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Oct 17, 2019

Blacklines Comparison of the New UK/EU Withdrawal Agreement Terms

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Today, the EU and U.K. in principle agreed new terms for the withdrawal agreement giving effect to the U.K.’s exit from the European Union. These include a revised political declaration and protocol concerning Northern Ireland replacing the controversial backstop. An amended unilateral declaration on consent in Northern Ireland by the U.K. was also published. Attached to this client note are comparison documents showing the changes from the previous set of documents.

As regards Northern Ireland, a new arrangement is proposed under which it will remain part of the U.K.’s customs territory but would also remain in the EU’s single market for purposes of goods—but not services. Critically, and unlike the former “backstop”, these arrangements will be terminable upon 2 to 4 years’ notice at the request of the Northern Ireland assembly. Fewer impingements on the United Kingdom’s sovereignty exist, although there is still significant European Commission and European Court of Justice control of State aid. A new list of EU regulations concerning goods which will be applicable in Northern Ireland forms a new section of the withdrawal agreement. Northern Ireland will also be subject to the minimum Value Added Tax (VAT) rates of the EU for goods only, with new procedures for this to be charged or refunded depending on whether goods are for EU export. The political declaration remains fairly similar, with notably no progress made on financial services equivalency (or similar concepts such as mutual recognition). New provisions providing for greater alignment on environmental and social matters and on state aid and restrictions on the role of the European Court of Justice have been added – although these do not build on the single customs territory and leave more room for governance to be consistent with U.K. sovereignty. We hope that these blacklines should help our clients, lawyers, politicians and the public to understand better the changes that have been proposed.

Appendix 1 – Political Declaration

Appendix 2 – Northern Ireland Protocol

Appendix 3 – U.K. Unilateral Declaration on Northern Ireland Protocol

 

Disclaimer

Shearman & Sterling LLP has created the comparisons attached to this client note from materials made available by the U.K. Government Department for Exiting the European Union.

These materials aim to show the changes the U.K. Government has agreed to make to: (i) the Protocol on Northern Ireland to the Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community; (ii) the Political Declaration setting out the Framework for the Future Relationship between the European Union and the United Kingdom and (iii) the Declaration by Her Majesty’s Government of the United Kingdom of Great Britain and Northern Ireland concerning the operation of the ‘Democratic consent in Northern Ireland’ provision of the Protocol on Ireland/Northern Ireland.

These materials:

  • are of a general nature only and are not intended to address the specific circumstances of any particular individual or entity; and
  • do not constitute professional or legal advice (if you need specific advice, you should always consult a suitably qualified professional).

Shearman & Sterling LLP accepts no responsibility or liability whatsoever with regard to these materials and makes no representation as to the fitness for purpose or accuracy of the information provided in these materials. We undertake no duty of care to any user of these materials. Any person wishing to understand the legislative position or proposed legislative position should consult primary sources.

This disclaimer is not intended to limit the liability of Shearman & Sterling LLP in contravention of any requirements laid down in U.K. or other laws nor to exclude its liability for matters which may not be excluded under U.K. or other laws.

Authors and Contributors

Thomas Donegan

Partner

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5566

+44 20 7655 5566

London

Barnabas Reynolds

Partner

Financial Institutions Advisory & Financial Regulatory

+44 20 7655 5528

+44 20 7655 5528

London

James Webber

Partner

Antitrust

+44 20 7655 5691

+44 20 7655 5691

+32 2 500 9871

+32 2 500 9871

London