The Withdrawal Agreement: An Exchange of Letters

Jane Lambert

By a letter dated 14 Jan 2019, the Prime Minister asked the Presidents of the European Council and the Commission for certain assurances on the intended operation of the Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community of 14 Nov 2018.  Those Presidents, Donald Tusk and Jean-Clause Juncker, have replied to the Prime Ministers by a letter of even date.

In her letter, Prime Minister opined that

"The strong future partnership between the United Kingdom and the European Union described in our joint Political Declaration of 25 November 2018 is in the interests of all our citizens, and an important signal to the world of our intent to continue to work together for our shared prosperity and security, and also to promote and defend our common interests and values."

She acknowledged that will not and cannot be the same relationship as the UK enjoyed as a member state but it is the best that can be achieved in the circumstances.  She warned that the Withdrawal Agreement was at risk "because of concerns in the UK Parliament about how we are delivering on our commitments in relation to Northern Ireland's border with Ireland."

To alleviate those concerns the Prime Minister invited Messers Tusk and Juncker to:

• agree that exploratory talks focused on delivering a future relationship in which a backstop will not be needed can begin as soon as the Withdrawal Agreement is signed, which could, in turn, be immediately after the UK Parliament has voted in favour of the deal; 
• recognize that these talks should cover all strands of the relationship in parallel, giving particular urgency to discussion of ideas, including the use of all available facilitative arrangements and technologies, for replacing the backstop with permanent arrangements that ensure its underlying objectives continue to be met. These ideas need not replicate the provisions of the Protocol in any respect, and the UK is ready to work ambitiously and creatively with the EU on this. I would welcome your mutual commitment in this regard; 
• confirm the legal connection between the Withdrawal Agreement and the Political Declaration, and making that link clear in the way we present the documents; and 
• agree that if we are in a situation where we have negotiated a new agreement, but the backstop risks coming into force because ratification is not complete, we in the UK will do what is necessary to apply the new agreement provisionally pending ratification, rather than default to the backstop, and we expect the Commission to make the appropriate recommendations in relation to the EU too. Such provisional application is, of course, normal in trade agreements.

In their reply, the two Presidents made clear that they were "not in a position to agree to anything that changes or is inconsistent with the Withdrawal Agreement". However, in order to facilitate the next steps of the process, they were happy to confirm, on behalf of the two EU Institutions they represent, their understanding of the following points within their respective fields of responsibility.

For the Council, Mr Tusk affirmed the remaining member states' intention to expedite negotiations for an agreement that will obviate the need for a backstop and agreed that the Withdrawal Agreement and political declaration on the EU's future relationship with the EU are part of the same package. On behalf of the Commission, Mr Juncker offered to prepare for the future relationship negotiations which can begin just as soon as the UK leaves the EU.

The initial response to those letters from the Brexiteer MPs in the Conservative and Democratic Unionist Parties has been less than cordial but [erhaps that is only to be expected.   Anyone wishing to discuss this article or Brexit generally should call me on 020 7404 5252 or send me a message through my contact form.

Brexit Briefing - December 2018

Blondin crossing Niagara Falls

Author Unknown
First Publication1863
Source Wikipedia

Jane Lambert

As I have repeated many times in this blog, art 50 (3) of the Treaty on European Union provides:

"The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period."

The notification to which this paragraph refers is dated 29 March 2017.  Unless Her Majesty's government enters a "withdrawal agreement" within the meaning of art 50 (3) or revokes the notification before 23:00 on 29 March 2019 the laws that govern the United Kingdom's relationship with 27 of its closest neighbours, trading partners and allies will simply fall away. 

Although there are some who regard that prospect with equanimity there are many others who do not. As this is a legal and not a political blog, I will not enter the argument as to whether leaving the EU without a deal would be a good thing or a bad thing beyond observing that it would be expensive and inconvenient for many businesses and individuals which could have serious, adverse economic consequences for the whole country.

There are two ways of avoiding that eventuality.  One would be to enter the draft withdrawal agreement of 14 Nov 2018 that was approved by the governments of the remaining member states on 25 Nov 2018.  That is a "withdrawal agreement" within the meaning of art 50 (3) and it is probably as good an agreement as any British government could possibly get given the disparity in negotiating power between one member state and 27 others.  The other way would be to withdraw the notification which the Court of Justice of the European Union held to be possible in its judgment in Case C‑621/18, Wightman and others v Department for Exiting the European Union ECLI:EU:C:2018:999, EU:C:2018:999, [2018] 3 WLR 1965, [2018] WLR(D) 747, [2018] EUECJ C-621/18 which I discussed in my case note of 11 Dec 2018.

Both courses of action would require parliamentary approval.  The Prime Minister has already abandoned one attempt to secure such approval for the withdrawal agreement and has rescheduled another for this month.  As there is little evidence of a change of heart since her last attempt, it is possible that she may delay the attempt again in the hope that resistance to the draft withdrawal agreement will crumble the closer we come to the 29 March 2019.  The Prime Minister has already proved her skills as a tactician in the way that she routed her opponents in the parliamentary party by holding a confidence vote before they had time to organize. Whether delaying a vote on the withdrawal agreement until the last possible moment will work remains to be seen but, at present, it seems unlikely.

The revocation of the notification of 17 March 2017 is even less likely.   Ir would lead to howls of protest in sections of the press and Conservative Party.  Parliament would be accused of defying "the will of the people" though it has done precisely that in very similar circumstances as I explained in The Western Australian Secession Referendum - A Precedent for Dealing with Troublesome Referendums? 17 Dec 2018. As I added in Sometimes it is a Good Thing to ignore Referendums 19 Dec 2018, that decision turned out to be the right thing to do.  The Court of Justice made clear that any revocation of a notification under art 50 (2) would have to be in good faith.  The British government could not do it with the intention of issuing a new notification simply for internal political reasons.  It would also have to be prepared to hold elections for the European Parliament in May 2019.

The possibility of the UK's leaving without a withdrawal agreement is, to say the least, a strong possibility for which both the UK and the EU have been preparing.  I discussed those preparations in No Deal Preparations on Each Side of the Channel 20 Dec 2018.  In leaving the EU the UK will also leave the European Economic Area which will require a new relationship with the member states of the European Free Trade Association.  Agreements have been made with Iceland, Liechtenstein and Norway on a variety of issues and with Switzerland on expatriates' right which I covered in Future Relationship Agreements with the EFTA States 3 Jan 2019.  The agreement with Iceland, Liechtenstein and Norway contained provisions on geographical indications, database rights and exhaustion of rights  which I addressed in The IP Provisions of the Future Relationship Agreement with Iceland, Liechtenstein and Norway 4 Jan 2019,

Anyone wishing to discuss this article or the legal consequences of Brexit on their lives and businesses should call me on +44 (0)20 7404 5252 during office house or send me a message through my contact page,

The IP Provisions of the Future Relationship Agreement with Iceland, Liechtenstein and Norway

Stilton Cheese

Author Dominik Hundhammer

Licence Creative Commons Attribution-Share Alike 3.0 unported

Source Wikipedia

Jane Lambert

In Future Relationship Agreements with the EFTA States 3 Jan 2018 I explained that future relationship agreements were required not just with the remaining member states of the European Union but also with the member states of the European Free Trade Association ("EFTA").  All the EFTA states except Switzerland are members of the European Economic Area ("EEA") which provides for free movement of labour. As a result, significant numbers of British citizens to live in Iceland, Liechtenstein, Norway and Switzerland and many Icelandic, Liechtenstein, Norwegian and Swiss citizens have moved here.  As the current British government believes that the Brexit referendum result requires the UK to leave the EEA as well as the EU, provision has to be made for those expatriates as well as for the continuation of accrued rights of businesses and individuals that have been acquired under the EU legislation that extends to the whole of the EEA.

The governments of Iceland, Liechtenstein, Norway and the United Kingdom have addressed those issues in an Agreement on arrangements between Iceland, the Principality of Liechtenstein, 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, the EEA Agreement and other agreements applicable between the United Kingdom and the EEA EFTA States by virtue of the United Kingdom’s membership of the European Union which they announced on 20 Dec 2018.  I discussed that agreement in my article yesterday.  One of the issues covered by that Agreement is intellectual property.   The provisions on intellectual property fall within Title II of Part Three of the Agreement.  Arts 46 and 47 deal with geographical indications, art 48 continued protection of databases and art 49 exhaustion of rights. 

In Geographical Indications after Brexit 6 Oct 2018 NIPC Branding I mentioned the government's intention to set up the UK's own geographical indications scheme as announced at paragraph 39 of its white paper on The future relationship between the United Kingdom and the European Union Cm 6593 and its guidance Producing food products protected by a ‘geographical indication’ if there’s no Brexit deal which was originally published on 24 Sept 2018 and has been updated on 19 Dec 2018.  It would appear from the ponderous language of art 46 that the new British scheme will protect the geographical indications of products from the EFTA states for so long as they are protected in the EFTA states under the EU legislation that extends to those states:

"Where a geographical indication within the meaning of Regulation (EC) No 110/2008 of the European Parliament and of the Council, pertaining to a product of an EEA EFTA State, is protected on the last day of the transition period by virtue of that Regulation, those persons who are entitled to use the geographical indication concerned shall be entitled, as from the end of the transition period, without any re-examination, to use the geographical indication concerned in the United Kingdom, which shall be granted at least the same level of protection under the law of the United Kingdom as under the following provisions: 

(a)   point (i) of Article 4 (1) of Directive (EU) 2015/2436 of the European Parliament and of the Council; and 

(b)  in view of the geographical indication concerned, the first subparagraph of Article 15 (3), Article 16 and Article 23 (1) of Regulation (EC) No 110/2008 and, in so far as to the extent related to compliance with those provisions of that Regulation, Article 24 (1) of that Regulation. 

Where a geographical indication referred to in the first subparagraph ceases to be protected in the EEA EFTA States after the end of the transition period, the first subparagraph shall cease to apply in respect of that geographical indication. 

The first subparagraph shall not apply where protection in the EEA EFTA States is derived from international agreements, other than the EEA Agreement, to which the EEA EFTA States are party. 

This Article shall apply unless and until an agreement that supersedes this Article enters into force or becomes applicable."

 Art 47 (1)  of the Future Relationship Agreement requires no charge to be made for the registration, grant or protection of a geographical indication under the new British scheme.  Indeed, art 47 (2) makes clear that it will not even be necessary to make an application or undertake any particular administrative procedure to gain protection under the new scheme.  However, art 47 (3) reserves a right for the British government to charge renewal fees under its proposed new scheme and allows for the surrender of rights under such scheme.

Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases (OJ L 77, 27.3.1996, p. 20–28) required EEA member states to create a new intellectual property right known as "database right"to protect investment in obtaining, verifying and presenting the contents of a database.  One of the conditions for the subsistence of database right is that the person who takes the initiative in obtaining, verifying or presenting the contents of a database and assumes the risk of investing in that obtaining, verification or presentation ("the maker") is a national, corporation or partnership that includes a national of a European Economic Area member state. In the absence of any agreement, nationals, corporations and partnerships from the UK will lose database protection in Iceland, Liechtenstein and Norway after the UK leaves the EEA and, conversely, databases made by makers in those states will lose their database rights protection here.  Art 48 provides for the continued protection of the database rights of British makers in Iceland, Liechtenstein and Norway and for the continued protection of Icelandic, Liechtenstein and Norwegian makers here.

The doctrine of exhaustion of rights can be summarized as follows.  Once a product that is protected by an intellectual property right ("IPR") has been sold by or with the consent of the owner of that right, the IPR right is said to be exhausted, that is to say, it can no longer be exercised by the owner of the right.  A good example of that doctrine and its application to the EEA is provided by s.12 (1) of the Trade Marks Act 1994:

"A registered trade mark is not infringed by the use of the trade mark in relation to goods which have been put on the market in the European Economic Area under that trade mark by the proprietor or with his consent."

After the UK leaves the EEA this provision will no longer apply to Iceland, Liechtenstein and Norway in the absence of a specific agreement to the contrary.  Art 49 of the Future Relationship Agreement provides that IPR which were exhausted both in those states and in the UK before the end of the transition period under the provisions of the EEA Agreement shall remain exhausted both in those states and in the UK.

The Future Relationship Agreement refers in many places to a transition or implementation period which will come into being only if the UK concludes the draft withdrawal agreement with the remaining EU member states.  If the UK leaves the EU without such an agreement, the Future Relationship Agreement would require substantial last-minute modification if indeed it were to come into effect at all.  The negotiations with the EEA states have been carried out without much fuss or publicity and the Future Relationship Agreement is a lot simpler and shorter so renegotiation may be possible if all parties retain the political will to do so.

Anyone wishing to discuss this article or Brexit generally should call me on 020 7404 5252 during office hours or send me a message through my contact form. 

Future Relationship Agreements with the EFTA States

Jane Lambert

On 20 Dec 2018, the Department for Exiting the European Union announced that the government had reached agreement with the governments of the EFTA member states on the UK's relationship with those states after 29 March 2019.  As Switzerland is a full member of EFTA but not of the European Economic Area (EEA") separate agreements have been made with the EFTA states that are party to the  EEA Agreement - namely Iceland, Liechtenstein and Norway - and also with Switzerland.

EFTA
The European Free Trade Association was established on 3 May 1960 by countries that were unable or unwilling to join the European Economic Community ("EEC"). Its founding members were Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdon. Iceland joined them in 1970. Denmark and the United Kingdom left EFTA to join the EEC in 1973. They were followed by Portugal in 1986 and Austria, and Sweden in 1995. Iceland and Liechtenstein joined EFTA after the UK left. The current members are Iceland, Liechtenstein, Norway and Switzerland. They have a combined land area of 204,500 square miles which is slightly smaller than France and a population of just over 14 million which is about the same as the Istanbul metropolitan area.

The EEA
The EEA consists of the states that are party to the Agreement on the European Economic Area. They include all the states of the European Union plus Iceland, Liechtenstein and Norway.  It enables the contracting states to participate in the EU's single market and in some but no all other programs. Switzerland has not yet ratified that Agreement but it has a number of bilateral agreements with the EU that enable it to participate in the single market.

The Brexit Referendum
The EEA Agreement guaranteed free movement of people with the result that there are many British citizens in each of the EFTA states and citizens from each and every one of the EFTA states in the UK. The current British government interprets the results of the Brtish referendum on membership of the EU as a rejection of the right of free movement. It believes that the UK must leave the EEA as well as the EU. Agreement is therefore required as to what should happen to all those expatriates as well as rights that have been acquired under the EU legislation that extends to the EGTA member states after 29 March 2919.

The Agreement with Iceland, Liechtenstein and Norway
Those matters are addressed in the Agreement on arrangements between Iceland, the Principality of Liechtenstein, 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, the EEA agreement and other agreements applicable between the UnitedKingdom and the EEA EFTA States by virtue of the UnitedKingdom’s membership of the European Union. The agreement is very much shorter than the draft withdrawal agreement from the EU. It is 69 pages long in contrast to the 585 of the withdrawal agreement and consists of 71 articles divided into 4 parts with 2 annexes.

Part 1 (arts 1 to 7) contains the objective of the agreement, definitions and similar provisions. Part 2 (arts 8 to 37) deals with citizens' rights.  Part 3 (arts 38 to 63) covers the treatment of goods on the single market during the implementation period in the withdrawal agreement which runs between the 29 March 2019 and 31 Dec 2020. Also covered are intellectual property, judicial cooperation in criminal and civil matters, data protection and public [rocurement. The last part (arts 64 to 69) sets up a joint committee which will deal with the interpretation and implementation of the treaty and dispute resolution.  The Department for Exiting the EU has published an explainer for that agreement.

The Agreement with Switzerland
The agreement with Switzerland is even shorter and deals with citizens' rights. There is also an explainer to that agreement.

Further Information
Both agreements will have to be ratified by the national legislatures of the contracting parties.  The European Union (Withdrawal Agreement) Bill proposed in the white paper Legislating for the withdrawal Agreement between the United Kingdom and the European Union (Cm 9674) is intended to be the instrument that ratifies the agreement in the UK.

Anyone wishing to discuss this article or Brexit generally should call me on 020 7404 5252 during office hours or send me a message through my contact form.