In this post Clíodhna Kelleher of Monckton Chambers discusses the EEA EFTA Separation Agreement, freedom of movement law in the EEA, and how the citizens’ rights provisions in the EEA EFTA Separation Agreement conform to and diverge from the equivalent provisions of the UK-EU Withdrawal Agreement.
At the beginning of 2020, the United Kingdom concluded three significant withdrawal agreements, albeit only one retained that descriptor as its name, the UK-EU Withdrawal Agreement (“WA”) itself. The others, the EEA EFTA Separation Agreement (“SA”) and the Swiss Citizens’ Rights Agreement (“SCRA”), have largely been relegated (at least in the commentary) to bit players in the scheme of the United Kingdom’s withdrawal from the European Union. That is largely justified given the greater scope and impact of the WA, which protects the position of approximately 5 million EU citizens in the United Kingdom and a million UK citizens in the EU27, by comparison to the approximately 100,000 individuals protected under the SA and SCRA. Nonetheless, 100,000 people is a significant cohort of individuals whose rights are protected under a complex new regime. The agreements are not identical, and there is a risk that analysis of the SA and SCRA will be subsumed into a single analysis of the WA.
This blog post examines EEA freedom of movement law (i.e., what the UK was separating “from” in the SA) and how this underlying body of law is amended and continued in the Separation Agreement and the UK implementing domestic law (the SCRA will have to continue to wait for its own dedicated analysis).
First, I explain what the EEA and EFTA are, and how EEA law relates to EU law. Second, I describe how freedom of movement operates in the EEA. Finally, I set out important points of comparison and distinction between the WA and the SA.
The EEA, EFTA and EEA law
EFTA is a trade organisation and free trade area consisting of Iceland, Liechtenstein, Norway and Switzerland. Professor Carl Baudenbacher describes and discusses EFTA in considerably more detail here. The EEA is a geographic area comprising the EU internal market and the territories of three of the EFTA states: Norway, Iceland and Liechtenstein. These are known as the EEA EFTA States. The fourth EFTA state, Switzerland, is not a member of the EEA and has concluded its own withdrawal agreement with the UK (the SCRA).
As a member of the EU, the UK was also a member of the EEA. Accordingly, withdrawal from the EU entailed withdrawal from the EEA. The SA was negotiated to ensure an orderly transition and to protect the rights of citizens of the EEA EFTA states in the UK, and vice versa.
Broadly, the EEA is an extended EU internal market, comprising the EU member states, in addition to Norway, Iceland and Liechtenstein. This extension was achieved by the entry into force of the EEA Agreement in 1994, the EEA analogue to the foundational EU treaties. The EEA Agreement is a commercial agreement and is underpinned by the same four freedoms as the EU, of goods, persons, services and capital. Critically, the EEA Agreement does not provide for the creation of a political union, so there is no parallel to Union citizenship in EEA law. EEA EFTA nationals are not “EEA EFTA citizens” in the way that nationals of EU Member States are also citizens of the EU: an Icelandic citizen is not an “EEA EFTA citizen” in the way that a French citizen is an EU citizen, for example. Otherwise (with certain significant exceptions) the EEA Agreement extends the reach of EU economic law into the EEA EFTA states, with the aim of creating an enlarged single market with a homogenous set of rules. Those rules are a variant of EU law known as EEA law.
The EEA Joint Committee, an EEA institution comprising of representatives of the EEA EFTA states and the EU, meets several times a year and decides whether newly adopted EU legislation should apply in the EEA, and whether any adaptations are required to the legislation before it applies in the EEA. If EU legislation is approved by the Joint Committee (including in any adapted form), the EEA Agreement is then modified, usually by the incorporation into Annex V of the EEA Agreement of the relevant legislation. One can check whether an EU act has been incorporated in EEA law using EEA-Lex. For example, searching for Directive 2004/38/EC (the Citizens’ Rights Directive) in EEA-Lex reveals that it has been incorporated into the EEA Agreement and is in force in the EEA, with a link to the relevant Joint Committee decision, including the amendments made to it for the EEA context. I return to the CRD below.
Free movement in EEA law
The free movement of persons within the EEA Agreement is underpinned by a variety of provisions which (as in EU law) gives rise to different rights depending on the individual circumstances of the person in question. Free movement of persons is underpinned by the main text of the EEA Agreement (in Articles 28, 31, 36) and by a considerable body of secondary EU legislation which has been incorporated into Annex V of the EEA Agreement.
The introduction of Union citizenship in 1992 and later of the CRD, which consolidated the bulk of the different acts applicable to free movement, was an important development in both EU and EEA law. Because there is no equivalent to EU citizenship in EEA law, this led to a natural divergence between the two systems. The CRD was incorporated into EEA law with a general reservation regarding citizenship and immigration policy. This is clear from the Joint Declaration issued when the CRD was incorporated in EEA law:
“The concept of Union Citizenship as introduced by the Treaty of Maastricht (now Articles 17 seq. EC Treaty) has no equivalent in the EEA Agreement. The incorporation of Directive 2004/38/EC into the EEA Agreement shall be without prejudice to the evaluation of the EEA relevance of future EU legislation as well as future case law of the European Court of Justice based on the concept of Union Citizenship. The EEA Agreement does not provide a legal basis for political rights of EEA nationals. The Contracting Parties agree that immigration policy is not covered by the EEA Agreement. Residence rights for third country nationals fall outside the scope of the Agreement with the exception of rights granted by the Directive to third country nationals who are family members of an EEA national exercising his or her right to free movement under the EEA Agreement as these rights are corollary to the right of free movement of EEA nationals…”
This is a curious form of reservation by comparison with other reservations or amendments in transposing EU law into EEA law. Ordinarily a reservation will carve out specific provisions within the EU legal act and clarify that those provisions will not apply in EEA law, and explain what, if anything, applies instead. For example, it is common (for obvious reasons) that references to the EU Treaties are replaced by references to the EEA Agreement, or that references to “general principles of Community law” are replaced with “general principles of EEA law”. Certain sentences are entirely deleted in the EEA version of an EU legal act. Cross-references to other parts of EU law, if they have not been transposed into EEA law, are removed. Here, instead of carving out specific provisions of the CRD which do not apply in the EEA and adopting the rest, the Joint Committee decision instead adopted the entire directive, with a blanket reservation as to the relevance of immigration and citizenship policy in the EEA. This leads to a strange situation in which, nominally, the entire directive applies in the EEA as it does in the EU, but in reality, because the central concept underlying the directive – citizenship – does not have an analogue in the EEA, the relevance, application and interpretation of the CRD may be very different in the EEA context. Unhelpfully, there is no definitive statement of which provisions of the CRD do not apply, or apply differently in the EEA, and authority on the point in limited. It is to be determined on a “case by case basis” (Case E-15/12 Wahl v Iceland, [75]).
This background is significant for understanding the SA, because both the WA and SA draw heavily on the CRD. However, the fact that the EEA and the EU are both applying and interpreting the CRD does not mean that it has the same meaning or effect in both contexts. The version of the CRD that underlies the SA is not the Union law “original” – it is the amended version incorporated in the EEA Agreement.
Comparing and distinguishing the citizens’ rights provisions of the WA and the SA
This remainder of this post compares and contrasts the citizens’ rights provisions of the WA and SA, along with certain significant “common provisions” in each of the Agreements.
Bearing the above context in mind, the WA and the SA are very similar documents. The article numbers almost track one another, marching together until Article 8 of the WA, which is a provision about access to electronic databases that is not mirrored in the SA, hence the divergence in article numbers from that point onwards. Both follow the same structure, with general provisions dealt with in Part 1, and the citizens’ rights provisions of each accommodated in Part 2.
Definitions (Art 2, WA and SA)
These articles provide for different definitions used in each of the Agreements. The interrelationship between the agreements is immediately clear obvious these articles, because certain definitions in the SA are provided by cross-reference to the WA.
In particular, “Union law” in the SA has the meaning given to it in Article 2(a) WA (Article 2(g) SA); and “transition period” in the SA has the meaning given to it in Articles 126 and 132 WA.
Methods and principles relating to the effect, the implementation and the application of the Agreements (Art 4 WA and SA)
Articles 4 of the WA and of the SA are critical provisions. They set out how the Agreements are to be interpreted, implemented domestically, and applied. These sections have a complex interaction with one another and with the domestic provisions that implement them in the UK.
The first notable difference between the Agreements is that the WA has direct effect (where the conditions for direct effect are met) by virtue of Article 4(1) WA, and the SA does not. The reason for this is straightforward: direct effect does not exist in EEA law. Instead, the parties to the SA are required to take “all necessary measures” to give effect to the provisions of the SA in the parties’ internal legal order through domestic legislation.
However, this technical distinction is essentially meaningless because of the manner in which the SA and WA have been implemented in domestic law. Section 7B EU(W)A 2018 provides for the general implementation of the SA and provides that any right, power, liability, obligation, remedy or procedure contained in the SA that would have direct effect if it were contained in the WA is to be recognised, available, enforced, allowed and followed in domestic law.
Secondly, the SA contains a weaker interpretative requirement in respect of domestic legislation implementing the SA than the corresponding structure in the WA. Art 4(2) SA requires each party’s judicial and administrative authorities to have “due regard” to the Agreement. This means, for example, that due regard is to be given to the SA in the interpretation of the sections of EU(WA)A 2020 which purport to give effect to Parts Two and Three SA. “Due regard” is not defined in the SA and it is not clear what standard of conformity is required by it. This can be contrasted with Art 4(1) WA which requires the provisions of the WA and of EU law made applicable by the WA to produce “the same legal effects” in the UK as they provide in the EU. This is bolstered by the requirement in Art 4(2) WA that the UK disapplies inconsistent domestic legislation and interprets references to EU law in accordance with the methods and general principles of EU law.
However, the divide between the Agreements is narrowed very substantially by Art 4(3) SA which requires Parts Two and Three SA to be interpreted in their implementation and application in accordance with the WA “in so far as they are identical in substance”. The SA does not explain what is meant by “identical in substance” but in all likelihood it is designed to cover a situation where the underlying right protected by the Agreements are the same, even though the articulation of each will differ, e.g., because in protecting the same right the WA refers to the Treaties, and the SA refers to the EEA Agreement.
A more complex question arises as to the interaction between Art 4(3) and the fact that the version of the CRD that underlies the SA is not the same as the version of the CRD that underlies the WA. Is the fact that an article of the SA and WA refer to the same provision of the CRD enough for those articles to be “identical in substance”, or is a more searching inquiry of the effect of the reservation as to citizenship in the EEA version of the CRD required to determine if the underlying right is, in fact, identical in substance to the position under the Union-law original CRD? It is difficult to attempt to answer this question given the tremendous variety in personal circumstances that can arise in respect of a beneficiary of the SA who may wish to rely on Article 4(3) SA. However, it is also difficult to imagine that there will be much appetite in Government (or anywhere else) to force detailed distinctions between the SA and WA given the enormous consequences that would have for the complexity of interpreting the Agreements and for the bureaucracy involved in considering individual cases.
In domestic law, section 7C(1)(b) EU(W)A 2018 provides that questions as to the validity, meaning or effect of the Agreements is to be decided having regard (among other things) to the desirability of ensuring that there is a consistent approach to the Agreements insofar as one agreement makes provision which “corresponds” to provision in another. Although this by no means requires that parallel provisions are interpreted identically, the wording here is quite loose: the bulk of the SA “corresponds” to the WA, in one sense, in that most of the provisions in the SA have an analogue in the WA. In practical terms this is likely to bolster the protections in the SA from an interpretation and implementation standpoint, if they are to be assessed broadly in line with equivalent protections in the WA.
One particularly complex question under this subheading is: what is the status of the Charter in the interpretation of the SA? Those with an interest in the interpretation and implementation of the WA will be aware that the Charter has found its way into the interpretation of the WA under Article 4 WA in SSWP v AT (Aire Centre and IMA Intervening) [2022] UKUT 330 (AAC). This is, in essence, because Article 4(3) WA requires that provisions of the WA that refer to Union law are to be “… interpreted and applied in accordance with the methods and general principles of Union law”, which includes the Charter.
The SA does not require its provisions to be interpreted and applied in accordance with the methods and general principles of Union law, or even of EEA law (and in any event, the Charter does not and has never formed part of EEA law). As explained above, Art 4(3) of the SA instead requires a conformity in approach between Parts Two and Three of the SA and of the WA where they are identical in substance. One possible answer is that the Charter should find its way into the SA through a combination of Article 4(3) SA and Article 4(3) WA and that beneficiaries of the SA should piggy-back on any additional protections conferred on beneficiaries of the WA by an application of the Charter, because their right under the SA will fall to be interpreted in conformity with the equivalent right under the WA. However, it may seem strange that an EEA EFTA national with e.g., pre-settled status would benefit from the application of the Charter when she would not benefit from the Charter if she were exercising standard EEA free movement rights instead. On the other hand, if the Charter does not apply to the interpretation of the SA, it will generate inconsistent outcomes as between beneficiaries of the WA and of the SA in circumstances where the scheme of the Agreements and the domestic implementing legislation pushes strongly in the direction of a consistent interpretation wherever it can be achieved.
This is likely to be further complicated by the fact that the circumstances in which the Charter may be relevant to the interpretation of the WA are likely to be incredibly varied and inevitably sensitive to their facts, and if Article 4(3) is to be the “conduit pipe” by which the Charter finds its way into the SA (to borrow a phrase), the interpretation of the WA will be a prior question in litigation about the SA. But this may be the inevitable consequence of the tight enmeshment of the Agreements.
Moreover, as permission to appeal was granted by the UT to the Secretary of State for Work and Pensions in AT, the underlying analysis concerning the applicability of the Charter may shift again in the near future.
References to Union law / EEA Agreement (Art 6 WA and SA)
Article 6 of each Agreement refers back to the “parent” body of law for each Agreement – Union law in the case of the WA, and the EEA Agreement in the case of the SA. Art 6 SA specifies that references to Union law within the SA are references to Union law as incorporated in the EEA Agreement and as applicable on the last day of the transition period. This is important because, as explained above, EU law can be modified before being incorporated into the EEA Agreement. It is important to check whether a particular provision of Union law referred to in the SA was modified before becoming part of EEA law, as it is the modified version that applies in the context of the SA, and not the Union-law “original”.
Status and changes (Art 17 WA, Art 16 SA)
These articles are substantively identical, but there is a difference in wording between the two. The WA provides that “[t]he right… to rely directly on this Part shall not be affected when they change status…” whereas the SA provides “[t]he right… to avail themselves of the rights set out in this Part shall not be affected when they change status…”. This, again, is ascribable to the fact that the relevant provisions of the WA have direct effect, and the relevant portions of the SA do not (at least on the face of the SA itself).
Persons covered (Art 30 WA, Art 29 SA)
Arts 30 WA and 29 SA are substantively identical except that provision is made under Art 30(1)(g) WA for “nationals of third countries, as well as members of their families and survivors, who are in one of the situations described in points (a) to (e), provided that they fulfil the conditions of Council Regulation (EC) No 859/2003”.
This does not appear in the SA. Regulation 859/2003 is a short regulation which extended the EU social security co-ordination rules to certain third-country nationals who fell outside of the scope of the EU social security co-ordination rule solely by virtue of their nationality. This regulation was not adopted in the EEA Agreement, and so it is not protected or continued under the SA either.
Social security coordination rules (Art 31 WA, Art 30 SA)
The first three paragraphs of these articles are essentially, but not quite identical. Art 31 WA refers to Art 48 TFEU, and Art 30 SA refers to Art 29 of the EEA Agreement. These articles are not identical but aim to achieve the same objective of ensuring that member states secure aggregation of periods for the accumulation of benefit entitlements, and the payment of benefits to persons resident in the EU or EEA-EFTA states. Art 29 of the EEA Agreement is significantly shorter than the corresponding provision in the TFEU, as it is intended to implement the EU rules on social security coordination, whereas Art 48 TFEU also provides for the mechanisms by which those rules are made.
In addition, Art 31(3) WA is not mirrored in the SA. This provides for a specific interpretation of the rules in the Title for nationals of third countries who fall within regulation 859/2003 (i.e., those who are in scope by virtue of Art 30(1)(g) WA).
Development of law and adaptations of Union acts / adaptations of acts incorporated into and in force under the EEA Agreement
These articles are closely linked, but do not mirror one another. They provide for a mechanism whereby the EU legislation underlying Title III can be updated and remain binding on the counterparties to each Agreement. The mechanism in the SA is parasitic on the mechanism in the WA in that the necessary realignment must occur using the mechanism set out in the WA, following which the relevant Annex to the SA will be revised.
Dispute settlement (Arts 167 – 181 WA, Arts 67 – 68 SA)
Title III of Part Six WA provides for dispute settlement mechanisms. In overview, it provides that the UK and EU will attempt to resolve disputes through negotiation and may refer disputes to arbitration. The WA provides that this mechanism of dispute resolution between the counterparties is an exclusive one (Art 168).
The SA does not contain any mechanism for arbitration. It foresees disputes being resolved through the Joint Committee. It is likely to leave significant scope for domestic litigation, which may in turn be complicated by the fact that disputes may turn substantially on the proper interpretation of EEA law (and potentially of the WA).
Preliminary references under the WA
The WA provides for preliminary references to be made to the CJEU in relation to Part Two of the WA in respect of disputes commencing at first instance within 8 years from the end of the transition period. If a reference is sought, the CJEU’s rulings will apply as if the UK is a Member State (Art 158(2)). My colleague Alexandra Littlewood has discussed the CJEU’s jurisdiction to give preliminary rulings under the WA in greater detail here.
There is no equivalent provision under the SA. This is an interesting distinction, as the EFTA court does operate a system of preliminary references to resolve questions of EEA law in much the same way as the CJEU. However, this may not matter a great deal in the grand scheme of things because of the close relationship between the SA and WA. If a question arises as to the interpretation of Part Two of the SA, the resolution of that question is likely to depend on the proper interpretation of Part Two of the WA because of Article 4(3) SA, which requires a conformity in approach to the interpretation of Parts Two of the WA and the SA. This gives rise to the potential for a preliminary ruling from the CJEU on the interpretation of the WA, which will be highly significant as to the interpretation of the SA.
Conclusion
Here ends the whistlestop tour of the SA. Plenty of questions remain: what does it mean for a provision of the SA to be “identical in substance” to a provision of the WA? Does Article 4(3) have the effect of importing the Charter as a tool for interpreting the SA? It is tempting to say that these are questions for consideration in individual cases where the facts of a person’s circumstances can illuminate how different approaches to these questions will alter the outcome for a beneficiary of the SA. However, it is difficult to ignore the pragmatic reality that these questions may never be reached if analysis of the SA is subsumed into an analysis of the WA. For beneficiaries of the SA (if not for purist legal commentators) this may also be a welcome approach to the SA, as it is likely to result in a broader and greater protection of their rights and the comfort blanket of the application of familiar EU law principles.
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