Dec 30 2020

Trade and Cooperation Agreement Reached

European Union, United Kingdom

At a Glance

  • The United Kingdom and the European Commission have reached an agreement on the terms of their cooperation following the end of the Brexit transition period on December 31, 2020.

  • The EU-UK Trade and Cooperation Agreement includes a limited framework for business mobility between the United Kingdom and EU Member States, specifically around business travel and intracompany transfers.

  • The impact of the Agreement will depend on how the United Kingdom and each EU Member State adheres to the Free Trade Agreement in their national rules, and also on the existing national legislation in EU Member States.

  • In principle, the Agreement could provide UK nationals more favorable treatment than other non-EU citizens, especially for short-term business visitors and contractual service suppliers.

  • Both parties must now sign and ratify the Agreement for its full implementation.

The situation

On December 24, 2020, the United Kingdom and the European Commission settled on the EU-UK Trade and Cooperation Agreement. The includes a limited framework for business mobility between the United Kingdom and EU Member States, specifically around business travel and intracompany transfers after the end of the Brexit transition period on December 31, 2020.

The Agreement has three main parts:

  • Free Trade Agreement. This governs, among other things, the movement of people in the context of providing services, recognition of professional qualifications, and social security coordination.

  • Partnership for citizens' security. This section governs law enforcement and judicial cooperation in criminal and civil law matters.

  • Agreement on governance. This section establishes a Joint Partnership Council to ensure the Agreement is properly applied and interpreted. This is meant to give legal certainty to businesses, consumers and citizens.

A closer look – Free Trade Agreement

  • Movement of people/provision of services. The Agreement states that the free movement of people, goods and services will be replaced by more limited provisions for temporary movement rights based on the category of travelers:

    • Business travelers

      • In the European Union: The Agreement states that business visitors will be allowed in the European Union for up to 90 days in any 180-day period in the Schengen Area. The Agreement provides a list of activities that, under certain conditions, can be performed by UK citizens while in the European Union without work authorization.

      • In the United Kingdom: The Agreement states as standard terms that EU business visitors to the United Kingdom will be subject to stays of 90 days in a 180-day period, however local law provisions permitting longer stays for business trips will remain unless and until changed.  

      • Impact. The Free Trade Agreement provides a harmonised list of work permit-exempt business activities that goes further than the exemptions available in most EU national legislations, subject to reservations by some of the EU countries. The impact will depend on the adherence of EU countries and the United Kingdom to this aspect of the Free Trade Agreement.

         

    • Business travel for investment purposes

      • Impact in the European Union. The Agreement provides a work permit exemption for business travel for investment purposes for up to 90 days in a 180-day period. This would create a new type of exempt travel in those EU countries that do not already provide such an exemption in their national legislation.

      • Impact in the United Kingdom. This means that the provision enables EU nationals to visit the United Kingdom to establish presence as supplementary to the existing general business provisions in UK immigration legislation. 

         

    • Contractual Service Suppliers are individuals employed by a company in the United Kingdom/European Union that is not established in the territory of the other area, which has signed a service contract for up to 12 months for a consumer which requires temporary presence of its employees in either area.

      • Impact in the European Union. The Agreement states that no quota or economic needs tests may be imposed for this type of work, however, implementation will not be uniform across the European Union because of reservations by some EU countries, depending on the nature of the service provision.

      • Impact in the United Kingdom. The provision provides a scope for certain sector roles when the existing ICT route in the UK immigration framework may not be appropriate. 

         

    • Independent Professionals are individuals engaged in providing a service in the United Kingdom/European Union who are self-employed in the United Kingdom/European Union for up to 12 months.  They must have at least six years professional experience and relevant qualifications.

      • Impact in the European Union. The Agreement states that no quota or economic needs tests may be imposed for this type of work. However, implementation will not be uniform across the European Union because of reservations by some EU countries, depending on the nature of the service provision.

      • Impact in the United Kingdom. There is not a defined route for self- employed professionals in the United Kingdom and this will provide a scope in certain sectors for the provision of some temporary services.

    • Intra-corporate transferees are managers, specialists or graduate trainees transferred from one group entity established in the United Kingdom/European Union to another group entity established in the United Kingdom/European Union (for a stay of up to three years for managers and specialists and one year for graduate trainees).

      • Impact in the United Kingdom. The Agreement guarantees that ICTs can spend three years in the United Kingdom, but the United Kingdom’s more generous allowance of five years for most ICTs will remain, unless the law is amended. The applicability of certain fees associated to an application may also be reviewed.

      • Impact in the European Union. These provisions are aligned with the EU Intracompany Transferee (ICT) Directive, and as such, UK nationals will qualify for EU ICT permits.

    • Other information/national application.

      • Additional eligibility conditions exist for these categories, such as qualifications, and are detailed in the Agreement.

      • Each EU country has made reservations for these provisions per category and sometimes, sector. This will lead to different implementation in each EU country.

         

    • Recognition of professional qualifications. The European Union and the United Kingdom may request that individuals possess the professional qualifications required in their territory for their specific sector of activity. The Agreement creates a framework for the individual countries to develop and provide joint recommendations on the recognition of professional qualifications, in collaboration with the Partnership Council that is charged with governance of the Agreement.

    • Social security legislation for cross-border work between the United Kingdom and the European Union.

      • The Agreement sets out rules that are similar to the EU Social Security Regulations, whereby only one national social security scheme applies to EU and UK nationals simultaneously working in one or more EU Member State and the United Kingdom.

      • The Agreement also provides transitional measures for seconded employees/self-employed between the United Kingdom and EU Member States who are in situations that existed before the entry into force of the Free Trade Agreement. Such workers can, under certain conditions, remain under their home social security scheme (with an exemption from the social security of the temporary work state), for up to maximum 24 months. These transitional measures for seconded workers only apply to EU Member States that have notified use of the measures to the European Union. Importantly, each EU Member State may bilaterally agree with the United Kingdom on different applicable provisions.

 

Impact

While this Agreement does not create significant mobility provisions to replace rights under freedom of movement, it provides certainty and clarity for businesses on both the UK and EU positions from January 1, 2021 and allows better planning and implementation of mobility strategies after the end of free movement.

The practical impact of the Agreement depends on existing national legislation in the UK and the EU Member States, and each country’s adherence to the Free Trade Agreement. In principle, the Agreement could provide UK nationals more favorable treatment in the EU than other third country nationals, especially for short-term business visitors.

From a UK perspective, domestic policy is already more generous than the bare minimum commitments in the Free Trade Agreement.  It appears that the Home Office will need to change some aspects of the Immigration Rules to accommodate newer (albeit niche) provisions, for instance on Contractual Service Suppliers.  Beyond that, Fragomen does not expect the UK authorities to tighten the rules in order to bring them in line with less generous terms in the Agreement.

Looking ahead

This Agreement is expected to enter into force provisionally on January 1, 2021 until February 28, 2021, when formal ratification would be complete. Both parties will need to sign and ratify the Agreement for its full implementation:

  • From the EU side, the European Parliament will have to give its consent (expected in February or March 2021) to the Trade and Cooperation Agreement and the European Council must adopt the decision on the conclusion of the Agreement. Despite these remaining steps, no major surprises are expected in the terms of the final deal.
  • In the United Kingdom, the Parliament will debate and vote on the deal on December 30.



For more information, please visit Fragomen's dedicated Brexit site, which contains news, FAQs, and analysis/commentary in the form of blogs, videos, webcasts and events. 

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected] or [email protected].