Scrutiny of international agreements: treaties considered on 19 March 2019
Chapter 1: Agreements drawn to the special attention of the House
Agreement between the United Kingdom of Great Britain and Northern Ireland and the Swiss Confederation on Citizens’ Rights following the Withdrawal of the United Kingdom from the European Union and the Free Movement of Persons Agreement (CP 64, 2019)1
Introduction
1.The Agreement between the UK and the Swiss Confederation on Citizens’ Rights Following the Withdrawal of the UK from the EU and the Free Movement of Persons Agreement (‘the Citizens’ Rights Agreement’) was laid on 28 February 2019, and the scrutiny period is scheduled to end on 4 April. It was considered by the EU Justice Sub-Committee at its meeting on 12 March.
2.This new bilateral Agreement is based upon the Free Movement of Persons Agreement (FMOPA) between the EU and Switzerland, which entered into force in 20022 and currently governs the rights of EU citizens in Switzerland and Swiss nationals in the EU.3 The FMOPA covers migration and residence rights, social security co-ordination (including reciprocal healthcare), economic rights and mutual recognition of professional qualifications.
3.This is the fifth agreement with Switzerland that the Committee has considered.4 However, the Citizens’ Rights Agreement, unlike most of the roll over agreements we are examining, seeks not to ensure continuity, but to provide mechanisms for the “orderly winding down”5 of the existing arrangements between the UK and Switzerland, under the FMOPA, while ensuring the protection of some pre-existing rights for UK and Swiss nationals after Brexit. There are clear parallels between the provisions on citizens’ rights contained in the proposed Withdrawal Agreement with the European Union. The Citizens’ Rights Agreement will affect the rights of 14,000 Swiss nationals living in the UK and 40,000 UK nationals living in Switzerland, as well as around 2,600 frontier workers in Switzerland.6
4.The Government has announced that it will partly implement the agreement via its ‘settled status’ scheme for EU nationals. Thus, Swiss nationals who wish to remain in the UK after Brexit will be obliged to apply for settled status in the same way as EU citizens. However, the Government’s Explanatory Memorandum (EM) makes clear that as the UK’s relationship with Switzerland has a different legal basis from its relationship with the EU, some arrangements will necessarily differ.
Governance
5.Part One of the Agreement, entitled ‘Common Provisions’, provides both the definitions and framework provisions for the entire Agreement, including the governance provisions. It is currently unclear whether the UK will secure a transition or implementation period after 29 March. This agreement applies in either scenario. What this means in practice is that if there is a transition, the UK will remain bound by the FMOPA during that period; whereas if no extension is agreed under Article 50 TEU, then the ‘specified day’ for the purposes of the Agreement would be exit day (likely in this scenario to be 29 March).
6.Part One includes a “duty of good faith”,7 which is similar but not identical to the one found in the Withdrawal Agreement with the EU.8 It also provides for a Joint Committee for the “management and proper application and monitoring” of the Agreement.9 Notably, it appears that the Joint Committee would be responsible for the settlement of disputes between the parties to the Agreement.10 The Agreement does not provide for any other means of state to state dispute resolution, but it does include a “right of appeal” for individuals. This cross references Article 11 of the FMOPA, which provides, among other things, that persons would have the opportunity “to appeal to the competent national judicial body” in respect of decisions on appeal, or the absence of a decision within a reasonable period of time.
7.We asked officials about the operation of these provisions. In response, they indicated that the parties had determined that the context of the Agreement meant that they did not need to include a provision for arbitration. In terms of the appeal mechanism, the key routes of challenge available for individuals would be a statutory right of appeal (where available), judicial review, and administrative review. Under the settled status scheme, Swiss citizens are promised the same rights of appeal as EU and EEA/EFTA citizens.11
General Provisions
8.The ‘General Provisions’ are contained in Part Two of the Agreement. The EM provides a helpful, plain English summary of these provisions, which is not rehearsed in detail here. In short, UK nationals in Switzerland at the ‘specified date’ will be able to remain, as will Swiss nationals who have been living lawfully in the UK. After five years residence, those within the scope of the Agreement will be able to apply for settled status in the UK or permanent residence in Switzerland.
9.Although the Agreement makes provision that a charge could be applied for the grant of residence status, officials have confirmed that there will be no fee when the settlement scheme is opened on 30 March 2019. Officials have also indicated that they understand that the Swiss Government will not charge any new fees for UK nationals exercising their rights under the Agreement.
10.The Agreement would allow residence rights to be lost based on conduct. The nature of this conduct is not clearly spelled out on the face of the Agreement.12 In response to questions from Committee staff, the Government noted that after the specified date, if a Swiss national was convicted and received a custodial sentence of 12 months or more, they would be considered for deportation under the UK Borders Act 2007.13 Moreover, any “serious and persistent criminality” below the automatic deportation threshold in the 2007 Act might still be considered to fall within the terms of the Immigration Act 1971, where deportation is considered to be “conducive to the public good”.14 For UK citizens in Switzerland, the Government has advised that offences committed after the FMOPA ceases to apply will be assessed according to the Swiss Foreign Nationals and Integration Act 2019, as is the case for other non-EU/EFTA nationals.
11.As the Citizens’ Rights Agreement is designed to wind down the existing free movement arrangements between the UK and Switzerland, it does not make clear provision for those UK nationals wishing to move to Switzerland after exit day in a ‘no deal’ scenario. However, in an annex to a letter dated 7 March to Lord Boswell of Aynho, Chair of the EU Committee, the Secretary of State for Exiting the EU, Rt Hon Stephen Barclay MP, stated:
“We are in discussions with Switzerland on transitional arrangements for UK workers wishing to move to Switzerland and Swiss workers wishing to move to the UK after exit in a no deal scenario. We are close to reaching an agreement and details on this will be published in the near future.”15
The provision of services
12.In our report Scrutiny of international agreements: Treaties considered on 12 March 2019, which addressed the EU-Swiss Trade Agreement,16 we noted with concern that trade in services, which makes up just over half of UK-Swiss trade, was excluded. The provisions in the present Agreement are thus particularly important, pending any future agreement on trade in services.
13.Article 23 of the Agreement relates to the rights of persons providing services. Notably, although service providers would be able to continue to benefit from the current 90-day service provision rules17 for at least five years following the specified date, any decision to extend that period for a further five years would be made by decision of the Joint Committee. This would appear to subject existing service providers to continuing uncertainty. Committee staff enquired about this issue, asking whether the operation of the review clause would be subject to parliamentary scrutiny. In response, officials advised that no decisions had yet been taken on scrutiny arrangements for such a decision, given that it would not take place until five years after the specified date, and “the issue may be superseded by a new trade in services agreement with Switzerland”.
Social security co-ordination
14.Part Three of the Agreement makes provision for the coordination of social security systems and provides that the listed EU regulations on social security coordination would continue to apply from the specified date, thereby ensuring that citizens who moved between the UK and Switzerland before the specified date were not disadvantaged. The Agreement would also protect the rights of people requiring cross border medical treatment (including planned medical treatment where authorisation was requested before the specified date).
Mutual recognition of professional qualifications
15.Part Four of the Agreement relates to the mutual recognition of professional qualifications. The UK and Switzerland have agreed that UK and Swiss professionals will continue to have their professional qualifications recognised where they obtained a decision on recognition before the specified date. A separate provision would provide for a four-year grace period for a recognition decision in circumstances where a person has obtained or was in the process of obtaining a qualification prior to the specified date.
16.Professionals providing cross border services in regulated professions under the 90-day service provision rule (see paragraph 13 above) would continue to benefit from the rules in respect of temporary and occasional services set out in the Professional Qualifications Directive and the Lawyers Services Directive.18 Officials indicated that the Government had held regular discussions with legal profession stakeholders and regulators in the course of drawing up these provisions.
Consultation
17.On the question of consultation more generally, the EM indicates that the Government engaged with the devolved administrations on the Agreement and shared a draft text in advance of it being agreed. We note this example of good practice and hope that it will be applied more consistently across the agreements that the Government is seeking to roll over (see also paragraphs 38–39).
18.The patchwork nature of the agreements negotiated with the Swiss Government makes scrutiny particularly difficult. We call on the Government, as far as possible, to cross reference related agreements in Explanatory Memoranda.
19.We draw special attention to the Agreement between the UK and the Swiss Confederation on Citizens’ Rights Following the Withdrawal of the UK from the EU and the Free Movement of Persons Agreement, on the grounds that:
- It is politically important and gives rise to issues of public policy that the House may wish to debate prior to ratification.
Trade and Partnership Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the State of Israel [CP 59]19
Introduction
20.The UK-Israel Trade and Partnership Agreement was laid on 26 February 2019, and the scrutiny period is scheduled to end on 2 April. It was considered by the EU External Affairs Sub-Committee at its meeting on 13 March.
21.The UK-Israel Trade and Partnership Agreement is a short-form agreement that incorporates, mutatis mutandis,20 three different agreements (the ‘precursor agreements’):
(a)The EU-Israel Association Agreement21—as well as liberalising trade, it provides a framework for political dialogue and promotes cooperation in a number of areas, including in science and technology.
(b)The EU-Israel Procurement Agreement22—it builds on the World Trade Organization’s General Procurement Agreement (GPA) that came into force in 1996, broadening its scope. In conjunction with the GPA, it liberalises specific public procurement markets.
(c)The EU-Israel Conformity Assessment Agreement23—it reduces the technical barriers to trade in pharmaceutical products through the mutual recognition of each party’s inspection regimes. Practically, this means that Israeli inspectors do not need to inspect EU facilities and vice versa.
22.The UK-Israel Trade and Partnership Agreement seeks to ensure continuity of effect with these three precursor agreements.
23.An overview of the UK’s trade with Israel is given in Box 1.
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Israel is the UK’s 46th-largest trading partner, amounting to 0.3% of total UK trade. Bilateral trade in both goods and services amounted to £3.9 billion in 2017 and the UK had a trade surplus. Major UK goods exports to Israel include vehicles, machinery and mechanical appliances, pharmaceutical products, electrical machinery and equipment, as well as optical, photographic, cinematographic and medical equipment. Major UK goods imports from Israel include plastics, precious stones and metals, machinery and mechanical appliances, electrical machinery and equipment, as well as optical, photographic, cinematographic and medical equipment. |
Source: Department for International Trade, Continuing the United Kingdom’s trade relationship with Israel, February 2019: https://www.gov.uk/government/publications/continuing-the-uks-trade-relationship-with-israel-parliamentary-report [accessed 14 March 2019]
Key differences between the UK-Israel Trade and Partnership Agreement and the precursor agreements
24.The Agreement’s aim is to provide continuity in UK-Israel relations, and changes have been kept to a minimum. The paragraphs below provide a summary of the key amendments, which are designed either to ensure continuity of effect with the existing EU-Israel Agreement, or to remove an obligation that would be inappropriate in a bilateral context.
Governance arrangements
25.The bodies governing the EU-Israel Agreement have been adapted to a UK context and slightly modified in their composition and functioning. The Association Council and Association Committee are renamed the Joint Council and Joint Committee, and instead of meetings being held “at ministerial level” (as in the EU-Israel Trade Agreement) they will be attended by Government representatives from both sides. Previously adopted decisions by the EU-Israel Association Council or the Association Committee will be considered as adopted by the UK-Israel Joint Council or the Joint Committee.
Future amendments to the Agreement
26.An amendment clause has been added (Article 8). This sets out that any amendments must be agreed in writing and will enter into force on an agreed date following the completion of domestic legal requirements and procedures. For modifications of Annexes and Protocols Art. 8(2) additionally establishes a procedure with a central role for the Joint Committee. This does not mean that amendments need to be made to the Agreement, but provides a mechanism for making them if required.
27.We reiterate the point made in our report Scrutiny of international agreements: Treaties considered on 26 February 2019,24 where we called on the Government to state clearly the circumstances in which, where significant amendments are made, they would be subject to the scrutiny processes provided for by the Constitutional Reform and Governance Act 2010. While this information has not been included in the parliamentary report for this Agreement, Department for International Trade (DIT) officials have confirmed that they will explore ways in which this could be clarified in future.
Approximation
28.The EU-Israel Agreement is an Association Agreement and, as such, includes provisions on the approximation of Israel’s laws to EU law. The Government, in its parliamentary report, reasons that replicating this “would create an inappropriate commitment in a UK specific bilateral context”.25 Similar provisions on approximation have also been removed from the EU-Israel Protocol on Conformity Assessment that has been incorporated into the Agreement.
Tariff rate quotas
29.While tariff levels will remain the same as in the precursor Agreement, tariff rate quotas (TRQs) have been resized to reflect UK-Israel trade flows. The Government took three years of customs data by importers as the basis for resizing the TRQs. Where these data were not available, data on trade flows were used. For those areas without data, and in order to maintain future market access opportunities, both sides agreed to provide a proxy measure. .
Entry price system
30.The EU-Israel Agreement contains an Entry Price System (EPS), which applies to 15 types of fruit and vegetables. It ensures that during the European growing seasons, an additional duty is charged if incoming fruits and vegetables are below a pre-determined entry price. Annex 2 of the UK-Israel Agreement does not establish such an EPS, but the UK reserves the right to establish and implement one in the future. The UK would need to notify Israel in advance of its intent to apply an EPS. It would only apply to the 15 types of fruits and vegetables to which the EU EPS applies, and it would replicate the EU’s price and additional duty levels.
Cumulation
31.As with previous agreements considered by the Committee, the UK-Israel Agreement will allow for EU material26 to be recognised (in technical terms, ‘cumulated’) as originating content in exports to one another. EU processing can, under certain conditions, also be recognised in UK exports to Israel.
32.However, both Israel and the EU are parties to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin (PEM Convention), adding a layer of complexity that is not fully reflected in the parliamentary report. Materials from EFTA states (Switzerland, Norway, Iceland and Liechtenstein), Turkey and other countries participating in the PEM Convention can also count as originating in the UK or Israel. In line with the PEM Convention, however, the application of these extended cumulation provisions is conditional upon the UK and Israel having concluded FTAs with those other countries.27
Territorial application
33.The UK does not recognise the Occupied Palestinian Territories as part of the State of Israel and, consequently, they are not covered by the Agreement. In the words of the EM, “Products produced in the Israeli settlements located within the territories brought under Israeli administration since June 1967 are not entitled to benefit from preferential tariff treatment
34.The Agreement applies to Great Britain and Northern Ireland, and also, in part, to the Crown Dependencies and the British Overseas Territories. While the parliamentary report and explanatory memorandum (EM) explain that the UK-Israel Agreement will apply to those territories for whose international relations the UK is responsible to the same extent as the precursor EU-Israel Association Agreement, the interpretation of this provision is not straightforward. This is because the EU-Israel Association Agreement refers back to the underlying EU treaties, which only apply selectively to the Crown Dependencies and the British Overseas Territories.
35.As we stated in our report Scrutiny of international agreements: Treaties considered on 26 February 2019, “it would be helpful if, in future, the explanatory material accompanying trade agreements included a list of those territories to which the agreements will apply”.28 DIT officials have indicated their readiness to consider options for making the territorial application section in the explanatory materials clearer in future.
Entry into force and provisional application
36.For the Agreement to enter into force, it must first be ratified by both the UK and Israel. It can then either come into force at the end of the transition period under the Withdrawal Agreement or, if no agreement is reached, upon the UK’s exit from the EU. The Agreement also allows for provisional application. This is to ensure continuity should the UK cease to be a party to EU agreements before ratification processes can be completed. We note that, in the UK, ratification is subject to the parliamentary scrutiny process under the Constitutional Reform and Governance Act 2010 having been completed. The scrutiny period for this Agreement concludes on 2 April 2019, in other words, after the UK’s possible exit from the EU.
Human Rights
37.The Government’s EM makes clear that the provisions of the EU-Israel Trade Agreements concerning human rights have been incorporated into the UK-Israel Agreement mutatis mutandis,29 without modification.
Consultation
38.The Government’s EM, while making reference to the Government’s ongoing engagement with the private sector and the devolved administrations on trade policy matters, does not explain what specific consultations have taken place on the Agreement. We reiterate the recommendation in our report Scrutiny of international agreements: Treaties considered on 12 February 2019,30 that the Government’s explanatory material should state clearly whether there has been consultation with the devolved administrations, industry or other stakeholders.
39.In this context, we note the comments of the Minister of State at the DIT, Baroness Fairhead, in responding to a debate on 13 March 2019 on three roll-over trade agreements. She said that the Government had “learned lessons” and would be “sharing the initial texts with the devolved Administrations”.31 We are grateful for the Minister’s assurance, confirmed in a follow-up letter dated 15 March, that in future the Government will share draft texts with the devolved administrations once they are stable.32
Conclusion
40.We draw special attention to the UK-Israel Trade and Partnership Agreement, on the grounds that:
- It is politically and legally important, and gives rise to issues of public policy that the House may wish to debate prior to ratification; and
- Further consultation would be appropriate, including with the devolved administrations.
1 Agreement between the United Kingdom of Great Britain and Northern Ireland and the Swiss Confederation on Citizens’ Rights following the Withdrawal of the United Kingdom from the European Union and the Free Movement of Persons Agreement, CP 64, 2019: https://www.gov.uk/government/publications/cs-switzerland-no52019-ukswitzerland-agreement-on-citizens-rights-following-withdrawal-of-uk-from-the-eu-and-free-movement-of-persons-agreement [accessed 13 March 2019]
2 The Government’s Explanatory Memorandum states that “The FMOPA entered into force on 1 June 1999”. This is an error: the FMOPA was signed in on 21 June 1999 and came into force on 1 June 2002. See https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX:22002A0430(01) [accessed 14 March 2019]
3 Decision of the Council, and of the Commission as regards the Agreement on Scientific and Technological Cooperation, of 4 April 2002 on the conclusion of seven Agreements with the Swiss Confederation; Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons, OJ L 114 (30 April 2002), pp 1, 6
4 We have previously scrutinised the Agreement between the Government of the UK and the Swiss Confederation on Direct Insurance other than Life Insurance, CP 26, 2019; the Agreement between the UK and the Swiss Federal Council on the International Carriage of Passengers and Goods by Road, CP 5, 2019; the Agreement between the UK and the Swiss Confederation relating to Scheduled Air Services, CP 25, 2019; and, the Trade Agreement between the UK and the Swiss Confederation, CP 55, 2019.
5 Explanatory Memorandum on the Agreement between the United Kingdom of Great Britain and Northern Ireland and the Swiss Confederation on citizens’ rights following the withdrawal of the United Kingdom from the European Union and the Free Movement of Persons Agreement, CP 64, 2019: https://www.gov.uk/government/publications/cs-switzerland-no52019-ukswitzerland-agreement-on-citizens-rights-following-withdrawal-of-uk-from-the-eu-and-free-movement-of-persons-agreement [accessed 13 March 2019]
6 Department for Exiting the European Union ‘Swiss Citizens’ Rights Agreement’ (20 December 2018): https://www.gov.uk/government/news/swiss-citizens-rights-agreement [accessed 13 March 2019]
7 UK- Swiss Confederation agreement on Citizens’ Rights, CP 64, Article 4a
8 Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (11 March 2019), Article 5: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/785114/11_March_WA_-_WEB_VERSION.PDF [accessed 13 March 2019]
9 Ibid., Article 6
10 This reflects Article 19 of the FMOPA which provides that the Joint Committee will settle disputes between the parties.
11 Although they would not be able to avail themselves of the proposed preliminary references to the Court of Justice of the European Union, unlike EU citizens (assuming a Withdrawal Agreement with the European Union is agreed).
12 Agreement between the United Kingdom of Great Britain and Northern Ireland and the Swiss Confederation on Citizens’ Rights following the Withdrawal of the United Kingdom from the European Union and the Free Movement of Persons Agreement, CP 64, 2019, Article 17: https://www.gov.uk/government/publications/cs-switzerland-no52019-ukswitzerland-agreement-on-citizens-rights-following-withdrawal-of-uk-from-the-eu-and-free-movement-of-persons-agreement [accessed 13 March 2019]
13 UK Borders Act 2007, section 32
14 Immigration Act 1971, section 2A
15 Letter from Rt Hon Stephen Barclay MP to Lord Boswell of Aynho, 7 March 2019: https://www.parliament.uk/documents/lords-committees/eu-select/scrutiny-brexit-related-treaties/international-agreements-letter-8.3.19.pdf [accessed 13 March 2019]
16 European Union Committee, Scrutiny of international agreements: Treaties considered on 12 March 2019 (33rd Report, Session 2017–19, HL Paper 315)
17 Persons would have the right to continue to provide services for a period of not exceeding 90 days’ work in a calendar year, provided that they had a written service contract which commenced prior to the specified date.
18 Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications, OJ L 255/22 (30 September 2005) and Council Directive 77/249/EEC of 22 March 1977 to facilitate the effective exercise by lawyers of freedom to provide services, OJ L 078 (26 March 1977) pp 17-18
19 Trade and Partnership Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the State of Israel, CP 59, 2019: https://www.gov.uk/government/publications/cs-israel-no12019-ukisrael-trade-and-partnership-agreement [accessed 14 March 2019]
20 The Latin term mutatis mutandis is used when comparing two or more things to say that, although changes will be necessary in order to take account of different situations, the basic point remains the same. For more detail, see our report Scrutiny of international agreements: Treaties considered on 26 February 2019 (31st Report, Session 2017–19, HL Paper 300)
21 Decision of the Council and the Commission of 19 April 2000 on the conclusion of a Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part and the State of Israel, of the other part, OJ L 147 (21 June 2000), pp 1, 3
22 Council Decision (EC) of 24 February 1997 concerning the conclusion of two Agreements between the European Community and the State of Israel on, respectively, procurement by telecommunications operators and government procurement; OJ L 202 (30 July 1997), p 72
23 Council Decision (EU) of 20 November 2012 on the conclusion of a Protocol to the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the State of Israel, of the other part, on Conformity Assessment and Acceptance of Industrial Products (CAA),OJ L 1 (4 January 2013), p 1
24 European Union Committee, Scrutiny of international agreements: Treaties considered on 26 February 2019 (31st Report, Session 2017–19, HL Paper 300)
25 Department for International Trade, Continuing the United Kingdom’s trade relationship with Israel, February 2019, para 64: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/781446/continuing-the-uks-trade-relationship-with-israel.pdf [accessed 14 March 2019]
26 We note that Article 37 of Protocol 4 to the Agreement excludes Ceuta and Melilla, therefore products originating in Ceuta and Melilla will not be considered products originating in the EU for the purpose of the Protocol.
27 Cumulation is complex, but our understanding is that the FTAs required for cumulation arrangements with Parties to the PEM Convention will depend on the export destination of the product.
28 European Union Committee, Scrutiny of international agreements: Treaties considered on 26 February 2019 (31st Report, Session 2017–19, HL Paper 300)
29 See above, footnote 20
30 European Union Committee, Scrutiny of international agreements: Treaties considered on 12 February 2019 (29th Report, Session 2017–19, HL Paper 287)
32 Letter from Baroness Fairhead, Minister of State for Trade and Export Promotion, Department for International Trade, 18 March 2019: https://www.parliament.uk/documents/lords-committees/eu-select/scrutiny-brexit-related-treaties/baroness-fairhead-letter-190319.pdf [accessed 19 March 2019]