European Union (Withdrawal Agreement) Bill: interim report Contents

Chapter 2: Implementation (Parts 1 & 2)

Territorial extent

13.The Bill extends to the whole of the United Kingdom.12 Various provisions including clause 1, relating to repeal of the ECA, also extend to the Isle of Man, the Channel Islands and Gibraltar.13

Part 1: Implementation period

14.The Bill provides a legal scheme for the continued operation of existing EU law during the “implementation period”. The Withdrawal Agreement calls this the “transition period”,14 but in this report we use “implementation period”, as that is the term in the Bill. This will last until 31 December 2020.15 The Withdrawal Agreement provides that European Union law “shall be applicable to and in the United Kingdom during the transition period”.16 During that period, Union law shall have “the same legal effects” in the United Kingdom as it produces within the European Union and its Member States, “and shall be interpreted and applied in accordance with the same methods and general principles as those applicable within the Union.”17

15.The provisions in this part of the Bill must be read alongside the European Union (Withdrawal) Act 2018. Section 1 of the 2018 Act remains in place. This means that on “exit day”, the ECA will be repealed. However, in order to comply with Article 127, the Bill “saves” the terms of the ECA for the implementation period.

16.The Bill amends the 2018 Act in relation to retained EU law. The provisions for converting EU law into retained EU law (sections 2–4) and relating to the primacy of retained EU law (sections 5–7) in domestic law will now take effect at the end of the implementation period.18

17.Clause 1 inserts a new section 1A into the 2018 Act to save the effects of the ECA for the implementation period. New section 1A(2) provides that the ECA will continue to have effect despite its repeal by the Bill. This is done by inserting Part 4 of the Withdrawal Agreement (other than as it relates to the Common Foreign and Security Policy) into the definition of EU law and “the Treaties” in the ECA.19

18.Although the UK will have left the EU, and the ECA will be repealed, the ECA framework will continue to apply until the end of 2020 to ensure the effective primacy of EU law during this period. This means that during the implementation period EU rules will apply in the United Kingdom as at present, including the operation of directly applicable EU law made before the end of 2020. This rule also applies to any international agreement concluded by the EU and entering into force during the implementation period. To reinforce the continuity principle, new section 1A(3)(e) provides that EU rules on customs duties and the Common Agricultural Policy (CAP) continue to apply as they do at present. This is made explicit “to avoid any suggestion that the Bill merely preserves CAP arrangements and customs duties etc. as they had effect at the moment of withdrawal.”20

19.New section 1A(3)(d) modifies section 3(1) of the ECA to bring the Withdrawal Agreement within the purview of the rules of interpretation and the primacy of Court of Justice (CJEU) decisions on matters of EU law. The Government explains that this will “ensure that EU rules are interpreted and applied consistently in both the UK and the EU for the duration of the implementation period,”21 and “[d]uring the implementation period, the UK will maintain the same recourse to the EU’s judicial review structures as a Member State.”22 To this end, the Bill amends section 6 of the 2018 Act so that its provisions which end the jurisdiction of the CJEU will take effect only at the end of the implementation period.23

20.Although the UK’s obligations in relation to EU law will apply through the Withdrawal Agreement rather than as a Member State, the effect on citizens will be the same. One consequence of the “same legal effects” provision is that “legal or natural persons will be able to rely directly on some of the provisions of the Withdrawal Agreement before the UK courts.”24

21.Under the Agreement, the United Kingdom is permitted during the transition period “to negotiate, sign and ratify international agreements entered into in its own capacity in the areas of exclusive competence of the Union” but these agreements may not “enter into force or apply during the transition period, unless so authorised by the Union”.25

22.Since new section 1A(3) (in clause 1) in effect inserts Part 4 of the Withdrawal Agreement into the definition of “the Treaties” in the ECA, the duty of officials and courts to give effect to EU law, and how they interpret EU law, will seem unchanged. The ECA will continue to be their point of reference, and the interpretive rules that have built up since the 1970s will presumably continue to apply.

23.The continued effect of ECA primacy also applies to devolved institutions and devolved legislation, each of which is subject to EU law primacy under current arrangements. The restrictions on devolved competence which currently refer to the ECA will be preserved for the duration of the implementation period.

24.Clause 2 inserts a new section 1B into the 2018 Act. This saves “EU-derived domestic legislation” for the duration of the implementation period. “EU-derived domestic legislation” is UK law that has been made to give effect to EU law.

25.This provision is necessary due to the modification and effective suspension of the retained EU law provisions in the 2018 Act (clauses 25–27, discussed below). In effect, clause 2 seeks to replicate section 2 of 2018 Act, and the definition of “EU-derived domestic legislation” in new section 1B (7) mirrors that in section 2 of the 2018 Act.

26.There is no need to make equivalent provision for “direct EU legislation”26 or “rights, powers, liabilities, obligations, restrictions, remedies and procedures” under section 2(1) of the ECA27 because each of these categories is specifically saved by clause 1 of the Bill through which, in effect, the ECA continues to operate.

27.New section 1B(3) contains a number of “glosses” to make sure that EU-derived domestic legislation is to be interpreted in light of any changes in EU law or modifications of its terms that have occurred since the ECA came into force.28 New section 1B(4) provides that any new EU-derived domestic legislation that is made or passed during the implementation period is to be read in light of the “glosses” in new section 1B(3).

28.The effect of Part 1 is that, in essence, the relationship between domestic law and EU law will remain the same until 31 December 2020 or until the end of any extension of the implementation period as provided for in the Agreement.

Delegated powers in Part 1

29.The Bill contains a range of delegated powers to give effect to the Withdrawal Agreement. In this report we explain the operation of these powers, but we leave it to the Delegated Powers and Regulatory Reform Committee to assess their appropriateness and the scrutiny processes to which they will be subject, including the proposed sifting system in clause 29. The main delegated powers are as follows.

30.Clause 4 inserts a new Part 1A, “supplementary power in connection with implementation period”, into schedule 2 to the 2018 Act. This is the schedule which gives powers to devolved authorities in relation to the section 8 powers of UK ministers. The purpose of new Part 1A is to reflect the changes made to the 2018 Act by clause 3. It provides for the making of regulations by devolved authorities, defines devolved competence in a similar way to other provisions in schedule 2 and provides for the making of regulations jointly by a UK minister and a devolved authority.

31.The amendment to schedule 2 provides: “No provision may be made by a devolved authority acting alone in regulations under this Part unless the provision is within the devolved competence of the devolved authority.”34 Any other regulation must be made jointly with UK ministers.35

32.These broad powers are intended to serve the same purpose as the Bill itself, which is to give effect to the Withdrawal Agreement and the two related international agreements. Under Part 1 of the Bill, these powers are constrained by the terms of these Agreements in a similar way to that in which section 2 powers under the ECA are constrained by the terms of EU law. However, they are more narrow and specifically circumscribed than the ECA section 2 powers. If these powers are used to make statutory instruments which are considered to be contrary to the terms of the Agreement they would be open to legal challenge.

Part 2: Remaining implementation of Withdrawal Agreement etc.

33.Clause 5 is a general provision designed to give effect to Article 4 of the Withdrawal Agreement relating to its implementation. It inserts a new section 7A into the 2018 Act (section 7 of the 2018 Act is concerned with the status of retained EU law).

34.Article 4(1) of the Withdrawal Agreement states:

“The provisions of this Agreement and the provisions of Union law made applicable by this Agreement shall produce in respect of and in the United Kingdom the same legal effects as those which they produce within the Union and its Member States.

Accordingly, legal or natural persons shall in particular be able to rely directly on the provisions contained or referred to in this Agreement which meet the conditions for direct effect under Union law.”

35.Clause 5 does not apply to Part 4 of Article 4, which is provided for in clauses 1–4. Clause 5 is a safety provision to ensure that the rules in the Agreement concerning the direct applicability of the Agreement in UK law,36 the requirement that the Agreement be interpreted in line with EU law,37 and to ensure the legal supremacy of the Agreement, apply in relation to all aspects of the Agreement through, if necessary, the disapplication of “inconsistent or incompatible domestic provisions”.38 There is also a provision that will remain effective after the end of the implementation period:

“the United Kingdom’s judicial and administrative authorities shall have due regard to relevant case law of the Court of Justice of the European Union handed down after the end of the transition period.”39

36.New section 7A(1) gives effect to this in a formula similar to section 2 of the ECA. All rights etc. under the Withdrawal Agreement “are without further enactment to be given legal effect or used in the United Kingdom.” Under subsection (2) these rights etc. are to be recognised and enforced in domestic law40 and “[e]very enactment (including an enactment contained in this Act) is to be read and has effect subject to subsection (2)”.41

37.Clause 5 offers different interpretive instructions from section 6 of the 2018 Act in relation to retained EU law. This is because it is concerned with the Agreement which is transitional in nature and works on the assumption that section 6 of the 2018 Act will apply in relation to retained EU law at the end of the implementation period.

38.Clause 6 concerns the general implementation of the EEA EFTA and Swiss agreements. It mirrors clause 5 in attempting to ensure a uniform approach to implementation of the three Agreements. It does so by inserting a new section 7B into the 2018 Act.

39.New section 7B(3) provides that in the event of any conflict between the EEA EFTA Agreement and the Swiss Citizens’ Rights Agreement and the Withdrawal Agreement, the latter is to take precedence.

40.These clauses reiterate the general thrust of Part 1 of the Act, which is the continuity in practice of the existing relationship between domestic law and EU law for the duration of the implementation period.

41.Not all of the Bill’s provisions are time-limited; in a number of areas, such as citizens’ rights, its effect will continue after 2020. Those areas covered by time-limited provisions may need to be legislated for subsequently, further to the outcome of negotiations with the EU on the future relationship.

12 European Union (Withdrawal Agreement) Bill [Bill 7 (2019)], clause 40

13 European Union (Withdrawal Agreement) Bill, clause 40(3)

14 The Preamble and Article 126 include the phrase “transition or implementation period”, otherwise “transition period” is used throughout the rest of the Withdrawal Agreement.

15 HM Government, New Withdrawal Agreement and Political Declaration, 19 October 2019, Article 126. There is the possibility of a single extension for up to one or two years if adopted by the Joint Committee before 1 July 2020. See Article 132 and clause 37 of the Bill.

16 HM Government, New Withdrawal Agreement and Political Declaration, 19 October 2019, Article 127

17 Ibid., Article 4 and Article 127(3)

18 European Union (Withdrawal Agreement) Bill, clauses 25–27

19 European Union (Withdrawal Agreement) Bill, clause 1, inserted section 1A(3)

21 Ibid., para 26

22 Ibid., para 27

23 European Union (Withdrawal Agreement) Bill, clause 26(1)

25 HM Government, New Withdrawal Agreement and Political Declaration, 19 October 2019, Article 129(4)

26 European Union (Withdrawal) Act 2018, section 3

27 European Union (Withdrawal) Act 2018, section 4

28 “Glosses” are defined in the explanatory notes to the Bill as: “Specific modifications to make clear the way that EU law terms should be read on the UK statute book, so that our laws continue to work during the implementation period. For example, the glosses will ensure that across the UK statute book, references to ‘EU citizens’, will be read as including UK nationals for the duration of the implementation period.”

29 “Subsections (2) to (4) are subject to any regulations made under section 8A or 23 or Part 1A of Schedule 2 or otherwise under this Act or under the European Union (Withdrawal Agreement) Act 2019.” European Union (Withdrawal Agreement) Bill, clause 2, inserted section 1B(5)

30 European Union (Withdrawal Agreement) Bill, clause 3, inserted section 8A(1)(d)

31 Ibid., clause 3, inserted section 8A(1)(e)

32 Ibid., clause 3, inserted section 8A(3)

33 Ibid., clause 3, inserted section 8A(4)

34 Ibid., clause 4, inserted para 11B(1)

35 Ibid., clause 4, inserted para 11B(2)

36 HM Government, New Withdrawal Agreement and Political Declaration, 19 October 2019, Article 4(1)

37 Ibid., Article 4(3) and 4(4)

38 Ibid., Article 4(2)

39 Ibid., Article 4(5)

40 European Union (Withdrawal Agreement) Bill, clause 5, inserted section 7A(2)

41 Clause 37 states that an enactment means “an enactment whenever passed or made”.

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