REUTERS | Kacper Pempel

Brexit: July 2018 round-up

The most significant developments in July were the publication of two government white papers: the first on the future UK-EU relationship, and the second on legislating for the withdrawal agreement between the UK and EU.

White paper on the future UK-EU relationship

Following a cabinet meeting at Chequers on 6 July 2018, the government published a statement on the UK’s vision for the future UK-EU relationship. The cabinet agreed to propose the establishment of a UK-EU free trade area for goods as part of the future economic partnership.

The next week, the government published its white paper on the future UK-EU relationship reiterating that the government’s policy is for the UK to leave the single market and the customs union, and gain flexibility to conclude new international trade agreements, making particular mention of agreements on trade in services. The white paper proposes institutional arrangements for the future UK-EU relationship, including:

  • A proposed free trade area for goods (with a facilitated customs arrangement).
  • A new economic and regulatory arrangement with the EU in financial services.
  • A new security partnership, including law enforcement and criminal justice co-operation.
  • Cross-cutting and other co-operation in areas such as data protection.

The European Parliament’s Brexit Steering Group (BSG) (which has long advocated an association agreement as an appropriate framework for the future relationship) welcomed the government’s observation in the white paper that the overarching institutional framework for the various future relationship agreements could indeed take the form of an association agreement. However, the BSG also reiterated the EU’s familiar position on the indivisibility of the four freedoms, integrity of the single market, and avoiding a sector-by-sector approach.

The European Commission subsequently published a Communication on preparing for the UK’s withdrawal from the EU. The Communication notes that the UK’s withdrawal on 30 March 2019 will have consequences for citizens, businesses and administrations in both the UK and the EU, and that preparing for Brexit needs to be a joint effort at the EU, national, and regional levels. The UK will be publishing its own technical notes on preparing for a “disorderly” Brexit in the coming weeks.

White paper on legislating for the withdrawal agreement between the UK and EU

On 24 July 2018, the Department for Exiting the European Union published a white paper, Legislating for the Withdrawal Agreement between the United Kingdom and the European Union.  The white paper confirms that a forthcoming European Union (Withdrawal Agreement) Bill will:

  • Be the primary means by which the rights of EU citizens will be protected in UK law.
  • Legislate for the transition period.
  • Create a financial authority to manage payments to be made under the financial settlement between the UK and the EU.

Preparing for the UK’s post-Brexit legislative framework

At the start of July, the European Union (Withdrawal) Act 2018 (Commencement and Transitional Provisions) Regulations 2018 (SI 2018/808) were made. This was the first statutory instrument (SI) to be made under the regulation-making powers of the European Union (Withdrawal) Act 2018 (EUWA).

Parliament produced several draft SIs under the EUWA in July, including:

  • Draft regulations amending a cultural test applied to determine whether television, video games and film productions are entitled to tax relief.
  • Environmental draft regulations that make amendments reflecting the fact that the UK will no longer be an EU member state from exit day.

To coincide with the appearance of the first SIs, Practical Law published a Brexit statutory instruments tracker, providing links to a selection of draft and enacted SIs related to Brexit.

Taxation (Cross-border Trade) Bill 2017-19

On 16 July 2018, the House of Commons voted to pass the Taxation (Cross-border Trade) Bill 2017-19 after the government accepted amendments including commitments that, after Brexit, the UK will only collect tariffs on the EU’s behalf if the EU reciprocates, and that there will be no customs border between Northern Ireland and the rest of the UK.

All remaining stages of the Bill are scheduled to take place on 4 September 2018.

Trade Bill 2017-19

The government’s Brexit-related Trade Bill 2017-19 completed its House of Commons report stage and received its third reading on 17 July 2018. The Trade Bill is principally concerned with putting in place after Brexit:

  • International trade agreements that correspond to pre-Brexit EU trade agreements.
  • Arrangements for the UK to re‐join the General Procurement Agency as an independent member.
  • The creation of a UK Trade Remedies Authority.
  • Arrangements for the collection and disclosure of information relating to trade.

The Bill is scheduled to receive its second reading in the House of Lords on 11 September 2018.

Practical Law In-house Robert Clay

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