Hamburg and Brexit Overview of the withdrawal agreement

After lengthy negotiations, representatives of the EU and the United Kingdom agreed on a draft withdrawal agreement on 14 November 2018. On 17 October 2019, the EU and the UK agreed to amend the withdrawal agreement with regard to the Northern Ireland Protocol and the Political Declaration on future relations with the EU.

Overview of the withdrawal agreement

The draft withdrawal agreement provides for a transitional period until the end of 2020 following the UK's withdrawal from the EU. During the transitional period, which can be extended once by up to two years, EU law remains applicable to the UK. The purpose of this period is to further negotiate relations between the UK and the EU, e.g. by adopting a free trade agreement.

Approval within the EU is not considered to be problematic.  Whether the withdrawal agreement will be ratified in the British House of Commons is currently highly unclear.  

During the transitional period it is planned to:

1. EU law continues to apply

Union law shall continue to apply to the United Kingdom. This also includes legislative changes made without the United Kingdom being involved until the end of the transitional period.

2. The ECJ remains competent

The United Kingdom remains bound by decisions of the European Court of Justice until the end of the transitional period.

3. Rights of EU citizens remain in place

EU citizens living in the United Kingdom or UK nationals living in the EU and their family members shall have unlimited rights under Union law before the end of the transitional period. They will therefore continue to be able to live, work or study under the same conditions as domestic citizens and will not be discriminated on the basis of nationality. The withdrawal agreement continues to give EU citizens in the UK and UK citizens in the EU a right of residence. The same applies to their family members, for whom reunification is possible under Union law. Access to social insurance systems will continue to be guaranteed to residents to the same extent as before. Citizens who enter the EU or the UK during the transitional period will also enjoy the same rights.

4. The fundamental freedoms remain in place

During the transitional period, the fundamental freedoms will continue to apply. All products imported into the market under EU rules by the end of the transitional period will be able to reach the final consumer without further requirements even after the end of the transitional period. For the import and export of animals and animal products, on the other hand, the third country rules apply in any case from the end of the transitional period. Intellectual property rights recognised by Union law are automatically recognised by the United Kingdom as national intellectual property rights.

5. The United Kingdom no longer has a say

Although Union law, including amendments made during this period, will remain directly applicable to the United Kingdom during the transitional period and the United Kingdom will remain under the jurisdiction of the ECJ, it will neither be represented in the EU institutions nor involved in decisions and will lose all say.

6. Financial obligations will be met

The United Kingdom undertakes to pay its share of all financial obligations arising during its membership of the EU. The withdrawal agreement does not specify any amount, but only the methods of its calculation. The main guidelines are that no Member State is more burdened by withdrawal and that the United Kingdom is not obliged to pay more than it would be if it were a member. Estimates of the absolute amount vary between EUR 40 and 50 billion. For the 2019 and 2020 budgets, the UK is expected to contribute as if it were still a Member State.

7. The European data protection regime remains applicable for the time being

At the end of the transitional period, the United Kingdom's access to all EU networks and databases will cease, unless otherwise specified. Information which the United Kingdom receives or has received from private or public actors in other Member States before the end of the transitional period shall remain subject to the European data protection rules until the EU has formally established that the United Kingdom's data protection complies with the EU's level of data protection.

8. Northern Ireland

At the end of the transitional period, Northern Ireland shall become part of the customs territory of the United Kingdom. However, EU customs rules apply in practice. This means that Northern Ireland retains unhindered access to the EU internal market and relevant EU internal market rules in relation to goods in Northern Ireland remain dynamically applicable. The Northern Ireland Protocol also provides for a democratic say for the Northern Ireland Parliament: Four years after the Protocol enters into force, which will be at the end of the transition period, Parliament must vote by simple majority for the rules to continue to apply. If the vote is positive, there will be a four-year period of continued validity. If the vote is negative, the rules will continue to apply for two years and then cease to apply.

9. A Joint Committee is set up

A Joint Committee will be set up, composed equally of representatives of the United Kingdom and the EU. It will be responsible among other things for exchanging information and settling disputes in the context of the application of the withdrawal agreement and may take decisions and make recommendations. The Committee is also responsible for deciding on the extension of the transitional period.

10. Future relations

The Political Declaration on future relations with the EU focuses in particular on future economic relations. It is now explicitly based on a free trade agreement. A "free trade area" and the possibility of a closer relationship are no longer mentioned after the amendment of the withdrawal agreement. Due to geographical proximity and close economic ties, robust and comprehensive agreements for fair competitive conditions are to be reached ("level-playing field").

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