The transition period stipulated in the Withdrawal Agreement, which ends on 31 December 2020, is intended to give citizens, companies and public administrations time to prepare for the end of the transition period. At the same time, negotiations between the EU and the UK on an agreement regarding future relations should be concluded during this period. Here is an overview of the most important information:
What has happened since 1 February 2020?
A Withdrawal Agreement was negotiated before the UK left the EU in order to ensure that the main political and economic links between the EU and the UK were not severed from one day to the next upon departure. This Agreement has been in force since 1 February 2020, the day the UK left the EU. It provides for a transition period until 31 December 2020 during which EU law continues to apply to the UK, and the UK remains a part of the EU's single market EU customs union.
The EU and the UK are also negotiating their future relationship during this transition period. The Political Declaration on the future relationship agreed to by both sides accompanies the Withdrawal Agreement and sets out the framework for negotiations.
What happens at the end of the transition period? Which preparations are necessary?
The transition period stipulated in the Withdrawal Agreement ends on 31 December 2020. It is no longer possible to extend this period. This would have required a joint decision on an extension to have been taken by 1 July 2020. The UK let this deadline pass.
As of 1 January 2021, the UK will thus no longer be part of the single market or the customs union. Even if an agreement on the future relationship is concluded by year’s end, the EU’s relationship with the UK will fundamentally change; it will be very different from when the UK was a member of the single market. Customs and tax formalities, for example, will become necessary. Citizens and businesses of Germany and the entire EU must prepare for these consequences following the end of the transition period, regardless of whether an agreement on the future partnership is reached with the UK before then or not.
The European Commission published what is known as a readiness communication on 9 July 2020 to prepare for the end of the transition period between the EU and the UK. To support this, the European Commission is currently revising and, where necessary, updating the over 90 sector-specific stakeholder readiness notices published during negotiations with the UK on the basis of Article 50.
The updated readiness notices pertaining to individual areas (e.g. customs duties, including preferential rules of origin, data protection law, industrial products, chemicals, etc.) are intended to help public administrations, businesses and the general public prepare for the inevitable changes that will occur after the transition period ends, regardless of the outcome of negotiations on future relations. More information can be found here.
The EU wants to continue to have a close partnership with the UK. We believe it is possible to reach a successful agreement on the basis of the Political Declaration. However, it is important for us to prepare for all possible outcomes to the negotiations. This includes preparing for no agreement.
What is the status of negotiations on the future relationship?
The Political Declaration envisages an agreement between the EU and the UK on their future relationship to be essentially an economic and security partnership. In accordance with the Political Declaration, the 27 member states of the EU agreed on 25 February 2020 to the negotiating mandate for the European Commission, which is conducting negotiations on the future relationship between the EU and the UK on behalf of the member states.
On this basis, the EU’s chief negotiator, Michel Barnier, presented the comprehensive draft text of the Agreement on the New Partnership with the UK in mid March, to which further components have since been added. You will find this and the other texts on the website of the Task Force for Relations with the United Kingdom.
Since March, the EU and the UK have continued with regular rounds of negotiations, the difficulties ensuing from the COVID-19 pandemic notwithstanding. The EU is conducting negotiations on the basis of the jointly agreed Political Declaration. Nevertheless significant differences in some areas have still not been resolved. There are differences in particular on the issues of fair competition, the horizontal governance of a possible agreement, and fisheries. The negotiators from the EU and the UK, Michel Barnier and David Frost, and their teams have recently further intensified negotiations. The clock is ticking: a deal must now be reached in due time in order to allow time for ratification by the European Parliament.
What role does the Withdrawal Agreement play?
Thanks to the Withdrawal Agreement, fundamentally nothing changed for citizens and businesses when the UK left the EU on 1 February 2020.
The EU’s freedom of movement (i.e. the right to live, work, study and have social security coverage anywhere in the EU and in the UK) continues to apply during the transition period.
Furthermore, EU citizens living in the UK and UK citizens living in the EU enjoy lifelong comprehensive protection of their rights; they can continue to live, work, study and enjoy social security in the UK and the EU, respectively.
These rights went into effect immediately on the basis of the Withdrawal Agreement; the resulting regulatory mandates are being transposed into national law and implemented through respective measures. In Germany, on 24 November 2020, a law amending the Freedom of Movement Act/EU came into force that takes into account the status rights of British citizens and their family members and their right to free movement under the Withdrawal Agreement. Further information is available on the website of the Federal Ministry of the Interior, Building and Community.
Since its withdrawal, the UK has had no say in the EU institutions. UK citizens are thus also excluded from participating in European citizens’ initiatives and have no right to vote in local elections in other EU countries or in European Parliament elections, nor to stand as candidates in such elections. Without an agreement, the applicable regulations for third countries outside the EU would have to be applied.
The rules that will apply to citizens and businesses who want to relocate, work or study in another country after the end of the transition phase will largely depend on the outcome of present negotiations on the future relationship between the European Union and the United Kingdom.
The special Protocol for Northern Ireland, attached to the Withdrawal Agreement, guarantees the integrity of the EU single market; at the same time, it ensures that there will be no controls at the border between Ireland and Northern Ireland and that the Good Friday Agreement remains fully in force. The Protocol provides that Northern Ireland will remain part of the UK’s customs territory but that all relevant rules of the EU single market will apply in Northern Ireland, as will the Union Customs Code. Checks and the collection of customs duties this entails will take place at the entry points to the island of Ireland in Northern Ireland.
The UK’s financial obligations towards the EU are also one of the points laid down in the Withdrawal Agreement.
The Withdrawal Agreement also establishes a joint committee and a number of specialised committees, in which the EU and the UK regularly discuss questions relating to the implementation of the Withdrawal Agreement and, if necessary, may adopt decisions by mutual consent, for example, on questions of interpretation.
It is important that the Withdrawal Agreement and the attached Protocols are implemented in full. We continue to consider this a key foundation of trust for the negotiations.
Where can I find more information about the Withdrawal Agreement?
The European Commission answers questions, including the ones below, on its website:
- What is included in the Common Provisions of the Withdrawal Agreement?
- What has been agreed on citizens’ rights?
- What has been agreed on separation issues?
- What has been agreed on the governance of the Withdrawal Agreement?
- What has been agreed regarding the financial settlement?
- Protocol on Ireland/Northern Ireland