EU Toughens Demands on U.K. for Brexit Transition in Draft

(Bloomberg) -- The European Union has stepped up the demands for concessions that the U.K. must make during the transition period that follows Brexit, pushing back the cut-off date for the acquisition of rights for EU citizens, according to revised draft negotiating directives obtained by Bloomberg.

The U.K. won’t be able to apply new immigration rules to EU citizens arriving during the transition period, according to the document dated Jan. 15. That means any EU citizen arriving in Britain before the end of 2020 would be able to remain indefinitely.

“The provisions of the citizens’ rights part of the withdrawal agreement should apply as from the end of the transition period,” according to the draft. “The ‘specified date’ referred to in paragraph 8 of the Joint Report should consequently be defined as that of the end of the transitional period,” the document says, referring to the agreement between the European Commission and the U.K. government last month.

The move of the cut-off date is likely to have implications for the eight-year period during which U.K. courts may have to consult with the European Court of Justice for the interpretation of the withdrawal agreement. This was one of the most contentious issues during the first stage of the negotiations, as supporters of Brexit demand that the country reclaims its legislative sovereignty.

EU Rules

The reason for the tightening of language is to make clear that the U.K. remains bound by the framework of EU rules throughout the transition period, a person familiar with the discussions said. The Joint Report published last month specified that the cut-off date could change to take into account the transition.
 
“The direct effect and primacy of Union law should be preserved” during the transition period, according to the draft document, which is subject to further revisions and approval by ministers from the remaining 27 EU nations at the end of January. The revised directives also state that the U.K. will have to seek permission to recreate and negotiate trade deals with third parties.

“During the transition period, the United Kingdom may not become bound by international agreements entered into in its own capacity in the fields of competence of Union law, unless authorized to do so by the Union,” according to the draft, which was first reported on by the Financial Times. The U.K. wants to copy EU trade deals with other countries to maintain the benefits once it leaves and negotiate new deals that will kick in after the end of the transition.

More Liabilities

The document also signals that the U.K. may be liable to pay a share of any new obligations, including financial commitments, undertaken by the EU during the transition period, without having a say over those deals. This could increase the final exit bill. “The United Kingdom will remain bound by the obligations stemming from the agreements concluded by the Union, or by Member States acting on its behalf, or by the Union and its Member States acting jointly, while the United Kingdom should however no longer participate in any bodies set up by those agreements,” according to the draft.

Negotiations on the transition period are due to start at the end of January once the EU has finalized its position. Businesses are keen for the terms of the two-year transition to be nailed down as soon as possible so they know they will have time to plan before the U.K. leaves in March 2019.

“Our hearts are still open,” EU President Donald Tusk told lawmakers in Strasbourg, France, on Tuesday, reiterating the hope that the U.K. will have “a change of heart” and decide not to leave the EU.

--With assistance from Jonathan Stearns Emma Ross-Thomas and Ladka Bauerova

To contact the reporters on this story: Nikos Chrysoloras in Strasbourg, France at nchrysoloras@bloomberg.net, Ian Wishart in Brussels at iwishart@bloomberg.net.

To contact the editors responsible for this story: Heather Harris at hharris5@bloomberg.net, Jones Hayden

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