Prior to the next round of Brexit negotiations, on 13 July 2017 the Government published a position paper on the privileges and immunities enjoyed by the EU institutions, agencies and representatives in the UK in the context of Brexit.
The paper recognises that, even after the UK's withdrawal from the EU scheduled for 2019, some EU institutions and agencies will remain in the UK. For some this will be temporary, while they wind down their activities. But the paper also acknowledges the expectation of a continued future EU presence in the UK, including for example in the form of an EU delegation.
Privileges and immunities which currently exist under EU law (namely, Protocol 7 to the Treaty on the Functioning of the European Union), will no longer apply after UK exit when the UK is no longer party to the EU treaties. With this in mind – and consistent with the UK's desire to enter a "new, deep and special partnership" with the EU – the Government recognises that some privileges and immunities will need to be granted to the EU to facilitate that partnership, and expects that this should be reciprocal, covering also UK activity within the EU.
The UK recognises that, in the context of an overall settlement on withdrawal, transitional arrangements as to privileges and immunities will be required for a period after UK exit from the EU, in particular in respect of the EU's property, funds, assets and operations continuing in the UK after the withdrawal date.
The paper acknowledges that the transitional arrangements may endure for different periods depending on the particular EU assets or agency. It is noted, for example, that the European Investment Bank (EIB) (to which the UK contributed more than €39 billion) may require a special approach in the context of the overall settlement regarding the EIB itself.
The Government wishes the UK's withdrawal to be the beginning of a new partnership with the EU. Therefore, and consistent with the premise of granting privileges and immunities under UK law resting on "functional need", the Government expects to negotiate a new "comprehensive set of privileges and immunities to facilitate that partnership", allowing the EU to maintain a presence in the UK, including an EU delegation. The reference to reciprocity with regard to UK activity within the EU also suggests a continuing UK presence, although no further details are given in the paper.
The UK's recognition that privileges and immunities will need to be granted to the EU post-Brexit, both in a transitional and permanent sense, is both pragmatic and consistent with international law. Whilst two significant UK-based EU agencies – the European Medicines Agency and the European Banking Authority – are to relocate from London to another EU Member State, the process is anticipated to take some time and, of course, the EU has a considerable organisational presence in the UK beyond these two agencies. A retraction or relocation of the EU's agencies, representatives, bodies and institutions will inevitably extend beyond 2019. Furthermore, a "new, deep and special partnership" with the EU envisages an ongoing EU presence in the UK, and vice-versa. As the publication of the paper acknowledges, clarity on the scope and extent of the reciprocal privileges and immunities will be an important feature both in the short term, during the transitional period after Brexit, and beyond.
For more information, please contact Andrew Cannon, Partner, Hannah Ambrose, Professional Support Consultant or your usual Herbert Smith Freehills contact.