Relevant Relationship Agreement Law: a guide for the perplexed

In this post, Jack Williams of Monckton Chambers explains how the Trade and Cooperation Agreement is implemented into domestic law via the EU (Future Relationship) Act 2020, enacted on 30 December 2020.

This is the third blog post in a series concerning the domestic implementation of the UK’s new relationship with the EU – EU Relations Law. The first blog post concerned “retained EU law” – the converted and preserved EU law of old as now retained in domestic law after the end of the UK’s EU membership and the transition period on account of the EU (Withdrawal) Act 2018 (the “EU(W)A”). The second blog post concerned “relevant separation agreement law” – the domestic law implementing the Withdrawal Agreement, the EEA EFTA Separation Agreement and the Swiss Citizens’ Rights Agreement on account of the EU (Withdrawal Agreement) Act 2020 (the “EU(WA)A”).

This blog post concerns the EU (Future Relationship) Act 2020 (the “EURA”), which implements into domestic law the Trade and Cooperation Agreement (the “TCA”), the  Security Procedures for Exchanging and Protecting Classified Information Agreement (the “SOIA”) and the Nuclear Cooperation Agreement (the “NCA”). I shall refer to these three Agreements in this blog post as “the Agreements”. The EURA also allows for the implementation of other arrangements and agreements that are either foreseen in the Agreements or may supplement the TCA. These future agreements together with the Agreements are referred to in the Act collectively as “the future relationship agreements” (section 37(1)).

What is “relevant relationship agreement law”?

Unlike the respective counterparts in the EU(W)A and the EU(WA)A, the EURA does not provide a label for the group of new domestic laws which implement the future relationship agreements. I shall refer to it as “relevant relationship agreement law”. This reflects the use of “future relationship agreements” in the EURA to define collectively the international instruments (see section 37(1)) and is consistent with the EU(WA)A’s use of “relevant separation agreement law” regarding the three Withdrawal Agreements. (I have dropped the “future” because I find the usage of that adjective both needless and curious – the law is applicable as of 1 January 2021, i.e. circa 24 hours after enactment. This also explains my use of EURA, rather than EU(FR)A.)

There are thee categories of “relevant relationship agreement law”. These are: (i) provisions of the Agreements that have been implemented in domestic law by the EURA, whether directly in the Act itself or indirectly by amendments to other domestic enactments; (ii) provisions of the Agreements that have been made directly effective in domestic law by the EURA; and (iii) domestic implementing regulations for the future relationship agreements (the powers to enact such having been granted by the EURA).

Each of the three categories has several sub-categories and nuances, as shown in the diagram below, which sets out “relevant relationship agreement law” in full. This is a complex web of new laws and labels. I explain each category (and sub-category) in turn below.

Category 1: Implemented Provisions

The first category of “relevant relationship agreement law” is comprised of the provisions of the Agreements that are specifically implemented in domestic law by the EURA. These are “specifically” implemented in the sense that the provisions of the (international) Agreements are expressly implemented in domestic law by the Act (i.e. with new domestic law changes), rather than having been generally implemented by either making them – the international provisions –  directly effective or by giving powers to Ministers to implement the international provisions in turn. These provisions are specifically implemented either directly in the Act itself or indirectly by amendments to other domestic enactments, including both other Acts and secondary legislation (some of which is “retained EU law”).

There are three sub-categories of the implemented provisions category: (i) security; (ii) trade; and (iii) transport. I address each in turn.

Security: Part 1 of EURA deals with security matters. First, sections 1 – 6 and Schedule 1 to the EURA implement the TCA’s provisions on criminal records and the retention and transfers of information regarding convictions. Second, sections 7 – 8 and Schedule 2 to the EURA implement the TCA’s provisions on passenger name record data (“PNR data”) and the disclosure of vehicle registration data. PNR data enables law enforcement authorities to identify unknown individuals who may be involved in terrorism or serious crime, as well as individuals at risk. Third, sections 9 and 10 and Schedule 3 implement the TCA’s provisions on mutual legal assistance in criminal matters, for example, in relation to evidence, asset freezing and confiscation, customer information orders in relation to safe deposit boxes, and the accreditation of forensic service providers. Finally, sections 11 – 13 amend the Extradition Act 2003 in order to implement the TCA’s provisions on extradition arrangements, which are akin to the EU’s Surrender Agreement with Norway and Iceland but with further safeguards for individuals beyond the European Arrest Warrant framework.

Trade: Part 2 of the EURA deals, in part, with trade matters. First, sections 14 – 18 implement the TCA’s provisions (in the Technical Barriers to Trade chapter and related annexes, relating to products such as medicinal products, motor vehicles, equipment and parts, chemicals, organic products and wine) on the disclosure of non-food safety information, both within the UK (for information received from the EU) and to the European Commission (for information from the UK). The information shared is for the purposes of the protection of consumers, health, safety or the environment. Second, section 19 and Schedule 4 implement the TCA’s provisions on the use of relevant product standards. Most areas of UK product legislation forms part of “retained EU law”, some of which enables the Secretary of State to designate certain product regulation standards to ensure consumer safety, public health and environmental protection. The TCA generally requires the UK to use relevant international standards. Schedule 4 amends a series of “retained EU laws” for this purpose. Third, section 20 makes amendments to the Customs and Excise Management Act 1979 to enable HMRC to disclose customs information to, and cooperate with, other customs services. This implements the Customs and Trade Facilitation chapter in the TCA and the Protocol on Mutual Administrative Assistance.

Transport: Part 2 of the EURA deals, in part, with transport matters. First, sections 23 and 24 implement the TCA’s provisions (in the Transport of Goods chapter) on the terms of carriage for goods between the UK and EU. In short, UK and EU road haulage operators are permitted access to each other’s markets, providing the operator holds a correct licence. The EURA amends certain “retained EU law” to achieve this: the model UK Licence for the Community in UK law now corresponds to the model licence in the TCA, UK law now reflects the reduced number of international journeys permitted within a set time under the TCA, and UK law now permits journeys allowed under the TCA. Second, section 25 implements the TCA’s provisions on exchange of driver card data between the UK and the EU.

Category 2: Directly Effective Provisions

The second category of “relevant relationship agreement law” is the body of domestic law that incorporates the provisions of the Agreements directly by giving them direct applicability and effect in domestic law. (For the avoidance of doubt, this is not the same as, or subject to the same tests of, the concept of “direct effect” in EU law: here it simply means that the international provisions are themselves transposed into domestic law without more detailed domestic enactment.) There are four sub-categories: two instances particular provisions in the Agreements being made directly effective (one in relation to social security and one in relation to VAT and debt recovery) and a general implementation of other provisions in the TCA and SOIA which have otherwise not been implemented by means of the two other categories of “relevant relationship agreement law”. This general implementation, found in section 29, is extraordinary. I address each in turn.

VAT and debt recovery: section 22 makes the TCA’s “Protocol on administrative co-operation and combating fraud in the field of Value Added Tax and on mutual assistance for the recovery of claims relating to taxes and duties” (the “Protocol on VAT and Debt Recovery”) and any decisions or recommendations adopted by the Specialised Committee in accordance with that Protocol (section 22(4)) directly effective in domestic law. These provisions are made directly effective at the time when the Protocol on VAT and Debt Recovery comes into effect, or otherwise when HMRC, by regulations, substitutes a later time for particular provisions (section 22(6) and (7)). The Protocol on VAT and Debt Recovery, in short, commits the UK and EU to co-operate and share information for the purposes of ensuring trader compliance with VAT legislation and giving assistance to each other in recovering tax and duties debts by collecting claims referred from another country as if they were domestic claims.

Social security: section 26 makes the TCA’s provisions on social security co-ordination, including the Protocol on Social Security Coordination (the “SSC Protocol”) directly effective in domestic law. These provisions are made directly effective at the time when the TCA comes into effect. In short, the TCA provisions and the SSC Protocol ensure that individuals who move between the UK and the EU in the future will be able to protect their state pension contributions and access a range of social security benefits (including healthcare). Moreover, the provisions provide for healthcare for people who are travelling between the UK and the EU, similar to that provided under the European Health Insurance Card (“EHIC”) scheme.

I note in passing that sections 22 (VAT and debt recovery) and 26 (social security) use different formulations: the former states that the provisions “have effect”, whereas the latter states that the TCA provisions “form part of domestic law”. It is unclear whether this difference in wording is intended to have, or indeed has, any impact. It appears that the effect of both formulations is to provide for the direct implementation of international law into domestic law. The section 26 wording is to be preferred. See below on another difference in formulation between the two provisions in relation to the provisions’ relationship with other domestic law.

General implementation of other TCA and SOIA provisions: section 29 makes quite extraordinary provision for the general implementation in domestic law of all other – otherwise unimplemented – TCA and SOIA provisions. It provides that existing domestic law has effect “with modifications as are required for the purposes of implementing in [domestic law] the [TCA] or the [SOIA]”. This requires public authorities, private parties, and the Courts to conduct three exercises in respect of international agreements without any sufficient guidance: first, to interpret the relevant provisions; second, to implement the provisions; and third, to modify other domestic law. This involves immeasurable exercises of crystal ball gazing and policy choices at each stage. What is the correct interpretation of the Agreements? How should the provisions properly or best be implemented? How should domestic law otherwise be altered or interpreted?

These problems are exacerbated in circumstances where many of the Agreements’ provisions are deliberately vague in order to secure consensus between the UK and the EU, and where there appears to be no condition that the international provision be sufficiently clear and precise, unlike would be the case for direct effect in EU law. Moreover, unlike with the European Communities Act 1972, there is no preliminary reference procedure to assist domestic Courts.  The practical problems and uncertainty that this provision is likely to cause is well-demonstrated by my colleague George Peretz Q.C. in relation to the state subsidy regime in this blog post.

Nevertheless, it is important to recognise the limited scope of the general implementation provision in section 29 in some respects. First, it does not apply to the NCA. Second, it applies only to provisions of the TCA and SOIA that are not implemented by another mechanism (i.e. another category of “relevant relationship agreement law”): see section 29(2). This means that the direct effectiveness is “weak” in the sense that it is overridden by any specific legislation designed to implement the relevant provision. One would imagine (indeed, hope) that over time section 29 becomes less relevant once other mechanisms in the Act to implement the Agreements are utilised. Third, the section 29 conduit does not allow post-ratification modifications to the Agreements to flow down it: see section 29(3) and the definition of “relevant day” in section 29(4). Fourth, the section 29 conduit is, of course, materially limited by the nature of the Agreements’ provisions that are capable of flowing down it in the first place. Many provisions in the TCA and the SOIA are inherently limited to the international plane, being concerned with state-to-state rights and obligations rather than those of and for individuals. See, for example, Article INST.29(2) of the TCA, which reads: “The decisions and rulings of the arbitration tribunal shall be binding on the Union and on the United Kingdom. They shall not create any rights or obligations with respect to natural or legal persons.” Finally, any modification must be “required” to implement the TCA or SOIA in domestic law and any implementation must be “necessary” for the purposes of comply with the UK’s obligations under the TCA or SOIA (section 29(1)).

Category 3: Domestic Implementing Regulations

The EURA provides Ministers and the devolved authorities several powers to produce domestic implementing regulations for the relevant future relationship agreements. It is convenient to group these secondary powers together.

First, section 28 amends certain “retained EU law” to include a power to implement in domestic law the obligations and rights in the NCA. In short, the NCA provides non-proliferation assurances, including in respect of nuclear safeguards; provides a framework for nuclear trade in nuclear materials and technology; facilitates research and develop; and enables exchange of information and expertise.

Second, section 27 amends a power in the International Organisations Act 1968 to enable Orders in Council to be made to extend privileges and immunities to EU and Euratom organisations and bodies despite the UK no longer being a member of those organisations. his power comes into force on 1 March 2021: see Regulation 3 of the European Union (Future Relationship) Act 2020 (Commencement No. 1) Regulations 2020.

Third, in circumstances where there is a new agreement between the UK and EU that extends the sharing of PNR data to sea and rail operators, section 7(c) and paragraph 18 of Schedule 2 grants a power to modify the Passenger Name Record Data and Miscellaneous Amendments Regulations 2018 (S.I. 2018/598) (known as the “PNR regulations”), so that they apply to sea and rail travel. This enables the implementation of potential changes to the Agreements and also enables the implementation of bilateral agreements with EU Member States. It is notable that the joint Political Declaration accompanying the TCA reaffirms the parties’ intention to extend the scope of Title III of Part Three of the TCA to PNR data provided by rail and maritime operators in the future.

Fourth, section 21 confers on HMRC a power to make regulations for the purpose of monitoring or controlling the movement of goods on the grounds of public health or safety, national security, or the environment (including the WTO’s SAFE Framework for Standards). It also enables HMRC to make regulations that implement the TCA’s provisions on customs and trade standards (pursuant to the Customs and Trade Facilitation chapter in the TCA) and international obligations and standards governing the movement of goods. This power comes into force on 1 March 2021: see Regulation 3 of the European Union (Future Relationship) Act 2020 (Commencement No. 1) Regulations 2020.

Fifth, section 31 grants a wide Henry VIII power to make regulations as deemed “appropriate” to (i) implement the TCA, the NCA, the SOIA and “any relevant agreement”, and (ii) deal with matters “arising out of, or related to” the TCA, the NCA, the SOIA or “any relevant agreement”.

“Relevant agreement” is defined in section 31(7) as any future relationship agreement (i.e. any supplementing agreement or agreement otherwise envisaged by the Agreements) which is not the TCA, the NCA or the SOIA. This includes any competition co-operation agreement under the TCA. But it also includes unknowable and undrafted supplemental agreements. Parliament has given the Government a blank cheque.

It is a wide Henry VIII power because it enables the regulations to make any provision that could be made by an Act, including the modification of the EURA. Regulations under section cannot, however: (i) impose or increase taxation or fees; (ii) make retrospective provision; (iii) create relevant criminal offences; (iv) amend, repeal or revoke the Human Rights Act 1998 (or subordinate legislation made under it) or (v) amend or repeal the devolution statutes (section 31(4)).

Examples of what this power will likely be used for include: the implementation of modifications to the Agreements; the implementation of decisions agreed between the UK and the EU, such as in the Partnership Council under Article INST.1 of the TCA; the re-implementation any aspect of the Agreements where it has already been implemented (e.g. under section 29); the making of more detailed implementation of the TCA’s provisions certain topics (e.g. on drivers’ hours and the use of tachographs in freight vehicles and under the energy part of the TCA); the making of any amendments to cross-references in and to the Agreements (e.g. where the number or references within the Agreements has changed following the ‘legal scrubbing’ of them); the implementation of the competition cooperation agreement envisaged in the TCA; and the implementation any agreed arrangements on the recognition of professional qualifications in accordance with the TCA’s framework.

Sixth, sections 32 and 33 provide powers to make secondary legislation relating to the functioning of the Agreements.

Section 32 grants powers in relation to (i) the provisional application and coming into force of the Agreements, and (ii) the ability to terminate or suspend the effect of implementing provisions in the Act in the case of non-ratification or other breakdown of provisional application, or resume effect of such provisions. Again, this is a wide Henry VIII power (see section 32(2)). Again, there are similar restrictions as to what this power can be used for, as with section 31. It is notable, however, that, unlike with section 31, there is no prohibition on regulations with retrospective effect or the creation of taxes for regulation 32. That said, the temporal scope of section 32 is limited: FINPROV.11.2 in the TCA provides for provisional application to continue until 28 February 2021 – unless entry into force of the ratified agreement occurs before then – although the Partnership Council does have the ability to agree a different end-date for provisional application.

Section 33 grants various powers to make regulations relating to the functioning of the TCA, SOIA and any “future relationship agreement” (as defined by section 37). These regulations can be for:

• the suspension, resumption or termination of the TCA, SOIA or any other future relationship agreement – but only “in accordance with the terms applicable to the agreement”, for example under INST.35; INST.36; LAW.GEN.5; and LAW.PRUM.19 of the TCA (section 33(1));

• the implementation or removal of any relevant remedial measures under the TCA or any other future relationship agreement, or otherwise in connection with the taking of any such relevant remedial measure – the term “relevant remedial measures” is defined in section 33(9) as safeguard measures or re-balancing measures under Article INST.36 of the TCA – these can be taken “if serious economic societal or environmental difficulties… that are liable to persist arise” (section 33(2)); and

• the implementation of any agreed resolution of a dispute under the TCA, SOIA or any other future relationship agreement, or otherwise in connection with any such dispute (section 33(3)).

These powers ensure that the UK can act quickly to protect UK interests where it decides to take safeguard measures or to suspend parts of the agreements in response to a given trigger including non-compliance in the context of a dispute. They are again wide Henry VIII powers (see section 33(4)), meaning that domestic primary legislation can be altered for the above purposes. There are a number of limitations, however: regulations under this section may not: (i) make retrospective provisions; (ii) create a relevant criminal offence; (iii) confer a power to legislate; (iv) implement a ruling of an arbitration tribunal under the TCA or any other future relationship agreement; (v) amend, repeal or revoke the Human Rights Act 1998 (or any subordinate legislation made under it); or (vi) amend or repeal the devolution statutes.

Seventh, section 39 gives Ministers the power by regulations to “make such provision as the Minister considers appropriate in consequence of” the EURA and to “make such transitional, transitory or saving provision as the Minister considers appropriate in connection with the coming into force of any provision of” the EURA. See, also, Part 1 of Schedule 6. It should be noted that consequential powers are construed strictly by the Courts to permit the minimum amendments necessary and with a presumption against substantive changes that interfere with rights or liabilities (see, for example, Ye Olde Cheshire Cheese Ltd v Daily Telegraph Plc [1988] 1 W.L.R. 1173). Financial provisions to comply with the Agreements are set out in sections 34 and 35.

For provisions in relation to the parliamentary procedure for the enactment of each sub-category of regulations above, see Part 1 of Schedule 5 to the EURA. Powers that can be exercised by the devolved governments are exercisable insofar as they are within devolved competences (see Part 2 of Schedule 5 to the EURA).

Interpretation of “relevant relationship agreement law”

Section 30 states that UK Courts and tribunals “must have regard to” Article COMPROV.13 of the TCA when interpreting the TCA (and any supplementing agreement). That Article provides that the TCA provisions shall be interpreted “in good faith in accordance with their ordinary meaning in their context and in the light of the object and purpose of the agreement in accordance with customary rules of interpretation of public international law, including those codified in the Vienna Convention on the Law of Treaties”. It also provides that a domestic Court’s or Tribunal’s interpretation “shall not be binding on the courts of the other Party”, so the UK Courts and Tribunals are not, for example, bound by the CJEU’s interpretation of the TCA and vice versa. It is not to be forgotten, however, that Article INST.29(4A) of the TCA states that “the courts of each Party shall have no jurisdiction in the resolution of disputes between the Parties under this Agreement.”

Amendments to “retained EU law”

The EURA makes amendments to “retained EU law”. It does so in two ways. First, it amends “retained EU law” directly and specifically itself. For example, “retained EU law” is amended on the face of the Act in sections 23 and 24 (transport), 28 (NCA), Part 1 of Schedule 2 (PNR) and Schedule 4 (international standards). Primary legislation amending what is, at least in form, secondary legislation is an intriguing proposition (it’s usually the other way round). It may well mean that the amended provisions of regulations, for example, now have the status of primary legislation and so are immune from challenge on ordinary grounds of judicial review (cf. R (on the application of The Public Law Project) v Lord Chancellor [2016] UKSC 39). The lesson? When reading “retained EU law” (or indeed any legal provision!), it always pays to read the “amended by” notes to track down the originating source of any amendments. Second, the EURA grants considerable Henry VIII powers to make regulations, including to amend “retained EU law” (as discussed above). This therefore grants Ministers an alternative to the section 8 deficiency correction power in the EU(W)A, often without the same restrictions or limitations.

Relationship with other domestic law

In a previous blog post, I explored the hierarchy between “retained EU law”, “relevant separation agreement law” and other domestic law. In short, “retained EU law” is supreme over all pre-IP Completion day domestic law, but not later law, and “relevant separation agreement law” is supreme over all other domestic law (including “retained EU law”), whether pre-existing or post-dating the “relevant separation agreement law”.

Where does “relevant relationship agreement” law sit within this hierarchy? The EURA is unfortunately (largely) silent on this matter and what it does say requires parsing.   

First, “retained EU law”. As “relevant relationship agreement law” is made on or after IP Completion day, the principle of supremacy does not apply to the “retained EU law” (section 5(1), EU(W)A). This prima facie means that “relevant relationship agreement law” trumps “retained EU law” to the extent that there is any inconsistency. There remain open questions, however, which may arise before the Courts in order to test and challenge this conclusion based on the status of “retained EU law” under the EU(W)A: to what extent does the line of authority on constitutional statutes bite and thus render the EURA subject to an assessment of whether and how “retained EU laws” are expressly trumped?

Second, “relevant separation agreement law”. Section 7A(3) (general implementation of the Withdrawal Agreement) and section 7B(3) (general implementation of the EFTA EEA Agreement and Swiss Citizens’ Rights Agreement) of the EU(W)A provide that “every enactment (including an enactment contained in [2018 Act] is to be read and has effect subject to [the rights and liabilities (etc) of the Withdrawal Agreement]”. Note that “enactment” is defined in sections 20 of the EU(W)A and section 39 of the EU(WA)A Act and, for the purposes of the Act, means “an enactment whenever passed or made” and therefore captures legislation even if passed after the EU(W)A is passed. Importantly this would appear to capture the EURA.

This appears to mean, prima facie, that at least those two categories of “relevant separation agreement law” in section 7A and 7B of the EU(W)A trump “relevant relationship agreement law” to the extent that there is any inconsistency. Put another way, as a matter of domestic law, the provisions in the EU(W)A appear to give priority to the Withdrawal Agreements over the TCA, the NCA and SOIA.

This feels instinctively strange: the future relationship agreements are later in time and govern the new, ongoing relationship between the parties. To the extent any domestic “relevant separation agreement law” remains expressly unamended, one would nevertheless still expect later “relevant relationship agreement law” to impliedly trump it.

Oddly, however, the EURA does not expressly disapply sections 7A(3) and 7B(3) in the EU(W)A, and is otherwise largely silent on relevant, hierarchical matters except in three places:

• The Protocol on VAT and Debt Recovery and the Social Security co-ordination provisions: section 22(1) on the Protocol states that the TCA’s provisions have effect “in spite of anything in any enactment”. This is to be contrasted with section 26(2) (direct implementation of the social security co-ordination provisions of the TCA), which states that: “[a]ny enactment has effect on and after the relevant day with such modifications as are required in consequence of [the direct implementation] or otherwise for the purposes of implementing the provisions mentioned”. It is unclear whether the difference in wording is intended to have, or indeed has, any impact. (The section 26 wording is to be preferred, despite its prolixity.)

• The general implementation provision: section 29(1) states that “[e]xisting domestic law” has effect “with such modifications as are required for the purposes of implementing” the TCA or SOIA.

It appears that for these categories of “relevant relationship agreement law”, the intention is that they do trump conflicting “relevant separation agreement law”. Whether this is successful will depend on whether (i) sections 22, 26 and 29 are interpreted by the Courts as (sufficiently) expressly overriding sections 7A(3) and 7B(3) of the EU(W)A, or, in any event (ii) implied revision of the EU(W)A is actually sufficient despite its terms (depending on whether that Act is a constitutional statute and/or whether the “relevant separation agreement law” implemented by it enjoys that status and to what extent).

In any event, the other sections of the EURA are silent. To the extent that the other implementations in the Act or regulations made under it do not expressly reverse the effect of sections7A(3) and 7B(3) of the EU(W)A, this is problematic and uncertain, to say the least. (NB the general implementation provision in section 29 only applies to the extent that others do not, so it cannot be used as a ‘back door’ to give supremacy for all the Agreements’ domestic law implementations.) Perhaps the answer lies in recognising that, interesting as these questions are as a matter of theory, the hierarchical issue between “relevant separation agreement” and “relevant relationship agreement law” may not arise in practice, especially outside the domains covered by sections 22, 26 and 29. First, there may not be any other conflicts between the two sets of laws by the very nature of the distinct material covered by the Withdrawal Agreements, on the one hand, and the future relationship agreements, on the other – they may not overlap in other areas. Second, any conflicting “relevant separation agreement law” may have been expressly amended by the EURA (or secondary legislation under it) so that no conflict issues arise. Third, regulations to amend “relevant separation agreement law” may quickly be made so that any conflict does not arise for very long.

I am grateful to Professor Mark Elliott (St Catharine’s College, University of Cambridge) for discussions and his review of an earlier draft of this post. Any errors remain solely my own.

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