The law concerning the extension of the transition period

In this post, Jack Williams of Monckton Chambers explores the legal position concerning any extension of the transition period under the Withdrawal Agreement between the UK and EU under both international and domestic law.

Today (05/06/2020), Mr Barnier has stated that “there have been no significant areas of progress” on the Future Relationship Agreement negotiations between the UK and EU. He has re-iterated, however, that the EU has “always been open to the possibility of an extension of one or two years … and our door remains open”. This follows calls from the UK devolved administrations earlier in the week to extend the transition period in light of the lack of developments and the covid-19 pandemic: the Northern Ireland Assembly voted in favour of extending the transition period, and the Scottish Government published a paper advocating the case for extending the period. The UK Government’s position has been to reject the possibility of a transition extension. Whilst it is not the place of this blog post to examine the policy merits or demerits of extending the transition, in light of these developments it is nevertheless interesting to explore the legalities of extending the transition period.

The transition period

Pursuant to Article 126 of the Withdrawal Agreement, there shall be a transition period. During that period, “Union law shall be applicable to and in the United Kingdom” (Article 127(1)). The headline effect of this, as stated in Article 127(3) of the Withdrawal Agreement, is that, subject to some minor modifications and exceptions, EU law “shall produce in and in respect of the [UK] the same legal effects as those which it produces within the [EU]”. In essence, whilst the UK is no longer an EU member state (and is thus not represented or involved in the EU legislative or administrative processes as it was as a member state), the UK is a rule-taker and, for all intents and purposes, in substance treated as a member state during the transition period.  

Extending the transition period – international law

As a matter of international law (the Withdrawal Agreement between the UK and EU), there are three matters worth highlighting.

First, as it stands, the transition period is due to expire on 31 December 2020 (Article 126 of the Withdrawal Agreement). That period can, however, be extended – on a single occasion – for a period “for up to 1 or 2 years” (Article 132 of the Withdrawal Agreement). Whilst the wording of that provision is slightly curious – a period “up to 2 years” would logically already encompass a period of up to a year without the need for stating it – the effect of this, contrary to Mr Barnier’s quote at the beginning of this blog, would appear to allow for extensions of any amount of months below two years, rather than only allowing an extension of one or two years. The “up to” wording would otherwise be redundant.

Second, the decision to extend the transition period is a joint one between the UK and EU, to be adopted by a single decision by the Joint Committee before 1 July 2020. That means that there are only a few weeks to extend the transition period if required, otherwise “no deal” is back on the table for 1 January 2021 if the Future Relationship Agreements cannot be agreed and implemented before then. The Joint Committee is a body created by the Withdrawal Agreement consisting of representatives of the EU and the UK and acting by mutual consent:  see Articles 164 – 166 of the Withdrawal Agreement.

Third, an extended transition does not come without a price. The UK will have to contribute to the Union budget until the end of the transition period (Article 132 (2)(d) and (3)(a) of the Withdrawal Agreement) and there are a number of derogations from Article 127 of the Withdrawal Agreement, such that the UK does not benefit from certain extensions of EU programmes as under the existing arrangements and is not subject to certain EU law obligations as at present. The transition arrangements are therefore not identical.

Extending the transition period – domestic law

As is well-known, the UK domestic process and legal requirements for the UK’s withdrawal from the EU were not uncontroversial: see, for example, here about the Miller litigation, ultimately necessitating an Act of Parliament to trigger the Article 50 TEU process. As a matter of domestic law, the same hurdle – an Act of Parliament – would be required to extend the transition. This is a consequence of (at least) two provisions:

(1) Section 15A of the EU (Withdrawal) Act 2018 (added by section 33 of the EU (Withdrawal Agreement) Act 2020) prohibits UK Ministers from agreeing to an extension of the transition period in the Joint Committee (thus meaning that the single decision referred to in Article 132 of the Withdrawal Agreement cannot take place as it requires mutual consent). Therefore, the UK Parliament would first have to ensure that section 15A of the Act was repealed in domestic law before a Minister could agree to extend the transition (though this does not prevent the UK Government from discussing or proposing such an extension). In passing, it is also worth noting that section 15C of the EU (Withdrawal) Act 2018 prohibits UK Ministers from agreeing to use the written procedure in the Joint Committee. This would require the Joint Committee to take any decision to extend the transition period either in person or by teleconference.  

(2) Section 39 of the EU (Withdrawal Agreement) Act 2020 defines “IP completion day” as “31 December 2020 at 11.00 p.m (and see subsections (2) to (5))”. “IP completion day” means Implementation Period (i.e. the transition period), and has been inserted in the EU (Withdrawal) Act 2018 in various places as a replacement for “exit day” (which has already taken place  — at the end of January 2020 when the UK left the EU)) to trigger various changes as at that date.  Subsections (2) – (4) only provide that the definition of “IP completion day” (i.e. the date) can be changed for only one narrow purpose, namely if the EU changes its laws about daylight saving time before the end of 2020. Parliament would therefore need to pass a change to facilitate any change to IP completion day if the transition were to be extended.

Summary

As stated at the outset, the merits or demerits of extending the transition are for others to determine – reasonable minds will likely disagree as to whether retaining the current period is a beneficial negotiation tactic to ‘keep the pressure on’, or whether a deal is negotiable in the time available before the expiration of the current arrangements in any event. What is clear as a matter of law, however, is that time is running out for securing such an extension if one were needed: as a matter of international law, the UK-EU Joint Committee has to take a decision by the end of the month and, as a matter of domestic law, an Act of Parliament would be required.