Scrutiny of international agreements; treaties considered on 3 March 2020 Contents

Scrutiny of international agreements: treaties considered on 3 March 2020

Chapter 1: Agreement drawn to the Special Attention of the House

Agreement on arrangements between Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the United Kingdom following the withdrawal of the United Kingdom from the European Union, the EEA agreement and other agreements applicable between the UK and the EEA-EFTA States by virtue of the UK’s membership of the European Union (CP 217, 2019)1

1.The Agreement on arrangements between Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the United Kingdom following the withdrawal of the United Kingdom from the European Union, the EEA agreement and other agreements applicable between the UK and the EEA-EFTA States by virtue of the UK’s membership of the European Union (the ‘EEA-EFTA Separation Agreement’) was laid on 29 January 2020, and the scrutiny period is scheduled to end on 12 March 2020. It was considered by the European Union Select Committee on 3 March 2020.

2.The UK participates in a series of international agreements resulting from its membership of the EU, which underpinned its relationship with the EEA-EFTA States (Iceland, the Principality of Liechtenstein and the Kingdom of Norway).

3.The EEA-EFTA Separation Agreement differs from many of the other Brexit related treaties we have scrutinised, in that it does not ‘roll over’ a prior EU international agreement. Instead, it makes provision for certain arrangements between the UK and the EEA-EFTA States, resulting from the UK’s exit from the European Union, in order to, among other things, protect citizens’ rights; ensure coordination of social security systems; and wind down certain existing processes ahead of the end of the transition period.

4.We first received a draft of the EEA-EFTA Separation Agreement from the then Secretary of State for Exiting the EU, Rt Hon Stephen Barclay MP, in December 2018. Alongside the draft Agreement, the Government also published an ‘Explainer’ document, which was intended to help in understanding the legal drafting.2

5.On 28 January 2020, Mr Barclay wrote to us to indicate that the Agreement had been signed. He noted that the EEA-EFTA Agreement “largely mirrors the terms of the EU Withdrawal Agreement”. However, he acknowledged that since the publication of the draft agreement in December 2018, the UK and EEA-EFTA States had made “a limited number of changes to the text, removing some unnecessary wording … [and] making minor corrections”. The letter stated that “the substantive obligations of the parties have not changed”3.

Entry into force

6.The letter from the Secretary of State stated that the EEA-EFTA Separation Agreement would be provisionally applied from exit day (31 January 2020) and that it would be ratified and enter into force during the transition period.

7.Following inquiries by Committee staff about the delay between the conclusion and signature of the Agreement, and the reason for its provisional application, officials at the Foreign and Commonwealth Office (FCO) explained that the Agreement is only operable in a scenario where the EU Withdrawal Agreement has been brought into force and, as such, “signature of this agreement was contingent on signature of the EU WA”.

8.FCO officials also confirmed that the Agreement has been provisionally applied bilaterally between the UK and Iceland and Liechtenstein, on the basis of an exchange of legally binding notes verbales (effective from exit day). Norway was unable to agree to provisional application of the Agreement for domestic constitutional reasons.

9.Officials noted that “the vast majority of treaty obligations do not take effect until the end of the transition period”, and added that the UK and Norway “have agreed that they will give effect to those articles in the agreement that do apply, in the same way as they will for the other EEA-EFTA States who are able to provisionally apply until the Agreement enters into force”. This arrangement with Norway is a political (rather than a legal) commitment and has been “enshrined via a non-binding exchange of notes verbales”.

10.The European Union (Withdrawal Agreement) Act 2020 implements the EEA-EFTA Separation Agreement in UK law and confers relevant delegated powers upon ministers. FCO officials advised that the Immigration (Citizens’ Rights Appeals) (EU Exit) Regulations 2020,4 made on 27 January, were laid under the 2020 Act, and that “this was the only secondary legislation required on implementation”.

Changes to the agreement post-publication

11.FCO officials provided further details of the technical changes made to the Agreement after it was first published in December 2018. They indicated that:

Territorial application and consultation

12.The EM accompanying the Separation Agreement notes that it will apply “to those territories to which the EEA agreement and the other international agreements through which the EEA-EFTA States cooperate with the EU applied”. Accordingly, the provisions on citizens’ rights, together with the provisions on intellectual property, public procurement, ongoing police and judicial cooperation, data and judicial procedures are extended to Gibraltar. The provisions covering goods on the market apply to the Crown Dependencies. The EM notes that the Agreement does not extend to any other Overseas Territory or the Sovereign Base Area.

13.The EM acknowledges that the policy content of the Separation Agreement “includes a mixture of devolved and reserved policy areas” and indicates that the UK Government “engaged the devolved administrations on this Agreement and shared the draft text in advance of it being agreed”.

14.FCO officials subsequently confirmed that “no issues have arisen in respect of this agreement’s application to the Crown Dependencies”, and that while the Cabinet Office and Ministry of Justice were continuing regular engagement with the Crown Dependencies, they did not anticipate any “relevant matters” emerging.

Citizens’ rights

15.The bulk of the provisions in the Separation Agreement relate to citizens’ rights, the coordination of social security systems, and associated matters.6 The Secretary of State’s letter indicated that the Agreement largely reflected the terms of the EU Withdrawal Agreement.7 These were explored in our report Brexit: the revised Withdrawal Agreement and Political Declaration,8 and this material is not rehearsed in detail in this report.

16.In short, the EEA-EFTA nationals who remain in the UK after Brexit will need to apply for settled status by June 2021 and are able to apply under the settlement scheme in the same way as EU citizens. The rights of UK nationals in EEA-EFTA States will also be protected, provided that they are lawfully residing in an EEA-EFTA State at the end of the transition period.

17.In correspondence, FCO officials highlighted a number of differences between the EU Withdrawal Agreement and the EEA-EFTA Withdrawal agreement. They described these as “technical and minor”, stating that they reflected where the EEA Agreement does not incorporate relevant parts of EU law.

18.Notably, the EEA ETFA Separation Agreement does not include a provision comparable to Article 4(1) of the Withdrawal Agreement (which provides for the ‘direct effect’ of the Withdrawal Agreement in domestic law). However, FCO officials note that section 6 of the EU (Withdrawal Agreement) Act 2020 implements the EEA-EFTA Agreement “in line with” Article 4(1).

19.Other variations which were acknowledged by the FCO include the fact that, unlike the UK-EU Withdrawal Agreement, the EEA-EFTA Separation Agreement does not directly require courts to have “due regard” to CJEU caselaw handed down after the transition period,9 although courts would be required to interpret the EEA-EFTA Agreement “in a manner which is consistent with the Withdrawal Agreement”.

20.The citizens’ rights part of the Separation Agreement would be monitored in the UK by the same Independent Monitoring Authority (IMA), established under section 15 of the EU (Withdrawal Agreement) Act 2020, pursuant to Article 159 of the UK-EU Withdrawal Agreement. .In the EEA-EFTA States, this monitoring function would be provided by the EFTA Surveillance Authority.10 As with the EU Withdrawal Agreement, these surveillance mechanisms could be ended by the parties “no earlier than 8 years after the end of the transition period”.11Any such decision would have to be made by the Joint Committee which is responsible for the application of the Agreement. The Joint Committee will adopt all its decisions and make recommendations by consensus.

21.Unlike the UK-EU Withdrawal Agreement, there is no provision for references to the CJEU in respect of the citizens’ rights provisions12 and disputes between the parties would be resolved through the Joint Committee structure without the option for arbitration. The consequence is that any challenges to the implementation of the citizens’ rights provisions under the Separation Agreement are likely to have to take place in the domestic courts of the signatory States (or in the European Court of Human Rights if they engage rights under the European Convention on Human Rights).

22.The IMA will be able to bring legal actions in the UK courts, with a view to seeking an adequate remedy, if it deems that the citizens’ rights part of the Agreement is not being implemented or applied correctly.

Separation provisions

23.Part Three of the Agreement is entitled ‘Separation provisions’ and covers arrangements for goods placed on the market; intellectual property; police and justice co-operation in criminal matters; data and information processed or obtained before the end of the transition period, or on the basis of the UK EEA-EFTA Separation Agreement; public procurement; and judicial procedures. These largely mirror the arrangements made under the UK-EU Withdrawal Agreement.

24.The Government’s ‘Explainer’ gives some further details about these provisions, noting that they provide the technical basis for the winding down of ongoing processes under the EEA Agreement to secure an “orderly withdrawal”.

Intellectual property

25.Article 46 of the Agreement makes provision for certain intellectual property rights. Notably, the EM accompanying the Agreement indicated that in respect of Geographical Indications (GIs), “existing EEA-EFTA GIs will remain protected in the UK until a future agreement comes into effect and supersedes those arrangements. Existing UK GIs will continue to be protected by the current EU regime”.

26.We sought clarification as to the effect of Article 46, since it appeared to provide that certain GIs might cease to be protected in the EEA-EFTA States at the end of the transition period.13 In response, FCO officials stated:

“The provisions on protection ceasing only apply in circumstances where a GI ceases to have protection in the EEA EFTA States (in line with the legislative provision of the relevant State e.g. because it has fallen out of use), to ensure that the UK is not protecting GIs that are not protected in the EEA-EFTA States. There are no EEA-EFTA GIs that we anticipate this applying to.”

Governance and amendment

27.The Joint Committee, already mentioned, will be responsible for the implementation and application of the Separation Agreement.14 It will operate by consensus and have powers to adopt its own rules of procedure; establish specialised committees; make amendments to the Agreement (subject to the restrictions set out at Article 65(5)(d)); adopt decisions and recommendations and supervise and facilitate the application of the Agreement.

28.The Joint Committee will be chaired on a rotating basis by one of the Parties and will meet at the request of the parties, at least once a year, after the end of the transition period.15

29.We asked FCO officials to outline the circumstances in which amendments to the Agreement under Article 65 would be subject to scrutiny by Parliament under the Constitutional Reform and Governance Act 2010 (CRAG). In response, we received the somewhat formulaic response that the CRAG process would be applicable to amendments to the Agreement which are subject to ratification, as defined by the 2010 Act.

30.This leaves Parliament in an invidious position. First, it is not absolutely clear which amendments would need to be subject to ratification. More importantly, it is even less clear which amendments can be made that do not require ratification. Such amendments may never even be notified to Parliament.

31.We have highlighted this limitation on the current scrutiny process several times. We again urge the Government to be more transparent about amendments to international agreements, and to put in place a system whereby Parliament is notified of every significant amendment to an Agreement that it has scrutinised.

32.A second issue is that, unlike the UK-EU Withdrawal Agreement, there is no provision for arbitration in the UK EEA-EFTA Withdrawal Agreement. This may lead to difficulty if there are any contentious disputes in the Joint Committee, given that it can only take decisions by consensus.

33.Committee staff asked the FCO why there was no provision for arbitration, and whether that had been at the request of the UK. The response was that “due to the different content and contexts of these agreements, there are some differences in the way that disputes can be resolved; for example the EEA-EFTA separation agreement will not involve a role for the CJEU, and there is no provision for arbitration.” This simply does not answer the question posed, and it remains unclear why the Separation Agreement makes no provision for independent dispute resolution and whether this constitutes a serious defect.

Conclusion

34.We report the UK-EEA-EFTA Withdrawal Agreement for the special attention of the House, on the grounds that:


1. Agreement on arrangements between Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the United Kingdom following the withdrawal of the United Kingdom from the European Union, the EEA agreement and other agreements applicable between the UK and the EEA EFTA States by virtue of the UK’s membership of the European Union, CP 217, 2019: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/861908/MS_1.2020_Agreement_on_arrangements_between_Iceland__Liechtenstein__Norway_and_UK_following_withdrawal_of_UK_from_EU__EEA_agreement_and_other_agreements_applicable_UK_and_EEA_EFTA_States.pdf [accessed 24 February 2020]

2 HM Government, Explainer for the agreement on arrangement between Iceland, the Principality of Liechtenstein and the Kingdom of Norway, and the United Kingdom of Great Britain and Northern Ireland, following the withdrawal of the United Kingdom from the European Union (20 December 2018): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/766998/Explainer_-_UK-EEA_EFTA_Separation_Agreement.pdf [accessed 24 February 2020]

3 Letter dated 28 January 2020 from Rt Hon Steve Barclay MP, Secretary of State for Exiting the European Union , to Lord Kinnoull, Chair of the European Union Committee: https://committees.parliament.uk/download/file/?url=%2Fpublications%2F67%2Fdocuments%2F715&slug=eeaeftaletterbarclaypdf [accessed 27 February 2020]

4 The Immigration (Citizens’ Rights Appeals) (EU Exit) Regulations 2020 (SI 2020/61)

5 The Article which defines the Agreement.

6 The Agreement also protects the rights of those citizens who reside in one state and work in another, often referred to as ‘frontier workers’ and makes provision for the mutual recognition of professional qualifications where they were obtained (or the professional concerned applied for a recognition decision) before the end of the implementation period.

7 Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, presented to Parliament pursuant to Section 1 of the European Union (Withdrawal) Act (No. 2) 2019 and Section 13 of the European Union (Withdrawal) Act 2018 (19 October 2019): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/840655/Agreement_on_the_withdrawal_of_the_United_Kingdom_of_Great_Britain_and_Northern_Ireland_from_the_European_Union_and_the_European_Atomic_Energy_Community.pdf [accessed 24 February 2020]

8 European Union Committee, Brexit: the revised Withdrawal Agreement and Political Declaration (1st Report, Session 2019–21, HL Paper 4)

9 Article 4(5) of the Agreement on the Withdrawal of the UK from the European Union and European Atomic Energy Community, 19 October 2019.

11 Ibid.

12 The EEA-EFTA States have a separate EFTA Court. However,.it is not referenced in this part of the Agreement.

13 The relevant provision states “Where a geographical indication referred to in the first paragraph [namely a GI within the meaning of Regulation (EC) No 110/2008, pertaining to a product of an EEA EFTA State] ceases to be protected in the EEA EFTA States after the end of the transition period, the first paragraph shall cease to apply in respect of that geographical indication.




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