Explanatory Memorandum to COM(2022)89 - Rules for the exercise of the Union's rights in the implementation and enforcement of the Brexit Agreement and of the Trade and Cooperation Agreement with the United Kingdom - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2022)89 - Rules for the exercise of the Union's rights in the implementation and enforcement of the Brexit Agreement and of the Trade ... |
|---|---|
| source | COM(2022)89  |
| date | 11-03-2022 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Both the Withdrawal Agreement 1 and the Trade and Cooperation Agreement 2 between the Union and the United Kingdom allow a Party to adopt and apply certain measures in order to induce compliance by the other Party with a ruling delivered by an arbitration tribunal or panel. Such measures are temporary remedies applied until full compliance is achieved 3 . The Trade and Cooperation Agreement also provides for compensatory measures, which are authorised by an arbitration tribunal at the request of a Party, if the other Party has been found to have applied remedial measures that are significantly inconsistent with the applicable provisions 4 .
Moreover, the two Agreements allow a Party to take the following measures without having to first resort to the relevant dispute settlement mechanism:
(a)Remedial measures:
(a)under the Withdrawal Agreement (in relation to a failure to add relevant instruments of Union law to the Protocol on Ireland/Northern Ireland) 5 ;
(b)under the Trade and Cooperation Agreement (in relation to subsidies, road transport and fisheries) 6 ;
(b)Rebalancing measures:
(a)under the Withdrawal Agreement (in relation to safeguard measures adopted by the United Kingdom which create an imbalance between the rights and obligations under the Protocol on Ireland/Northern Ireland) 7 ;
(b)under the Trade and Cooperation Agreement (in relation to safeguard measures adopted by the United Kingdom which create an imbalance between the rights and obligations under the Trade and Cooperation Agreement or under any supplementing agreement) 8 ;
(c)under the Trade and Cooperation Agreement (in relation to divergences in the areas of labour and social, environmental or climate protection or subsidy control) 9 ;
(c)Countermeasures under the Trade and Cooperation Agreement (in response to rebalancing measures pursuant to Article 411 of the Trade and Cooperation Agreement) 10 ;
(d)Safeguard measures:
(a)under the Withdrawal Agreement (if the application of the IE/NI Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade) 11 ;
(b)under the Trade and Cooperation Agreement (in case of serious economic, societal or environmental difficulties of a sectorial or regional nature that are liable to persist) 12 ;
(e)Suspension of obligations under the Trade and Cooperation Agreement or any supplementing agreement in case of breach of certain provisions of this Agreement or any supplementing agreement or non-fulfilment of certain conditions, in particular with regard to trade in goods, air transport, road transport, fisheries or Union programmes 13 ; and
The Union is also authorised, under the Trade and Cooperation Agreement, to suspend or terminate the application of Protocol I, in relation to one or more Union programmes, activities or parts thereof, in case the United Kingdom fails to pay its financial contribution or introduces significant changes to certain initial conditions.
The Union and the United Kingdom may conclude other bilateral agreements between them that constitute supplementing agreements to the Trade and Cooperation Agreement and such supplementing agreements shall be an integral part of the overall bilateral relations as governed by this Agreement and shall form part of the overall framework 14 . The above mentioned measures should therefore also cover such supplementing agreements.
The Union should also be able to take appropriate measures if effective recourse to binding dispute settlement under the Agreements is not possible because the United Kingdom does not cooperate in making such recourse possible.
The Council, in its decision on the conclusion of the Trade and Cooperation Agreement (the ‘Council decision’) 15 , empowered the Commission to adopt a majority of the above mentioned measures on behalf of the Union “until a specific legislative act regulating the adoption of the measures” enters into force 16 .
The Commission and the Council also agreed on a joint statement, issued at the time of the conclusion of the Trade and Cooperation Agreement, which provides that, “without prejudice to its right of initiative under the Treaties, the Commission will aim to propose the specific legislative act referred to above no later than 31 March 2022” 17 .
This legislative proposal fulfils this political commitment. The proposed Regulation empowers the Commission to adopt the measures referred to above, as well as to amend, suspend or repeal them as appropriate, by means of implementing acts. Where the measure consists of the suspension of an obligation under any of the agreements the empowerment extends to the adoption of appropriate restrictions on trade, investment or other activities within the scope of the agreement concerned. The proposed Regulation thus ensures that the Union can act in a timely and effective manner to protect its interests in implementing and enforcing both the Withdrawal Agreement and the Trade and Cooperation Agreement.
• Consistency with existing policy provisions in the policy area
There are no precedents of any policy provisions governing the withdrawal of, and the Union’s partnership with, a former Member State. The unprecedented nature of the system formed by the Withdrawal Agreement and the Trade and Cooperation Agreement is particularly noteworthy in the case of the Protocol on Ireland/Northern Ireland to the Withdrawal Agreement, which allows the United Kingdom to participate in the single market for goods in respect of Northern Ireland.
The proposed regulation is intended to apply instead of the empowerment given to the Commission in the above mentioned Council decision on the conclusion of the Trade and Cooperation Agreement. Following the adoption of the proposed Regulation, the Commission will therefore submit a proposal for the repeal of the relevant parts of that Decision.
• Consistency with other Union policies
Given the broad scope of application of the two Agreements, measures might have to be adopted in relation to the following Union policies: the common fisheries policy, the common transport policy, the internal market policy, the research and development policy, the space policy and the common commercial policy.
The proposed Regulation is lex specialis with regard to sectoral provisions of Union law to the extent that these provisions govern the same subject matter. Possible overlaps might exist e.g. in the field of the common commercial policy 18 or the transport policy 19 .
Given the specific features of the Union’s policies in the Area of Freedom, Security and Justice, the proposed Regulation does not cover measures within the scope of those policies.
A separate legislative proposal governs the adoption of measures in the area of Euratom’s research and training programmes.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal bases are those in the Treaty on the Functioning of the European Union (TFEU) which govern the areas in which unilateral and enforcement measures may have to be adopted, namely:
- Article 43 TFEU (fisheries);
- Articles 91 and 100 TFEU (transport);
- Articles 173, 182, 188 and 189 TFEU (Union programmes);
- Article 207 TFEU (common commercial policy).
• Subsidiarity (for non-exclusive competence)
The proposed Regulation implements the Trade and Cooperation Agreement and the Withdrawal Agreement, both of which are EU-only agreements. Since the objective of laying down rules and procedures governing the exercise of Union's rights under the Withdrawal Agreement and the Trade and Cooperation Agreement, cannot be sufficiently achieved by the Member States but can rather, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. However, measures adopted under the proposed initiative will affect Member States and this situation justifies the recourse to comitology procedures.
• Proportionality
Similarly, to the extent that the Union’s rights to be exercised are set out in the Agreements concerned, the proposed measures do not exceed what is strictly necessary to achieve the objective to ensure a swift and effective exercise of those rights. Moreover, the conditions applying under the Withdrawal Agreement and the Trade and Cooperation Agreement to the adoption of unilateral and enforcement measures ensure that these measures are limited to what is strictly necessary to achieve the specific purposes laid down therein.
• Choice of the instrument
The form of a regulation fits best the objective pursued, namely to lay down general principles and uniform conditions for the exercise of the rights available to the Union in implementing and enforcing the Withdrawal Agreement and the Trade and Cooperation Agreement or any supplementary agreement.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
• Stakeholder consultations
The initiative is of a procedural and institutional nature.
• Collection and use of expertise
• Impact assessment
No impact assessment has been carried out for the following reasons:
1. No policy options are available to the Commission because: (a) the envisaged proposal organises how measures already agreed in two international agreements are taken within the Union with no margin for variation, and (b) the Commission has committed before the European Parliament and the Council to submit a proposal for this legislative act by a given date.
2. No directly identifiable impacts are expected given the procedural nature of the act.
• Regulatory fitness and simplification
• Fundamental rights
Measures adopted under the proposed Regulation would be a lawful action by the Union under the Charter of Fundamental Rights. This is because this action would be taken in conformity with the requirements that the action be taken on the basis of a proper legal basis, by the competent authorities, in pursuit of a legitimate objective, namely that of exercising the Union’s rights under the above Agreements, and in line with the principle of proportionality.
4. BUDGETARY IMPLICATIONS
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
A review of the implementation of the proposed Regulation is foreseen within five years of its entry into force. This period is in line with the joint review of both Parties to the TCA as provided for in Article 776 of the TCA.
• Explanatory documents (for directives)
• Detailed explanation of the specific provisions of the proposal
Article 1 lays down the subject matter of the proposed Regulation, namely to establish rules and procedures to ensure an effective and timely exercise of the Union's rights in enforcing and implementing the Withdrawal Agreement and the Trade and Cooperation Agreement.
These rights may be exercised by means of the measures listed in the second paragraph of that Article, in accordance with the rules laid down in Article 2 and the committee procedure laid down in Article 3. In particular, these measures must be limited to what is necessary to fulfil their purpose as provided for in the relevant provisions of the Withdrawal Agreement and the Trade and Cooperation Agreement.
Article 4 confirms the lex specialis character of the proposed Regulation. Article 5 provides for a review of this Regulation by the Commission within five years of its entry into force, in order to ascertain that it remains fit for purpose.