpretation of the Withdrawal Agreement and obligations under it.

Protocol on Ireland/Northern Ireland

Provisions to allow for the application in Northern Ireland of a number of EU customs rules in circumstances where a future trade deal has not been concluded by the end of the transition period.

Protocol on UK Sovereign Base Areas in Cyprus

Arrangements for the continued application of certain elements of EU law on UK bases in Cyprus to ensure no loss of rights for Cypriot civilians living and working in those areas. Such areas will continue to be part of the EU's customs territory.

Protocol on Gibraltar

Provisions on bilateral co-operation on citizens' rights, certain products, environment, and police and customs, as well as a bilateral agreement in relation to taxation and the protection of financial interests.

What is the Political Declaration?

Under Article 50 TEU, the Withdrawal Agreement must take account of the future relationship between the leaving Member State and the EU. This means that during the withdrawal negotiations, both sides must come to some agreed view as to what their future trading relationship will look like once the Member State has departed. This makes sense, as one of the functions of the Withdrawal Agreement is to provide a bridge between EU membership and that future trading relationship, so the latter will in many ways shape the content of the former.

The Political Declaration is an agreed set of commitments and parameters, which were intended to serve as a backdrop to the negotiation of the Withdrawal Agreement and would guide the negotiations for a future trade deal following the UK's withdrawal from the EU. Given the connection between the two, changes were made to the November 2018 version of the Political Declaration as part of the renegotiation of the Withdrawal Agreement. These included stripping out references to the Northern Ireland backstop which was removed from the Withdrawal Agreement.

The Political Declaration is structured in five parts as follows:

Provision

Summary

Part I

Basis for Co-operation

The parties commit to establishing a future trading relationship on the basis of shared principles including in relation to human rights, democracy, the rule of law, mutual co-operation globally, non-proliferation of nuclear weapons and high levels of data protection.

Part II

Economic Partnership

This part sets out an aspiration to conclude an ambitious and wide-ranging future economic partnership encompassing a Free Trade Agreement and co-operation in particular sectors.

The aim for trade in goods is to preserve the current situation in which there are no tariffs or quotas on trade in goods between the UK and the EU.

Trade in services is left more open, although the Political Declaration sets out principles of market-access, non-discrimination and regulatory autonomy and co-operation.

Part III

Security Partnership

In terms of law enforcement, the aim is for the future relationship to cover data exchange, operational co-operation between law enforcement agencies, judicial co-operation in criminal matters and anti-money laundering and criminal financing.

On foreign policy and defence, the need for future co-operation is recognised while respecting the autonomy of both parties.

Part IV

Institutional and other Horizontal Arrangements

An overarching institutional framework will be underpinned by mechanisms for dialogue and arrangements for setting the direction and implementing the future relationship.

Dispute resolution provisions will allow for expedient problem-solving using a flexible mediation mechanism in some areas. However, in some instances the Joint Committee established under the Withdrawal Agreement can be used and may refer the dispute to an independent arbitration panel.

Part V

Forward Process

A commitment is made for the parties to begin formal negotiations on the future relationship as soon as the UK leaves the EU, and endeavour to have a new relationship framework in place by the end of the transition period.

Article 184 of the Withdrawal Agreement states that the UK and the EU will use their 'best endeavours' to negotiate the future relationship 'expeditiously' on the basis of the Political Declaration and to ensure 'to the extent possible' that this relationship is in place before the end of the transition period.

What is the legal status of these documents?

The Withdrawal Agreement is a legally binding international treaty. As such, it binds the UK in international law rather than creating domestic rights that can be relied on in UK courts. However, elements of it are incorporated into UK law through the EU(WA)A 2020 which creates domestic rights-for instance in relation to the citizenship provisions.

By contrast, the Political Declaration is not legally binding at any level and is simply a political statement of intent in terms of a basis for negotiations on a future trade deal once the UK has left the EU. It is essentially aspirational in nature. It does not require any particular form or content of a deal, or indeed require that there be any future deal at all. Indeed, it seems to have played relatively little part in the negotiations between the UK and EU during 2020.

Transitional arrangements

The November 2018 version of the Withdrawal Agreement made provision for a transition period (referred to by the UK government as the implementation period) from 31 March 2019, the original date on which the UK was due to leave the EU, until 31 December 2020. The transitional arrangements were carried through into the Withdrawal Agreement in October 2019, with an option to extend by mutual agreement. That option was required to have been exercised by 1 July 2020, and was not. Indeed, the government legislated to preclude any Minister agreeing to an extension to the transition period.

The transition period was intended to provide a standstill period during which businesses could adapt, and the UK and EU could negotiate a future trade deal. As such, apart from participation in EU institutions and governance structures and some other exceptions, the UK was treated as if it continued to be an EU Member State in EU law for the duration of the transition period.

The revisions made to the Withdrawal Agreement in October 2019 did not include any update to the length of the transition period, mainly because its end was defined to coincide with the end of the EU's Multiannual Financial Framework. This meant that almost half of the original 21 month period had been lost, leaving very little time for a trade deal to be agreed.

The effect of the transition period

For the most part, in practice not much change was seen in the legal landscape during the transition period. This is because although the UK ceased to be a Member State at the point of exit, the transitional arrangements in the Withdrawal Agreement provided for the UK to be treated as a Member State for many purposes during transition.

During the transition period EU law largely continued to apply in the UK as if it was still an EU Member State. Any changes or additions to EU law made during the transition period also applied. The UK remained part of the EU single market and customs union and continued to respect the four freedoms of movement of goods, people, services and capital, as well as continuing to apply the EU customs code to imports into the UK from third countries.

However, the UK was excluded from decision-making in respect of new laws and the administration and governance of the EU and will not participate in EU institutions, agencies, bodies and offices, except to the limited extent specified in the Withdrawal Agreement.

During the transition period, the UK was unable to commence any trade agreements of its own with non-EU countries (although it could negotiate and ratify them so long as they did not enter into force during the transition period). However, that did not mean that the UK would automatically continue to benefit from the EU's own trade deals with third countries.

A footnote to Article 129(1) of the Withdrawal Agreement provided for the EU to notify the counterparties to its trading agreements that the UK is to be treated as if it was still a member of the EU during the transition period. However, this was essentially a request for third countries to treat the UK as such, and they were under no obligation to do so.

More widely, the UK continued to be bound by the EU's obligations stemming from international agreements. It continued to apply the EU's Common Foreign and Security Policy, including implementation of the EU's sanctions regime. The UK could abstain from certain actions under the EU Common Security and Defence Policy.

Internally, the EU's Justice and Home Affairs policy continued to apply, including the European Arrest Warrant (EAW). However, EU Member States could refuse to surrender their own nationals to the UK in view of fundamental principles of national law. Where a Member State did so, the UK could make a similar decision in relation to that Member State.

Germany stated that it would no longer surrender its nationals to the UK under the EAW in reliance on Article 185. This was unsurprising as Germany has a constitutional bar to the extradition of its nationals to non-EU countries. Other countries, including Austria and Slovenia also notified that they would not surrender nationals to the UK under the EAW.

The transitional arrangements contained derogations in respect of certain matters, including the EU Common Agricultural Policy and EU legislation on farming subsidies. The government introduced separate domestic legislation, which entered into force on exit day, to allow for the continuation of direct payments to farmers, ensuring that the scheme continues for 2020, pending the introduction of a new domestic scheme.

Cross-border disputes

During the transition period, the current EU civil co-operation rules continued to apply.

The Rome I and Rome II Regulations continued to apply in the UK to determine the applicable law for contracts and non-contractual damages in respect of contracts concluded and damage suffered during the transition period.

Likewise, for legal proceedings commenced before the end of the transition period, the Brussels I Regulation on jurisdiction and enforcement continued to apply, as did the Brussels IIa Regulation on divorce and separation and the EU Maintenance Regulation on maintenance payments.

As explained in the European Commission's guidance on the Withdrawal Agreement, this meant that where at the end of the transition period:

  • litigation was pending between a UK party and an EU party before a UK court, the UK court remained competent to apply EU law in the case
  • proceedings had been commenced against a UK party in the court of an EU Member State, EU law on the recognition and enforcement of judgments applied in the UK to that court's judgment

EU law on service, co-operation between UK and courts in EU Member States, judicial co-operation, legal aid and meditation also applied to actions taken and requests made before the end of the transition period.

Data transfers

The Withdrawal Agreement covers data processed or obtained before the end of the transition period, or on the basis of the Withdrawal Agreement. EU data protection law applies in the UK in respect of the processing of personal data of subjects outside the UK where the data was processed:

  • under EU law before the end of transition period, or
  • after the end of the transition period under the Withdrawal Agreement

During the implementation period, the General Data Protection Regulation (EU GDPR), continued to apply in the UK. This meant that organisations that were EU GDPR compliant on exit day did not need to take any further action to remain compliant during the implementation period. This was confirmed in a statement by the Information Commissioner's Office (ICO).

The ICO continued to engage in the co-operation and consistency mechanisms under the EU GDPR and act as a lead supervisory authority under the EU GDPR during the implementation period. The ICO could no longer participate in the European Data Protection Board (EDPB) but ICO officials could be invited in certain circumstances to attend EDPB meetings during the transition period where there was a specific UK interest.

Under the EU GDPR, personal data can only be transferred to countries outside the EU which guarantee an 'adequate' level of protection for that data. A decision on whether the protection offered by a third country is adequate is made by the European Commission.

The provisions in Article 71(1) of the Withdrawal Agreement would not apply if the processing was covered by an adequacy decision in relation to the UK (Article 71(2)). If an adequacy decision ceased to apply, the UK would have to ensure its data processing was 'essentially equivalent' to EU law (Article 71(3)).

On the EU side, data obtained from the UK before the end of the transition period, or after the end of the transition period under the Withdrawal Agreement, was not treated any differently to data obtained from an EU Member State simply on the basis that it originated from the UK.

Public procurement procedures

Public procurement procedures which were commenced, but not concluded, before the end of the transition period continue to be subject to EU public procurement rules until the award of the relevant public contract(s).

Likewise, EU public procurement rules will continue to apply to the award of call-off contracts made under a public framework agreement, where that framework agreement was launched before the end of the transition period. In such cases EU rules will continue to apply until the relevant framework agreement ends.

Mutual recognition of qualifications

Where the UK and EU Member States have recognised certain professional qualifications before the end of the transition period, this recognition shall continue after the end of the transition.

The position of the Court of Justice of the European Union

During the transition period

During the transition period, EU institutions and other bodies, offices and agencies continued to exercise their powers under EU law in relation to the UK. In particular, the Court of Justice of the European Union had jurisdiction in relation to the UK, as provided for in the EU Treaties.

Where proceedings were commenced by or against the UK before the Court of Justice of the European Union prior to the end of the transition period, these will proceed to final determination, including any appeals. The Court of Justice of the European Union could also continue to hear preliminary references from UK courts during the transition period.

The UK, and UK lawyers, were able to participate in cases brought before the Court of Justice of the European Union during the transition period.

After the transition period

UK courts may refer questions about EU law referred to in the citizens' rights provisions of the Withdrawal Agreement to the Court of Justice of the European Union for eight years following the end of the transition period. Where such a reference is made, the interpretation of the Court of Justice of the European Union will be binding on UK courts.

New infringement cases against the UK, and cases in relation to breaches by the UK of the transitional arrangements in the Withdrawal Agreement, may be brought before the Court of Justice of the European Union for four years after the end of the transition period.

In addition, enforcement actions and preliminary references to the Court of Justice of the European Union can be made during and after the transition period (without a four-year time limit) in respect of the interpretation and application of certain provisions of EU law relating to the financial settlement.

The Court of Justice of the European Union will also be able to use its annulment powers under Article 263 of the Treaty on the Functioning of the European Union to annul decisions taken by EU bodies during the transition period in relation to the UK, or decisions relating to issues arising before the end of the transition period, but decided afterwards.

More broadly, courts in EU Member States may make preliminary references to the Court of Justice of the European Union for rulings on the interpretation of the Withdrawal Agreement. The UK has a right to be informed of the domestic proceedings that led to any such reference.

The UK will have the right to participate in any proceedings brought before the Court of Justice of the European Union in relation to citizens' rights, the financial settlement or as the result of a domestic EU preliminary reference and UK-qualified lawyers will be able to provide representation and assistance in such proceedings.

As discussed below, the Court of Justice of the European Union will also have a role in interpreting points of EU law arising out of the dispute resolution procedure.

Interpretation of EU law in the Withdrawal Agreement by UK courts

UK courts must interpret references to EU law in the Withdrawal Agreement in line with any EU judgments handed down during the transition period. Article 4(5) of the Withdrawal Agreement requires that EU judgments following the end of the transition period must be given 'due regard' by UK courts when interpreting and applying the Withdrawal Agreement.

These provisions are given domestic effect in UK law by the European Union (Withdrawal) Act 2018 (EU(W)A 2018), as amended by EU(WA)A 2020.

Withdrawal Agreement provisions that do not apply until the end of transition period

Under Article 185 of the Withdrawal Agreement, the following provisions, with some exceptions, did not come into force until the end of the transition period (referred to in the UK legislation as 'IP completion day'):

  • Part II provisions on citizens' rights
  • Part III separation provisions
  • Title I of Part VI, which sets out the position on jurisdiction of the Court of Justice of the European Union and UK participation in EU cases on matters arising in relation to citizens' rights and the separation provisions following transition
  • Articles 169–181 setting out dispute settlement procedures in the interpretation and application of the Withdrawal Agreement
  • Protocol on Ireland/Northern Ireland
  • Protocol on Sovereign Base Areas in Cyprus

The Protocol on Gibraltar applied during the transition period but, apart from Article 1 (on citizens' rights), ceased to apply at the end of it.

What are the governance arrangements?

The governance and institutional arrangements in the Withdrawal Agreement involve a number of tiers outlined below.

The Joint Committee

At the top is the Joint Committee made up of representatives of the UK and EU. The Joint Committee is responsible for the implementation and application of the Withdrawal Agreement and either party can refer to it any issue relating to implementation, application or interpretation.

The Joint Committee must make decisions by mutual consent and those decisions will be binding on the parties. It can also amend its own rules of procedure and, most importantly, the Withdrawal Agreement itself for four years after the end of the transition period:

'to correct errors, to address omissions or other deficiencies, or to address situations unforeseen when [the] Agreement was signed, and provided that such decisions may not amend the essential elements of this Agreement.'

In addition, the Joint Committee has responsibility for several other important functions in terms of how the arrangements in the Withdrawal Agreement will operate. For example, under Article 5 of the Protocol on Ireland/Northern Ireland, before the end of the transition period, the Joint Committee was charged with establishing the criteria for considering that goods brought into Northern Ireland are not at risk of being moved into the EU. Details of decisions made in the Joint Committee are published by the Cabinet Office.

The Specialised Committees

The next tier of governance is formed of Specialised Committees to which the Joint Committee can delegate certain responsibilities (Article 164(5)(a)). The following Specialised Committees were established by the Withdrawal Agreement (Article 165), with the Joint Committee able to add more if it wishes (Article 164(5)(b)):

  • Citizens' rights
  • Other separation provisions
  • Protocol on Ireland/Northern Ireland
  • Protocol on Sovereign Base Areas in Cyprus
  • Protocol on Gibraltar
  • Financial provisions

The Specialised Committees established by the Withdrawal Agreement are composed of experts representing both the UK and EU.

The Specialised Committees may draw up draft decisions and recommendations and refer them for adoption by the Joint Committee. The existence of a Specialised Committee does not prevent either the UK or EU referring any matter directly to the Joint Committee.

The rules of procedure for the Joint Committee and Specialised Committees are set out in Annex VIII to the Withdrawal Agreement with each sitting at least annually.

The Joint Consultative Working Group

Lastly, there is a Joint Consultative Working Group established under Article 15 of the Protocol on Ireland/Northern Ireland.

The Working Group's main function is as a forum for sharing information and mutual consultation in relation to the arrangements in the Protocol. The Working Group came into being when the Withdrawal Agreement entered into force, but the provision that it meets 'at least once a month' will not come into force until the Protocol is enacted.

It is through the Working Group that the EU will provide information on EU laws that would be required to be adopted in relation to Northern Ireland under the Protocol, and through which relevant information from the UK would flow to EU bodies and institutions.

The Working Group can make no binding decisions on matters before it and will work under the supervision of the Specialised Committee on Ireland/Northern Ireland.

How are disputes in relation to the Withdrawal Agreement managed?

In the event of a dispute on the interpretation of the Withdrawal Agreement, initial attempts at a political resolution will take place in the Joint Committee (Article 169). If no solution is found, either party can refer the dispute to arbitration (Article 170(1)). The decision of the arbitration panel will be binding on both parties (Article 175).

Under Article 171 of the Withdrawal Agreement, there will be a list of 25 possible members for the arbitration panel, with the EU and UK proposing ten each and agreeing the remaining five jointly. Panellists cannot work for the EU, any Member State government or the UK government. Each panel will be made up of five panellists-two proposed by each of the parties with the chair chosen by consensus, or by the Secretary-General of the Permanent Court of Arbitration where no consensus can be reached.

An arbitration panel will usually give a decision within 12 months of a matter being referred to it (Article 173(1)). Where any dispute involves a question regarding the interpretation of EU law, the arbitration panel must refer it to the Court of Justice of the European Union, the decision of which will be binding (Article 174).

Once the arbitration panel has made a decision, the parties will negotiate a 'reasonable' timeline for its implementation (Article 176). Where no consensus can be reached, the question of what is a reasonable period of time will be referred back to the panel. Any period for implementation can be extended by mutual agreement (Article 176(5)).

The party that brought the original dispute can ask the arbitration panel to review the measures taken by the other party to comply with its ruling (Article 177). Where the panel finds that its decision has not been complied with, it may impose a financial penalty to be paid to the aggrieved party (Article 178(1)). Again, if there is a question of interpretation of EU law raised, the panel is obliged to refer it to the Court of Justice of the European Union.

If the financial penalty has not been paid within one month, or the panel's decision is still not complied with after six months, the Withdrawal Agreement allows the complainant to take proportionate steps to suspend elements of the application of the Withdrawal Agreement itself, except for the provisions in relation to citizens' rights, or parts of any other agreements between the EU and the UK (Article 178(2)). Such suspension only lasts until compliance is restored and is subject to review by the arbitration panel (Article 178(3) and (5), Article 179).

An important point to note is that Court of Justice of the European Union is not the dispute settlement body for the Withdrawal Agreement-its role is limited to determinations on the interpretation of any EU law that applies by virtue of the Withdrawal Agreement.

Implementation of the Withdrawal Treaty

It is important to note that ratification and implementation are distinct concepts. Ratification is an act of international law whereby a signatory state indicates its intention to be bound by the treaty. Implementation gives the ratified instrument domestic legal effect in accordance with the relevant legal and constitutional requirements.

With some exceptions, most international treaties are ratified by the UK only after the requirements of section 20 of the Constitutional Reform and Governance Act 2010 (CRGA 2010) have been met. This requires that the text of the treaty be laid before each House of Parliament for 21 sitting days with an explanatory memorandum. During that time either House can resolve that it should not be ratified. If the resolution comes from the House of Lords, the treaty can be ratified regardless. However, a resolution from the House of Commons will force the government to lay the treaty again for another 21 sitting days with a further explanatory memorandum. By this means, MPs can hold up ratification indefinitely.

Originally, EU(W)A 2018, s 13 sought to overlay a further set of requirements for the ratification of the Withdrawal Agreement. It stated that the Withdrawal Agreement could not be ratified by the UK unless it had been laid before both Houses, approved by the House of Commons and considered by the House of Lords, and an Act of Parliament implementing it had been passed.

The EU(WA)A 2020 was introduced by the government to implement the Withdrawal Agreement in domestic law. Its passing therefore fulfilled one of the preconditions for ratification set out in section EU(W)A 2018, s 13. However, in an attempt to short circuit the process, the EU(WA)A 2020 introduced provisions repealing EU(W)A 2018, s 13, and disapplying CRGA 2010 with respect to the initial ratification of the Withdrawal Agreement (although not subsequent changes to it). This meant that when the EU(WA)A 2020 was passed the government was able to ratify the Withdrawal Agreement without the need to take any further steps.

On the EU side, the European Council endorsed the Withdrawal Agreement on 17 October 2019 and authorised its signature on 21 October 2019. Following ratification by the UK, it then passed the Withdrawal Agreement to be approved by a majority of the European Parliament following which it was concluded by the European Council on approval requiring at least 20 of the EU27 Member States with 65% of the EU population (qualified majority).

The EU did not require any implementing legislation on its side as the Withdrawal Agreement itself ensures that the EU law that it makes applicable applies in respect of the UK during the transition period and thereafter as necessary.

Notable provisions/pointers from a public law perspective

The Withdrawal Agreement has fundamental constitutional implications for the UK, primarily during the transition period, but potentially thereafter. Article 4 of the Withdrawal Agreement states that:

  • the Withdrawal Agreement itself shall have primacy over UK domestic law in the same way as EU law did before exit (and during the transition period)
  • the Withdrawal Agreement shall have direct effect, meaning that where its provisions are clear, precise and unconditional they can be relied on before a UK court
  • the UK must provide a power in domestic legislation for UK courts and 'administrative authorities' to disapply UK laws which are inconsistent or incompatible with the Withdrawal Agreement-an interesting question here is what the UK will interpret administrative authorities to mean when providing a power to disapply legislation
  • UK courts must follow judgments of the Court of Justice of the European Union made before the end of the transition period when interpreting the Withdrawal Agreement and EU law, and must have 'due regard' to decisions made after the end of the transition period in relation to such matters, and
  • references to EU law in the Withdrawal Agreement include new legislation or amendments to existing EU laws that come into force during the transition period, which in circumstances where the transition period is extended would include laws into which the UK has had no input

All of this adds up to a quite extraordinary transfer of sovereignty from the UK to the EU-much more than when the UK was a Member State, given that it is no longer be able to influence the laws to which it is subject and has no representative member on the Court of Justice of the European Union.

However, the intention was that this would last only for a limited period of time (limiting the UK's need to comply with laws into which it has had no input while a Member State), and was necessary to ensure a period of legal stability before the commencement of any future trading relationship negotiated before the end of the transition period.

The Joint Committee

The Joint Committee, with its power to rewrite parts of the Withdrawal Agreement to correct deficiencies for four years after the end of the transition period, has been described by the House of Lords EU Committee as a 'uniquely powerful and influential' body. Any such amendments will, like the rest of the Withdrawal Agreement, have supremacy over UK domestic law.

The Joint Committee's meetings are held in private and its decisions and recommendations are not published by default, although either side can decide to publish them. The EU(WA)A 2020 states that the UK's representative on the Joint Committee must be a government minister, so there is at least some scope for MPs to seek information about its workings, although it is notable that the EU(WA)A 2020 includes reporting requirements in relation to disputes brought before the Joint Committee, but not other details.

The power of the Joint Committee together with this lack of transparency is likely to attract criticism should it make any controversial changes to the Withdrawal Agreement.

Northern Ireland

The Protocol on Ireland/Northern Ireland has important constitutional implications for Northern Ireland. Firstly, it includes a consent mechanism whereby members of the Northern Ireland Assembly must vote every four years for Northern Ireland to continue to be bound by certain Articles in the Protocol. These include provisions relating to:

  • customs and the movement of goods
  • protection of the UK's internal market
  • technical regulations and approvals
  • VAT and excise
  • the single electricity market
  • State aid

Where consent is withheld, the relevant provisions will cease to have effect after two years.

In the event that consent to the continued application of the provisions is secured from a majority of Assembly members designated as unionist and a majority of Assembly members designated as nationalist (as opposed to a bare majority of all MLAs taken together) consent does not need to be sought again for eight years (instead of four). Further detail on the UK government's position on the consent provisions was set out in a declaration published on 19 October 2019 ahead of Parliament's consideration of the revised deal.

Secondly, should no trade deal be concluded between the UK and EU prior to the end of the transition period, Northern Ireland will continue to apply many EU customs rules beyond transition, whereas the rest of the UK will not. This will serve to create a customs and regulatory border between Northern Ireland and Great Britain unless and until such a trade deal is concluded which replaces the provisions of the Protocol on Ireland/Northern Ireland.

Further details on implementation of the Northern Ireland Protocol were set out in the government's Command Paper published on 20 May 2020. 

The Northern Ireland Protocol also caused controversy during the passage of the United Kingdom Internal Market Bill which, when the Bill was first introduced to Parliament, included clauses that would have allowed the government to legislate through statutory instruments to breach the Northern Ireland Protocol. These measures were described by the government as a safety-net should no future trade deal be concluded. However, the EU considered them to represent a potential breach of the Withdrawal Agreement and commenced legal proceedings.

The relevant clauses were removed from the Bill before it was passed following agreement between the UK and EU on a range of issues related to the implementation of the protocol.

Domestic implementation

Aside from those rights under it which may have direct effect, the Withdrawal Agreement takes effect in domestic law only through domestic legislation (ie the EU(WA)A 2020, amended EU(W)A 2018 and related secondary legislation). For example, it is through the EU(WA)A 2020 that the UK Parliament agrees to limit its sovereignty by providing for the Withdrawal Agreement to take precedence over UK legislation, in the same way that the European Communities Act 1972 (ECA 1972) gave precedence to EU law.

This gives rise to a complex legislative framework comprising the EU(W)A 2020, the EU(W)A 2018 (as amended), the ECA 1972 (the effect of which was preserved, with amendments, during the transition period) and the Withdrawal Agreement itself.

For further reading on the legislation, see our insight: Brexit-key legislation explained.


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