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EU-UK Trade and Cooperation Agreement
On 30 December 2020, the European Union and the United Kingdom of Great Britain and Northern Ireland signed a Trade and Cooperation Agreement, which prevented UK’s exit from the EU without an agreement defining their future relations, i.e. the “wild Brexit”. As of 1 January 2021, the EU and the UK thus officially represent two separate regulatory and legal entities. What are the implications of this new arrangement?
The extensive agreement involving almost 1,500 pages primarily governs the trade relations between the EU and the UK, focusing mainly on trade, transport, fisheries and services. In many aspects, the agreement does not set any new standards but is inspired by the international regulations already implemented by the World Trade Organisation (GATT 1994) or by the UN regulations.
The agreement can be considered a basis for gradual building of new relations between the UK and the EU.
From legal perspective, we consider it important to point out several areas that are regulated, or omitted, by the agreement:
- RECOGNITION AND EXECUTION OF COURT RULINGS
The agreement does not regulate the issue of recognition and execution of court rulings, as the UK applied for accession to the Lugano Agreement on 8 April 2020, which shall generally ensure the same standard for the recognition and execution of court rulings that is known within the EU, or among members of the European Free Trade Association (i.e. Liechtenstein, Switzerland, Norway and Iceland).
However, to date the UK has not officially acceded to the Lugano Agreement and the execution of court rulings will therefore be governed by general rules of international private law for the time being. - DETERMINATION OF GOVERNING LAW
The UK incorporated the provisions of European regulations Rome I (law applicable to contractual obligations) and Rome II (law applicable to non-contractual obligations) in its national legislation. These rules thus remain applicable for both parties and will continue to apply even after 1 January 2021. Furthermore, the possibility for businesses to agree on the law governing their contractual relations between themselves has been maintained as well. - PERSONAL DATA PROTECTION
Until 1 July 2021, EU personal data protection regulations, i.e. namely the GDPR, will apply to the UK.
In the upcoming weeks, decision of the European Commission regarding the adoption of adequacy decision, i.e. decision that will confirm the appropriate level of personal data protection in the UK as a whole or only in a certain sector, can be expected in relation to the UK. Based on this decision, personal data transfer to the UK could continue even after 1 July 2021. British government has already confirmed that it will maintain the European standard for personal data protection at least until 2024. - PUBLIC PROCUREMENT
The agreement also concerns public procurement as a sector that is important for businesses.
Pursuant to the agreement, public contract announcements should be made accessible electronically free of charge and the contracting authorities should not request that the prior experience necessary for the participation in a public contract be acquired on the territory of the relevant state. The aim of this regulation is predominantly to prevent potential discrimination. - DIGITAL TRADING
Good news for businesses is that the EU and the UK have confirmed that contracts may continue to be concluded electronically and none of the parties shall create any legal obstacles for the use of electronic contracts leading to the deprivation of such contracts’ legal effect and validity in the future.
Businesses will therefore not need to make administrative changes of or adjustments to the implemented contractual processes.
