Brexit and Financial Services
It is generally accepted that the UK-EU Trade and Cooperation Agreement (TCA), which with associated documents established the basis of the future and economic and security relationship between the UK and the EU following the end of the post-Brexit transition period on 31st December 2021, did not do very much for financial services. There is a separate section 5 on financial services in Title II (Services and Investment) of Heading One (Trade) to Part Two (Trade, Transport, Fisheries and other Arrangements) of the TCA but this largely contains only very general commitments on the two sides to work together in the future regulation of financial services.
A Joint Declaration on Financial Services between the two sides, which accompanied the TCA, committed both sides (probably not in a legally-binding way) to try and agree a Memorandum of Understanding, by March 2021, establishing the framework for future co-operation between them in the context of structured regulatory cooperation on financial services, “with the aim of establishing a durable and stable relationship between autonomous jurisdictions”. The Joint Declaration ends up by saying that the two sides “will discuss, inter alia, how to move forward on both sides with equivalence determinations between the [EU] and the [UK], without prejudice to the unilateral and autonomous decision-making process of each side”.
The lack of detailed agreement between the UK and EU on the future of financial services regulation and mutual recognition could be very damaging to the interests of both sides and the authorities in both jurisdictions are beginning to try and do something about this.
On 4th January 2021, the UK’s Financial Conduct Authority (FCA) published the texts of Memorandums of Understanding (MoUs) that it has agreed with European authorities in the areas of securities, insurance and pensions, and banking:-
- A multilateral MoU concerning consultation, co-operation and the exchange of information between each EEA national competent authority (NCA) and the FCA; and
- A MoU concerning consultation, co-operation and the exchange of information between the EU’s European Securities and Markets Authority (ESMA) and the FCA.
On the same date, ESMA published the texts of MoUs that it had agreed with the Bank of England on:-
- Arrangements for co-operation on the monitoring and supervision of central counterparties (CCPs) established in the UK; and
- Monitoring the ongoing compliance with recognition conditions by central securities depositories (CSDs) established in the UK.
These are technical developments but give reason for hope that both sides will find a way to ensure the continued flow of financial services business between the UK and the EU and more widely between the UK and the EEA.
Brexit and Participation in EU Programmes
Part Five of the UK-EU Trade and Cooperation Agreement of December 2020 is headed “Participation in Union Programmes, Sound Financial Management and Financial Provisions” and deals with the basis on which the UK is eligible to participate in agreed EU research, scientific and educational programmes. This is seen by many as very important for the future of both the UK and the EU.
Perhaps in a way just as important is the Joint UK–EU Declaration on Participation in Union Programmes and Access to Programme Services, which was issued at the same time as the TCA, and whose first paragraph describes its purpose very clearly:-
“The Parties [ie the UK and the EU] recognise the mutual benefit in cooperation in areas of shared interest, such as science, research and innovation, nuclear research and space. To encourage future cooperation in these areas, it is the Parties’ intention to establish a formal basis for future cooperation in the form of the participation of the United Kingdom in the corresponding Union programmes under fair and appropriate conditions and, where appropriate, in the form of access to certain services provided under Union programmes.”
The Joint Declaration attaches two draft Protocols as the basis for agreement on future UK participation in or access to particular EU Programmes and, although the Joint Declaration may well not be legally binding as such, many in the research, scientific and education communities hope that future cooperation between the UK and the EU in the areas of mutual interest covered by the named EU programmes and more generally will indeed be possible.
Brexit and Nutrition Law
On 14th January 2021, the UK Government’s Department of Health & Social Care (DHSC) published updated guidance in the form of a “Nutrition legislation information sheet” on nutrition legislation affecting the sale of food and drinks in the UK following the end of the post-Brexit transition period on 31st December 2020.
The information sheet explains how certain existing applicable EU rules (such as Regulation (EU) No 1169/2011 on the provision of food information to consumers and Regulation (EC) 1925/2006 on the addition of vitamins and minerals and of certain other substances to food) have essentially been retained as part of UK law on nutrition issues following the post-Brexit transition period but that certain other UK rules and recommendations also apply.
The information sheet mentions various UK Governmental, Local Governmental Departments and other public bodies which are involved in policing nutrition law on labelling and other nutrition matters in the UK. These include local authority environmental health and trading standards departments, the DHSC itself, the Food Standards Agency, the Department for Environment, Food and Rural Affairs (Defra) and the Medicine and the Healthcare products Regulatory Agency. A whole plethora of regulators and no single overarching UK body post–Brexit!
Northern Ireland remains subject directly to many of the EU’s nutrition law labelling and other rules directly in view of its unusual hybrid status as being subject to both UK and EU laws in many respects under the terms of the Ireland/ Northern Ireland Protocol to the UK-EU Withdrawal Agreement of October 2019 but interestingly Great Britain also remains subject to many of these rules through the incorporation of retained EU law into UK domestic law.
This highly regulated area of food and drinks nutrition law is, at least, one area of law where it seems that both sides see the wisdom of working together, notwithstanding Brexit!
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