Out-Law News | 26 Feb 2018 | 11:24 am | 2 min. read
A "draft text for discussion" states that the transition period should last for "how long it will take to prepare and implement the new processes and new systems that will underpin the future partnership" between the UK and the EU.
"The UK agrees this points to a period of around two years, but wishes to discuss with the EU the assessment that supports its proposed end date," it said in the document, which was published by the government's Department for Exiting the EU.
The EU's negotiating directives propose that the transition period should come to an end on 31 December 2020, which makes it shorter than the two-year transition period preferred by the UK. This date has been selected as it is the end of the EU's current seven-year budget period.
Guy Lougher, Brexit expert at Pinsent Masons, the law firm behind Out-Law.com, said that the UK government's position was "understandable".
"In practical terms, the suggestion that the implementation period be determined by how long it will actually take to prepare and implement the new processes and new systems that allow a seamless transition is something that will be well-received by many businesses operating in the UK," he said. "For example, there will need to be put in place new customs clearance procedures and systems to ensure seamless post-Brexit trade between the EU and UK, and especially in relation to trade between Ireland and Northern Ireland, which will take time to implement."
"It is understandable that the government would rather this is taken into consideration when considering the duration of the implementation period, instead of being limited by an arbitrary duration or cut-off date," he said.
The EU has proposed that the UK continue to apply EU law "as if it were a member state" during the transition period. During that period, the UK would continue to participate in the EU customs union and single market, and would remain bound by EU trade policy, customs laws and tariffs. However, it would not be able to participate in EU decision-making, and would no longer be represented at the EU Commission, parliament and Council.
EU "institutions, bodies, offices and agencies", in particular the Court of Justice of the EU (CJEU), should retain the ability to exercise their powers under EU law over the UK and UK citizens during the transitional period, the EU has said. It has also suggested that the UK should potentially be subject to EU sanctions during the transitional period where a dispute could not be resolved before the CJEU in sufficient time.
The UK believes that there is "broad alignment between the UK and EU positions, with only a small number of areas requiring discussion", according to its own document. However, it has proposed a number of "technical amendments" to the EU's position paper of 7 February 2018, along with some more fundamental changes.
In particular, the UK is proposing that the EU "submit proposals for new Union acts to the UK, recognising the principle of subsidiarity", where these are intended to come into force during the transition period. It has also proposed that, rather than the EU impose sanctions on the UK, a committee be set up to "[protect] the rights and interests of both parties" where a dispute arises. This provision should be "supplemented by an article of good faith, applying to the Withdrawal Agreement in general".