Arthur Cox is continuing to closely monitor Brexit developments, and we are continuing to advise our clients in Ireland, the UK and further afield on the potential legal implications for their businesses. We are also mindful of the implications of Brexit for Northern Ireland and free movement of goods and people across the border. Together with our colleagues in our Belfast office, we have an all-island perspective on these issues.
Following months of negotiations between the EU’s negotiating team and the UK Government, the European Commission recommended, on 8 December 2017, that the European Council conclude that “sufficient progress” had been made on the first phase of the Brexit negotiations to allow the negotiations to move to the second phase. This recommendation followed agreement being reached between the UK Government and the EU’s negotiating team on a Joint Report on the same date.
Three issues had been identified as priorities for the first phase of negotiations: the border between Ireland and Northern Ireland, citizens’ rights, and the financial settlement, and the Joint Report sets out various commitments and common understandings from both sides.
Regarding the border between Ireland and Northern Ireland, the UK has reiterated its commitment to avoiding a hard border. It has signalled its full support for Northern Ireland’s position as a part of the UK, and its respect for Ireland’s position as an ongoing member of the EU. Both the UK and the EU, in the Joint Report, recognise that the Common Travel Area arrangement between Ireland and Northern Ireland can continue, while the UK has also committed to ensuring that no new regulatory barriers will be put in place between Northern Ireland and the rest of the UK.
Regarding citizens’ rights, the EU and the UK reached a common understanding that EU citizens legally living in the UK, and UK citizens legally living in an EU 27 Member State, in each case on the date that Brexit takes place, will have the same rights post-withdrawal as they had pre-withdrawal.
Regarding the financial settlement, the EU and the UK have agreed on a methodology for calculating that settlement, with the UK continuing to be involved in the 2019 and 2020 EU annual budgets. That methodology is based on three key principles: no Member State should pay more or receive less due to Brexit, the UK should discharge its portion of commitments assumed during its membership of the EU, and the UK should neither pay more, nor earlier, than if Brexit had not occurred.
If the European Council agrees with the Commission that sufficient progress has been made, it will then begin to draft the Withdrawal Agreement based on both the principles set out in the Joint Report, and other Brexit issues that are the subject of ongoing negotiation. Those issues include the UK’s withdrawal from Euratom, the continuing availability of goods, cooperation in civil and commercial matters, police and judicial cooperation in criminal matters, ongoing EU judicial procedures, ongoing EU administrative procedures, the functioning of EU institutions. The recommendation from the European Commission notes that discussions have not yet started in certain areas, notably intellectual property rights, public procurement, customs-related matters, and data protection. Once any Withdrawal Agreement is agreed by the European Council and consented to by the European Parliament, it will also need to be approved by the UK Parliament.
As part of the move to the second phase of the Brexit negotiations, discussions will begin on the shape of the future relationship between the EU and the UK. As emphasised by the Deputy Governor of the Central Bank of Ireland in a speech on 12 December 2017, the remaining negotiations will be complex and significant, with Brexit continuing to pose considerable risks to the Irish economy.
We will issue updates and relevant briefings as developments occur.
In the meantime, if you have any questions on Brexit, please get in touch with your usual Arthur Cox contact or any member of our Brexit team.
Our previous Brexit briefings provide further background on Brexit-related developments:
- Brexit: Central Bank FAQ
- Brexit Guidance for the Pharmaceutical Industry
- Brexit: ESMA publishes sector-specific opinions on relocations
- Brexit: ESMA highlights importance of supervisory convergence
- Brexit Update May 2017
- Brexit: The Great Repeal Bill
- 50 triggered: Brexit negotiations can begin
- January 2017 Briefing on the Supreme Court decision on Article 50
- November 2016 Brexit Update
- November 2016 Briefing on the High Court ruling on Article 50