Source: EURLEX
Language: en
Format: md

**Council of the**
**European Union**

**Interinstitutional File:**

**2020/0381(NLE)**

**PROPOSAL**

**Brussels, 27 December 2020**
**(OR. en)**

**14335/1/20**
**REV 1**

**UK 135**

From: Secretary-General of the European Commission, signed by Ms Martine
DEPREZ, Director

To: Mr Jeppe TRANHOLM-MIKKELSEN, Secretary-General of the Council
of the European Union

No. Cion doc.: COM(2020) 855 final/2

Subject: Proposal for a COUNCIL DECISION on the signing, on behalf of the
Union, and on provisional application of the Trade and Cooperation
Agreement between the European Union and the European Atomic
Energy Community, of the one part, and the United Kingdom of Great
Britain and Northern Ireland, of the other part, and of the Agreement
between the European Union and the United Kingdom of Great Britain
and Northern Ireland concerning security procedures for exchanging
and protecting classified information

Delegations will find attached document COM(2020) 855 final/2.

Encl.: COM(2020) 855 final/2

14335/1/20 REV 1

## UKTF EN

EUROPEAN

COMMISSION

Brussels, 26.12.2020
COM(2020) 855 final/2

2020/0381 (NLE)

COM(2020) 855 final of 25.12.2020 downgraded on 26.12.2020

Proposal for a

**COUNCIL DECISION**

**on the signing, on behalf of the Union, and on provisional application of the Trade and**
**Cooperation Agreement between the European Union and the European Atomic Energy**

**Community, of the one part, and the United Kingdom of Great Britain and Northern**
**Ireland, of the other part, and of the Agreement between the European Union and the**
**United Kingdom of Great Britain and Northern Ireland concerning security procedures**

**for exchanging and protecting classified information**

# **EN EN**

**EXPLANATORY MEMORANDUM**

**1.** **CONTEXT** **OF** **THE** **PROPOSAL**

        - **Reasons for and objectives of the proposal**

On 29 March 2017, the United Kingdom notified the European Council
pursuant to Article 50 of the Treaty on European Union (‘TEU’) of its intention
to withdraw from the European Union and from the European Atomic Energy
Community.

On 30 January 2020, following the consent of the European Parliament, the
Council adopted Decision (EU) 2020/135 on the conclusion of 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 (the ‘Withdrawal Agreement’). [1] The Withdrawal Agreement
entered into force on 1 February 2020 and provides for a transition period
during which Union law applies to and in the United Kingdom in accordance
with that agreement. That period will end on 31 December 2020.

In its guidelines of 23 March 2018, the European Council restated the Union’s
determination to have as close as possible a partnership with the United
Kingdom in the future. According to these guidelines, such a partnership
should cover trade and economic cooperation as well as other areas, in
particular the fight against terrorism and international crime, as well as
security, defence and foreign policy. The European Council set those
guidelines with a view to the overall understanding of the framework for the
future relationship that was to be elaborated in a political declaration
accompanying and referred to in the Withdrawal Agreement.

The political declaration that accompanied the Withdrawal Agreement sets out
the framework for the future relationship between the European Union and the
United Kingdom [2] (‘Political Declaration’). It establishes the parameters of ‘an
ambitious, broad, deep and flexible partnership across trade and economic
cooperation with a comprehensive and balanced Free Trade Agreement at its
core, law enforcement and criminal justice, foreign policy, security and
defence and wider areas of cooperation.’

Article 184 of the Withdrawal Agreement provides that the Union and the
United Kingdom are to use their best endeavours, in good faith and in full
respect of their respective legal orders, to take the necessary steps to negotiate
expeditiously the agreements governing their future relationship referred to in
the Political Declaration and to conduct the relevant procedures for the
ratification or conclusion of those agreements, with a view to ensuring that
those agreements apply, to the extent possible, as from the end of the transition
period.

1 Council Decision (EU) 2020/135 of 30 January 2020 on the conclusion of 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 (OJ L 29, 31.1.2020, p. 1).
2 Political declaration setting out the framework for the future relationship between the European Union
and the United Kingdom (OJ C 34, 31.1.2020, p. 1).

# EN 1 EN

On 25 February 2020, the Council adopted Decision (EU, Euratom) 2020/266 [3]
authorising the opening of negotiations with the United Kingdom of Great
Britain and Northern Ireland for a new partnership agreement. The
Commission was appointed as the Union negotiator. The Council Decision also
included an addendum with the directives for the negotiation of a new
partnership with the United Kingdom of Great Britain and Northern Ireland
(‘negotiating directives’).

The Commission conducted the negotiations in consultation with the special
committee appointed by the Council (the Working Party on the United
Kingdom of the Council). Due regard has been given to the resolutions of the
European Parliament of 12 February 2020 and 18 June 2020 and the
Commission has kept the European Parliament fully informed in accordance
with Article 218(10) TFEU, notably via its United Kingdom Coordination
Group.

Particular attention has been paid to ensuring transparency in the process, in
line with the guiding principles endorsed by the Council on 22 January 2020
for transparency in the negotiations on the future relationship. In view of that,
all negotiating documents of the Union negotiator (the Commission) shared
with the Council, the European Parliament, national parliaments or the United
Kingdom were released to the public, within the limits of Union law.
Furthermore, the Chief Negotiator kept the Council and the European Council,
the European Parliament and national parliaments, as well as the ECOSOC and
the Committee of the Regions regularly and fully informed about the
developments.

The negotiations were completed and the Trade and Cooperation Agreement,
together with the Agreement concerning security procedures for exchanging
and protecting classified information (the “Security of Information
Agreement”), were agreed at the level of the Chief Negotiators in Brussels on
24 December 2020.

The Security of Information Agreement is a supplementing agreement to the
Trade and Cooperation Agreement and, in accordance with Article
COMPROV.2 of the Trade and Cooperation Agreement, constitutes an integral
part of the overall bilateral relations between the Union and the United
Kingdom as governed by the Trade and Cooperation Agreement and forms part
of the overall framework. The Security of Information Agreement is linked to
the Trade and Cooperation Agreement by the same date of entry into
application and the same termination provision.

In parallel to the Trade and Cooperation Agreement and the Security of
Information Agreement, the Commission has negotiated the Agreement
between the Government of the United Kingdom of Great Britain and Northern
Ireland and the European Atomic Energy Community for Cooperation on the
Safe and Peaceful Uses of Nuclear Energy. The Recommendation for a Council
decision on the approval of that agreement is submitted together with this
proposal under a separate procedure. In addition to the conclusion of the

3 Council Decision (EU, Euratom) 2020/266 authorising the opening of negotiations with the United
Kingdom of Great Britain and Northern Ireland for a new partnership agreement (OJ L 58, 27.2.2020, p.
53).

# EN 2 EN

Agreement for Cooperation on the Safe and Peaceful Uses of Nuclear Energy,
that procedure also covers the conclusion of the Trade and Cooperation
Agreement as regards matters falling under the competence of the European
Atomic Energy Community (in particular, the participation of the United
Kingdom as a third country in the Euratom Research Programme and in the
European fusion activities, including ITER activities, through its membership,
as a third country, in the European Joint Undertaking for ITER and the

–
Development of Fusion Energy Fusion for Energy).

The entry into application of the Trade and Cooperation Agreement is a matter
of special urgency. The United Kingdom, as a former Member State, has
extensive links with the Union in a wide range of economic and other areas. If
there is no applicable framework regulating the relations between the Union
and the United Kingdom after 31 December 2020, those relations will be
significantly disrupted, to the detriment of individuals, businesses and other
stakeholders. The negotiations could only be finalised at a very late stage
before the expiry of the transition period. Such late timing should not
jeopardise democratic scrutiny to be exercised by the European Parliament in
accordance with the Treaties. In light of these exceptional circumstances, the
Commission proposes to apply the Agreements on a provisional basis until
28 February 2021 or another date as decided by the Partnership Council, or the
first day of the month following that in which Parties have notified each other
that they have completed their respective internal requirements and procedures
for establishing their consent to be bound, whichever is the earliest.

        - **Consistency with existing policy provisions in the policy area**

Both the European Council guidelines of 23 March 2018 and the Political
Declaration called for a close partnership between the Union and the United
Kingdom.

The negotiations of the Trade and Cooperation Agreement and the Security of
Information Agreement were preceded by the conclusion of the Withdrawal
Agreement, which entered into force on 1 February 2020. The Withdrawal
Agreement provides for a transition period during which Union law applies to
and in the United Kingdom in accordance with that agreement. The transition
period will end on 31 December 2020. The Trade and Cooperation Agreement
and the Security of Information Agreement aim to regulate the new
relationship between the Union and the United Kingdom, and hence to prevent
significant disruptions which could otherwise arise in that relationship
following the end of the transition period.

The Trade and Cooperation Agreement sets a solid basis for a mutually
beneficial and balanced partnership between the Union and the United
Kingdom. It also reflects the fact that, as a non-member of the Union, the
United Kingdom does not have the same rights nor enjoy the same benefits as a
member country.

**•** **Consistency with other Union policies**

The Trade and Cooperation Agreement and the Security of Information
Agreement fully respect the Treaties and preserve the integrity and the
autonomy of the Union legal order. These agreements will not require the
Union to amend its rules, regulations or standards in any regulated area. They

# EN 3 EN

promote the values, objectives, and interests of the Union, and ensure the
consistency, effectiveness and continuity of its policies and actions.

All imports from the United Kingdom will have to satisfy Union rules and
regulations (e.g. technical rules and product standards, sanitary or
phytosanitary rules, regulations on food and safety, health and safety standards,
environmental protection, consumer protection).

The Trade and Cooperation Agreement includes specific titles on Trade and
Level playing field standards in the areas of labour, environment, fight against
climate change, and sustainable development, which link the economic part of
the Trade and Cooperation Agreement to the Union’s overall objectives in
sustainable development and specific objectives in the area of labour,
environment, and climate change.

Participation of the United Kingdom in Union programmes will fully respect
the basic acts defining the programmes and the existing Union regulations
related to financial management such as the Financial Regulation.

**2.** **LEGAL** **BASIS**

The substantive legal basis for the proposed Council Decision on signature is Article
217 TFEU. This legal basis is the most appropriate given the broad scope of the
envisaged partnership.

The procedural legal basis is Article 218(5) TFEU, read in conjunction with the
second subparagraph of Article 218(8) TFEU which provides for unanimity voting in
the Council.

Thus, the legal basis for the proposed Council Decision is Article 217 TFEU, read in
conjunction with Articles 218(5) TFEU and the second subparagraph of Article
218(8) TFEU.

**3.** **OTHER** **ELEMENTS**

        - **Implementation by bodies established under the Trade and Cooperation**
**Agreement**

Title III of Part One of the Trade and Cooperation Agreement establishes a
Partnership Council that will oversee the attainment of the objectives of that
agreement and of any supplementing agreement. The Partnership Council is
comprised of representatives of the Union and of the United Kingdom at
ministerial level who will meet at least once a year and will supervise and
facilitate the implementation and application of the Trade and Cooperation
Agreement and of any supplementing agreement, such as the Security of
Information Agreement.

The Partnership Council may adopt decisions in respect of all matters for
which the Trade and Cooperation Agreement or any supplementing agreement
so provides. The Partnership Council can only take its decisions and make
recommendations by mutual agreement between the Union and the United
Kingdom. It can in no way restrict the decision-making at Union level. The
Union and the United Kingdom may, through the Partnership Council or
Specialised Committees, decide to amend certain aspects of the Trade and
Cooperation Agreement or of any supplementing agreement, only in those

# EN 4 EN

cases specifically provided therein. When the Parties approve such a decision,
it has to be subject to their respective applicable internal requirements and
procedures.

In the performance of its tasks, the Partnership Council will be assisted by the
Trade Partnership Committee, which in turn will be assisted by Trade
Specialised Committees, and by other Specialised Committees.

The Trade and Cooperation Agreement establishes the following Trade
Specialised Committees:

(a) The Trade Specialised Committee on Goods;

(b) The Trade Specialised Committee on Customs Cooperation and Rules of
Origin;

(c) The Trade Specialised Committee on Sanitary and Phytosanitary
Measures;

(d) The Trade Specialised Committee on Technical Barriers to Trade;

(e) The Trade Specialised Committee on Services, Investment and Digital
Trade;

(f) The Trade Specialised Committee on Intellectual Property;

(g) The Trade Specialised Committee on Public Procurement;

(h) The Trade Specialised Committee on Regulatory Cooperation;

(i) The Trade Specialised Committee on Level Playing Field for Open and
Fair Competition and Sustainable Development;

(j) The Trade Specialised Committee on Administrative Cooperation in
VAT and Recovery of Taxes and Duties.

The Trade and Cooperation Agreement establishes the following Specialised
Committees:

(k) The Specialised Committee on Energy;

(l) The Specialised Committee on Air Transport;

(m) The Specialised Committee on Aviation Safety;

(n) The Specialised Committee on Road Transport;

(o) The Specialised Committee on Social Security Coordination;

(p) The Specialised Committee on Fisheries;

(q) The Specialised Committee on Law Enforcement and Judicial
Cooperation;

(r) The Specialised Committee on Participation in Union Programmes.

The Partnership Council may establish or dissolve Trade Specialised
Committees or Specialised Committees, and the Trade Partnership Committee
may establish or dissolve Trade Specialised Committees.

The Trade and Cooperation Agreement also provides for a role for the
Partnership Council and Specialised Committees in dispute settlement, which
is addressed in Title I of Part Six of the Trade and Cooperation Agreement.

# EN 5 EN

        - **Implementation and application of the Trade and Cooperation Agreement**
**in the Union**

In accordance with Article 216(2) TFEU, agreements concluded by the Union
are binding upon the institutions of the Union and its Member States.

In order to allow the Union to timely react where relevant conditions are no
longer met, the Commission should be empowered to take certain decisions
suspending benefits granted to the United Kingdom under the Annex on
Organic Products and the Annex on Medicinal Products. Prior to doing so, the
Commission should inform the representatives of the Member States, who may
object to the position presented by the Commission by a blocking minority.
The Commission should also be empowered to adopt, in accordance with the
same procedure, any other necessary implementing arrangements for the
effective functioning of those Annexes.

Moreover, to guarantee compliance with the obligations under the Trade and
Cooperation Agreement, there are robust enforcement mechanisms. The Trade
and Cooperation Agreement provides the possibility for the Parties to take
swift, autonomous and operational measures to protect their interests, including
in particular in the areas of the level playing field (i.e. rebalancing measures,
remedial measures) and fisheries (i.e. compensatory measures, remedial
measures), as well as, more generally, in cases of serious economic, societal or
environmental difficulties of a sectorial or regional nature.

It is important for the Union to be fully able to deploy these enforcement
measures rapidly and effectivlely. For this purpose, the Commission should be
empowered to suspend obligations under the Trade and Cooperation
Agreement in accordance with Article GOODS.19 on measures in case of
breaches or circumvention of customs legislation, Article LPFOFCSD.3.12 on
remedial measures in the area of level plaing field, Article ROAD.11 on
remedial measures in road transport), Article AIRTRN.8 on refusal, revocation,
suspension or limitation of operating authorisation in air transport, Article
FISH.14 on remedial measures in the area of fisheries, Article FISH.9 on
compensatory measures in case of withdrawal or reduction of access, Articles
UNPRO.3.1 and UNPRO.3.20 on suspension and termination of the
participation of the United Kingdom in a Union programme and Article
INST.24 on temporary remedies or to take appropriate safeguard measures in
accordance with Article INST.36.

In accordance with the Treaties, the Commission will also act on behalf of the
Union on all steps of the procedure regarding dispute settlement under Title I
of Part Six of the Trade and Cooperation Agreement.

        - **Detailed explanation of the specific provisions of the draft Agreements**

The broad and ambitious cooperation between the Union and the United
Kingdom envisaged by the Trade and Cooperation Agreement reflects the
conclusions and guidelines of the European Council of 23 March 2018 and
builds upon the Political Declaration.

The Trade and Cooperation Agreement is a single package that comprises four
main components:

–
general and institutional arrangements;

# EN 6 EN

–
economic arrangements (including provisions on trade and level playing
field guarantees);

–
arrangements on law enforcement and judicial cooperation in criminal
matters; and

–
provisions on dispute settlement, basic values and safeguard measures.

The envisaged partnership is premised on the recognition of democracy, rule of
law and human rights, as well as the fight against climate change and
countering proliferation of weapons of mass destruction. A breach of any of
these essential elements allows the Parties to terminate or suspend the
operation of the Trade and Cooperation Agreement or any supplementing
agreement in whole or in part. The Parties also affirm their commitment to
ensuring a high level of personal data protection.

The scope of the Trade and Cooperation Agreement is comprehensive. It
includes the areas of interest outlined in the Political Declaration: trade and
economic cooperation, law enforcement and judicial cooperation in criminal
matters, participation in Union programmes and thematic areas of cooperation.
The Trade and Cooperation Agreement does not include arrangements for
cooperation in the area of foreign policy, external security and defence, given
the position of the United Kingdom not to negotiate nor include such
arrangements in the Trade and Cooperation Agreement. The Trade and
Cooperation Agreement respects the autonomy of the Union’s decision-making
powers and its legal order, the integrity of its Single Market and the Customs
Union and the indivisibility of the four freedoms of movement (people, goods,
services and capital). It covers not only free trade in goods and services but
also ways to prevent distortions and unfair competitive advantages. The Trade
and Cooperation Agreement reflects the fact that the United Kingdom is
leaving the Union’s system of common rules, supervision and enforcement
mechanisms, and can thus no longer enjoy the benefits of membership or of the
Single Market.

The Trade and Cooperation Agreement establishes an overall governance
framework covering all areas of cooperation under the Trade and Cooperation
Agreement and under any supplementing agreement, such as the Security of
Information Agreement, while certain adaptations are included to respond to
justified sectorial needs.

To guarantee compliance with the obligations under the Trade and Cooperation
Agreement, there are robust enforcement mechanisms. The Trade and
Cooperation Agreement foresees the possibility for the Parties to take swift,
autonomous and operational measures to protect their interests, including in
particular in the areas of the level playing field (i.e. rebalancing measures,
remedial measures) and fisheries (i.e. compensatory measures, remedial
measures), as well as, more generally, in cases of serious economic, societal or
environmental difficulties of a sectorial or regional nature.

As regards its territorial scope, the Trade and Cooperation Agreement covers,
with respect to the Union, the territories to which the Treaties apply and, with
respect to the United Kingdom, the territory of the United Kingdom. The Trade
and Cooperation Agreement also provides a limited coverage for the Channel
Islands and Isle of Man in what concerns trade in goods and access to waters.

# EN 7 EN

In line with the Declarations included in the minutes of the European Council
of 25 November 2018 and with the Council negotiating directives, the Trade
and Cooperation Agreement does not apply to Gibraltar.

The Trade and Cooperation Agreement consists of seven Parts (further divided
into Headings, Titles, Chapters and Sections), three Protocols and a number of
Annexes, as follows:

**Part One (Common and Institutional Provisions)** contains the general
provisions, principles of interpretation of the Trade and Cooperation
Agreement and definitions, and institutional framework.

Part One sets out the provisions on governance and implementation of the
Trade and Cooperation Agreement and establishes joint governance bodies (the
Partnership Council, Trade Partnership Committee, Trade Specialised
Committees and other Specialised Committees).

The governance provisions provide clarity on how the Trade and Cooperation
Agreement will be operated and controlled. They have been conceived to be
flexible and adaptable to specific needs that may arise in different areas. In
view of the scope and complexity of the Trade and Cooperation Agreement,
the Union insisted on a single governance framework covering the whole of the
Agreement. This provides legal certainty to businesses, consumers and citizens,
while avoiding multiple parallel structures and the creation of additional
bureaucracy.

The Partnership Council will oversee the implementation of the agreement.
Comprised of representatives of the Union and the United Kingdom at
ministerial level, the Partnership Council will meet in different configurations
depending on the matter at hand. It will be the forum in which the Parties will
discuss any issues that might arise, with the power to take binding decisions by
mutual consent. It will be assisted in its work by the Trade Partnership
Committee, Trade Specialised Committees and other Specialised Committees.

**Part Two (Trade, Transport, Fisheries and Other Arrangements)** includes
six headings:

–
Heading One: Trade, consisting of twelve titles: Title I (Trade in goods),
Title II (Services and investment), Title III (Digital trade), Title IV
(Capital movements, payments, transfers and temporary safeguard
measures), Title V (Intellectual property), Title VI (Public procurement),
Title VII (Small and medium-sized enterprises), Title VIII (Energy), Title
IX (Transparency), Title X (Good regulatory practices and regulatory
cooperation), Title XI (Level playing field for open and fair competition
and sustainable development), Title XII (Exceptions);

–
Heading Two: Aviation, consisting of two titles: Title I (Air Transport)
and Title II (Aviation Safety);

–
Heading Three: Road Transport, consisting of two titles: Title I
(Transport of goods by road) and Title II (Transport of passengers by
road);

–
Heading Four: Social Security Coordination and visas for short-term
travel;

–
Heading Five: Fisheries;

# EN 8 EN

–
Heading Six: Other Provisions.

As follows from its headings and titles, Part Two covers trade in goods and
services, as well as a broad range of other areas of economic and broader
cooperation, such as investment, competition, tax transparency, energy, air and
road transport, non-discrimination with regard to certain mobility arrangements
and social security coordination, and fisheries.

Part Two sets out a modern, sustainable trade policy. Both Parties commit to
common high standards in areas such as labour and social standards,
environmental protection, the fight against climate change, including carbon
pricing, and relevant standards on tax avoidance and tax transparency. [4] It also
contains principles on subsidies to prevent either Party from granting subsidies
that have a material effect on trade or investment between the Parties. These
agreed standards and principles are associated with domestic enforcement and
dispute settlement mechanisms to ensure that businesses from the EU and the
UK compete on a level playing field. Part Two foresees that each Party can
take unilateral measures as appropriate to protect itself against effects on trade
or investment resulting from subsidies or from significant divergences in the
respective subsidy control systems or in the respective levels of labour and
social, environmental or climate protection.

In terms of trade in goods, the provisions in Part Two go beyond recent EU
free trade agreements with partners, such as Canada and Japan, by providing
for zero tariffs and zero quotas on all goods. To benefit from these exceptional
preferences, businesses must ensure that their products originate in the Union
or in the United Kingdom. These ‘rules of origin’ are essential to ensure the
integrity of the Union market. The Trade and Cooperation Agreement will also
facilitate, to the extent permitted by the Union Customs Code, the customs
formalities that apply to any third country outside the Customs Union. It will
also remove unnecessary technical barriers to trade, yet still ensuring that all
United Kingdom’s goods entering the Union fully meet the Union’s high
regulatory standards, including on food quality (e.g. sanitary and phytosanitary
standards) and product safety.

A significant level of openness for trade in services is also agreed, going
beyond the baseline provisions of the WTO General Agreement on Trade in
Services (GATS), while reflecting the fact that the United Kingdom no longer
benefits from free movement of persons and, hence, from freedom to supply
services. United Kingdom’s service providers wanting to offer services in the
Union will need to meet all appropriate regulatory requirements in the Union,
but they will not be treated any less favourably than Union operators in those
areas covered by the Trade and Cooperation Agreement, and vice-versa [5] .
United Kingdom’s investors can also establish legal entities in the Union in
order to offer services across the single market and vice-versa. The Agreement
includes a framework for the future negotiation of recognition agreements in
relation to profesional qualifications.

4 The Union and the United Kingdom also intend to endorse a Joint Declaration on Countering Harmful
Tax Regimes at the time of conclusion of the Agreements.
5 In accordance with the EU’s trade policy a limited number of sectors are excluded (public services,
some transport services, and audiovisual services to preserve cultural diversity).

# EN 9 EN

The Trade and Cooperation Agreement contains provisions aimed at
facilitating digital trade, by addressing unjustified barriers, and ensuring an
open, secure and trustworthy online environment for businesses and
consumers, along with high standards of personal data protection. The
Agreement also contains provisions guaranteeing the protection of intellectual
property rights. Additionally, it includes provisions on mutual opportunities in
the Parties’ respective public procurement markets and on procurement
standards going beyond their commitments under the WTO Government
Procurement Agreement (GPA).

On energy, as the United Kingdom will no longer participate in the single
electricity market and EU trading platforms, the Trade and Cooperation
Agreement creates a new framework for bilateral energy cooperation, aimed at
ensuring cost-efficient, clean and secure supplies of energy that are essential to
the functioning of both economies, and putting in place new mechanisms to
cooperate on renewable energy, in particular in the North Sea, and tackling
climate change. Substantive provisions on level playing field and liberalisation
are also part of the Agreement, including in terms of conditions for subsidies in
the energy sector. As in the other areas, the provisions on energy do not
replicate the full benefits of the Single Market for the United Kingdom, taking
into account its third-country status.

On transport, the Trade and Cooperation Agreement provides for continued
and sustainable air and road connectivity, while respecting the integrity of the
Single Market. It includes provisions to ensure that competition between Union
and United Kingdom operators takes place on a level playing field, so that
passenger rights and transport safety are not undermined.

Part Two also contains a framework for joint and sustainable management of
fish stocks in Union and United Kingdom’s waters. The United Kingdom, as an
independent coastal state, will have control over its waters and it will be able to
further develop British fisheries, yet European fishermen and women will
continue to have access to UK waters to carry out their fishing activities.

**Part Three (Law Enforcement and Judicial Cooperation in Criminal**
**Matters)** sets out a framework for law enforcement and judicial cooperation in
criminal matters. It recognises the need for strong cooperation between
national police and judicial authorities and also Union agencies and bodies, in
particular for fighting and prosecuting cross-border crime and terrorism.

Part Three covers the following key areas:

–
Data exchange: arrangements for timely, effective and efficient exchange
of air passenger data (known as Passenger Name Records or PNR),
DNA, fingerprint and vehicle registration data (so-called ‘Prüm data’ –
which have never before been exchanged between the Union and a nonSchengen third country) criminal record information and operational
information – complementing international channels, such as Interpol;

–
Europol and Eurojust: effective cooperation between the United
Kingdom and Europol and Eurojust, in line with the rules for cooperation
with third countries established in Union legislation;

–
Surrender: enabling the swift surrender of criminals between the Member
States of the Union and the United Kingdom through streamlined

# EN 10 EN

procedures, strict deadlines, robust safeguards (including appropriate
grounds for refusal of surrender), procedural rights and judicial control;

–
Mutual assistance: arrangements to facilitate and supplement the Council
of Europe Conventions in criminal matters, e.g. through streamlined
procedures, time limits, and technological infrastructures, on a wide
range of measures, including freezing and confiscating property;

–
Anti-money laundering: provisions for cooperation on combating money
laundering and the financing of terrorism.

Part Three respects the United Kingdom’s status as a non-Union member
outside of the Schengen area. For instance, the United Kingdom will no longer
have direct, real-time access to sensitive Union databases that support the

–
Union area of freedom, security and justice as this is provided only to
Member States and very closely associated countries that accept all
accompanying obligations.

The close and comprehensive police and judicial cooperation is underpinned by
guarantees to respect democracy and the rule of law, to protect effectively
fundamental rights and freedoms of individuals, including those enshrined in
the European Convention on Human Rights and by giving effect domestically
to them, as well as commitments by both Parties to uphold high levels of data
protection standards. This was a particularly important demand from the Union
side with a view to ensuring that both the security and the fundamental rights
of its citizens are protected. Part Three also provides for specific provisions on
suspension of cooperation in case of serious and systemic deficiencies in
ensuring any of these safeguards, as well as a dedicated dispute settlement
mechanism.

**Part Four (Thematic Cooperation)** includes two titles: Title I: Health
Security and Title II; Cyber Security. Part Four sets out provisions for
cooperation between the Parties on health security and cybersecurity issues,
including through temporary and limited participation of the United Kingdom
in a number of Union structures, only upon invitation by the Union, and
provided specific common threats arise.

**Part Five (Participation in Union Programmes, Sound Financial**
**Management and Financial Provisions)** sets out provisions regarding the
United Kingdom’s continued participation as a third country in a number of
flagship Union programmes, subject to financial contribution by the United
Kingdom to the Union budget. The precise list of such programmes will be
adopted later by the Specialised Committee on Participation in Union
Programmes. In addition the Specialised Committee on Participation in Union
Programmes may also set up a list of services provided through the
implementation of Union Programmes to which the United Kingdom may have

access.

The legal bases (basic acts) of the Union programmes and activities in which
the United Kingdom may participate have still not been adopted. However,
there is a common understanding between the United Kingdom and the Union
on the programmes in which the United Kingdom may participate and under
which specific conditions, subject to the conditions provided in the definitive
legal bases. Therefore, a Joint Declaration attached to the Trade and

# EN 11 EN

Cooperation Agreement provides a framework for the protocols that will be
added to that agreement by the Specialised Committee on Participation in
Union Programmes when the legal bases of those programmes will be adopted.

**Part Six (Dispute Settlement and Horizontal Provisions)** includes three
titles: Title I (Dispute settlement), Title II (Basis for cooperation) and Title III
(Fulfilment of obligations and safeguard measures).

On dispute settlement, if a disagreement arises and a solution cannot be found
between the Parties, the Trade and Cooperation Agreement foresees that an
independent arbitration tribunal can be established to settle the matter through
a binding ruling. This dispute settlement mechanism applies to most areas of
the Trade and Cooperation Agreement, including level playing field and
fisheries. It is accompanied by credible and robust enforcement and
compliance mechanisms, including the possibility to suspend the complaining
party’s obligations under the Trade and Cooperation Agreement e.g. to
reintroduce tariffs and/or quotas. Furthermore, each Party will under certain
conditions be able to cross-retaliate whenever another Party does not comply
with the ruling of the arbitration tribunal. For instance, a persisting breach by
one Party that concerns a specific economic sector will allow the other Party to
retaliate with measures in other economic sectors. Each Party may also
unilaterally take appropriate safeguard measures in cases of serious economic,
societal or environmental difficulties of a sectorial or regional nature.

**Part Seven (Final Provisions)** contains final provisions, including on the entry
into force, review and termination of the Trade and Cooperation Agreement.

Two **Protocols** provide for **administrative cooperation and combating fraud**
**in the field of Value Added Tax, mutual assistance for the recovery of**
**claims relating to taxes and duties** and for **mutual administrative assistance**
**in customs matters** .

**The Protocol on Social Security Coordination** sets out a number of social
security coordination measures aimed at protecting the social security
entitlements of EU citizens and UK nationals in a cross-border situation
involving the UK and the EU as of 1 January 2021. Third-country nationals,
stateless persons and refugees are also protected. A wide range of benefits is
covered, including old-age and survivors’ pensions, death grants, sickness
benefits, maternity / paternity benefits related to the birth of a child, benefits in
respect of accidents at work or pre-retirement benefits. The Protocol ensures
that the social security coordination arrangements established therein are based
on the principle of non-discrimination between the Member States of the
Union.

**The Agreement concerning security procedures for exchanging and**
**protecting classified information** sets out rules and modalities for the
exchange of classified and non-classified sensitive information. In line with
other security of information agreements concluded by the Union with other
third countries, the Security of Information Agreement ensures the secure
handling of sensitive information, based on the principle of the originator’s
consent prior to the release of the information exchanged. The Security of
Information Agreement applies as from the date of application of the Trade and
Cooperation Agreement, or from the date the Parties have notified each other

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that they have completed their respective internal requirements and procedures
to release classified information under that agreement, whichever is later.

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2020/0381 (NLE)

Proposal for a

**COUNCIL DECISION**

**on the signing, on behalf of the Union, and on provisional application of the Trade and**
**Cooperation Agreement between the European Union and the European Atomic Energy**

**Community, of the one part, and the United Kingdom of Great Britain and Northern**
**Ireland, of the other part, and of the Agreement between the European Union and the**
**United Kingdom of Great Britain and Northern Ireland concerning security procedures**

**for exchanging and protecting classified information**

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union (‘TFEU’), and in
particular Article 217, in conjunction with Article 218(5) and the second subparagraph of
Article 218(8) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1) On 29 March 2017, the United Kingdom notified the European Council pursuant to
Article 50 of the Treaty on European Union (‘TEU’) of its intention to withdraw from
the European Union and from the European Atomic Energy Community.

(2) On 30 January 2020, the Council adopted Decision (EU) 2020/135 on the conclusion
of 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 (the ‘Withdrawal Agreement’). [6] The Withdrawal Agreement entered into
force on 1 February 2020.

(3) On 25 February 2020, the Council adopted Decision (EU, Euratom) 2020/266 [7]
authorising the Commission to open negotiations with the United Kingdom for a new
partnership agreement. The negotiations have been conducted in light of the
negotiating directives of 25 February 2020.

(4) The negotiations were completed on 24 December 2020. They resulted in the Trade
and Cooperation Agreement between the European Union and the European Atomic
Energy Community, of the one part, and the United Kingdom of Great Britain and
Northern Ireland, of the other part ('the Trade and Cooperation Agreement') and the
Agreement between the European Union and the United Kingdom of Great Britain and
Northern Ireland concerning security procedures for exchanging and protecting
classified information (the 'Security of Information Agreement').

6 Council Decision (EU) 2020/135 of 30 January 2020 on the conclusion of 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 (OJ L 29, 31.1.2020, p. 1).
7 Council Decision (EU, Euratom) 2020/266 authorising the opening of negotiations with the United
Kingdom of Great Britain and Northern Ireland for a new partnership agreement (OJ L 58, 27.2.2020, p.
53).

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(5) The Trade and Cooperation Agreement establishes the basis for a broad relationship
between the Union and the United Kingdom involving reciprocal rights and
obligations, common actions and special procedures. The Security of Information
Agreement is a supplementing agreement to the Trade and Cooperation Agreement,
intrinsically linked to the latter in particular with regard to its entry into application
and termination. The decision on the signing of the Trade and Cooperation Agreement
and the Security of Information Agreement (the ‘Agreements’) should therefore be
based on the legal basis providing for the establishment of an association allowing the
Union to enter into commitments in all areas covered by the Treaties.

(6) The signing of the Trade and Cooperation Agreement as regards matters falling under
the competence of the European Atomic Energy Community is subject to a separate
procedure.

(7) It is appropriate to define the modalities of the Union’s representation in the
Partnership Council and the Committees established by the Trade and Cooperation
Agreement. The Commission, as provided for in Article 17(1) of the Treaty on
European Union (‘TEU’), is to represent the Union and to express the Union’s
positions as established by the Council in accordance with the Treaties. The Council is
to exercise its policy-making and coordinating functions as provided for in Article
16(1) TEU by establishing the positions to be taken on the Union’s behalf in the
Partnership Council and the Committees established by the Trade and Cooperation
Agreement. Furthermore, where the Partnership Council or the Committees
established by the Trade and Cooperation Agreement are called upon to adopt acts
having legal effects, the positions to be taken on the Union’s behalf in these bodies are
to be established in accordance with the procedure set out in Article 218(9) TFEU.

(8) One or more Member States may request that the Commission representative be
accompanied, as part of the Union delegation, by a representative of that or those
Member States in a meeting of the Partnership Council and other joint bodies
established by the Agreement.

(9) In order to allow the Union to timely react where relevant conditions are no longer
met, the Commission should be empowered to take certain decisions suspending
benefits granted to the United Kingdom under the Annex on Organic Products and the
Annex on Medicinal Products. Prior to doing so, the Commission should inform the
representatives of the Member States, who may object to the position presented by the
Commission by a blocking minority. The Commission should also be empowered to
adopt, in accordance with the same procedure, any other necessary implementing
arrangements for the effective functioning of those Annexes.

(10) With a view to enable the Union to take rapid and effective action to protect its
interests in accordance with the Trade and Cooperation Agreement, and until a
specific legislative act regulating the adoption of remedial measures under the Trade
and Cooperation Agreement is adopted and enters into force in the Union, the
Commission should be empowered to take remedial measures, such as the suspension
of obligations under the Trade and Cooperation Agreement or any supplementing
agreement, in cases of breaches of certain provisions of the Trade and Cooperation
Agreement or non-fulfillement of certain conditions, notably in the areas of trade in
goods, level playing field, road transport, air transport, fisheries and Union
programmes, as specified in the Trade and Cooperation Agreement, as well as to take
appropriate remedial measures, rebalancing measures and countermeasures.

# EN 15 EN

(11) Whenever the Union is required to act in order to comply with the provisions of the
Agreements, such action is to be taken in accordance with the provisions of the
Treaties, while respecting the limits of the powers conferred upon each institution. It is
therefore for the Commission to provide the United Kingdom with the information or
notifications required in the Agreements, except where the Agreements refer to other
specific institutions, bodies, offices and agencies of the Union and to consult the
United Kingdom on specific matters. It is also for the Commission to represent the
Union before the arbitration tribunal where a dispute has been submitted to arbitration
in accordance with the Trade and Cooperation Agreement.

(12) It is recalled that, in accordance with the negotiating directives of 25 February 2020,
the territorial scope of the Trade and Cooperation Agreement concluded between the
Union and the United Kingdom does not include Gibraltar. This does not preclude the
possibility of separate agreements between the Union and the United Kingdom in
respect of Gibraltar in line with the declaration of the European Council and of the
Commission included in the minutes of the European Council meeting of
25 November 2018.

(13) Being a country that has withdrawn from the Union, the United Kingdom is in a
different and exceptional situation with regard to the Union compared to other third
countries with which the Union has negotiated and concluded agreements. Under the
Withdrawal Agreement, Union law applies to and in the United Kingdom during the
transition period, and, at the end of that period, the basis for cooperation with the
Member States of the Union is therefore at a very high level, in particular in the areas
of the internal market, common fisheries policy, and freedom, security and justice. If
the Agreements do not enter into force from 1 January 2021, the cooperation between
the Union and the United Kingdom will fall to a level that is neither desirable nor in
the Union interest, causing disruptions in the relationship between the Union and the
United Kingdom. Such disruptions can be limited through the provisional application
of the Agreements.

(14) Therefore, given the exceptional situation of the United Kingdom with regard to the
Union, the urgency of the situation with the transition period ending on 31 December
2020, as well as the need to give sufficient time to the European Parliament and the
Council to appropriately scrutinise the texts of the Agreements, the Agreements should
be applied on a provisional basis, for a limited period of time as set out in Article
FINPROV.11(2) [Entry into force and provisional application] of the Trade and
Cooperation Agreement and Article 19 of the Security of Information Agreement.

(15) Due to the very late completion of the negotiations of the Agreements only several
days before the end of the transition period, it has not been possible to proceed to the
final legal linguistic revision of the texts of the Agreements before their signature.
Therefore, starting immediately after the signature of the Agreements, the Parties
should proceed to the final legal linguistic revision of the texts of the Agreements in
all 24 authentic languages. That legal linguistic revision should be completed at the
latest by 30 April 2021. Notwithstanding the previous sentence, the process of final
legal revision for the English version of the Agreement should be finalised by the day
referred to in Article FINPROV.11(1) [Entry into force and provisional application] if
that day is earlier than 30 April 2021. The Parties should then, by exchange of
diplomatic notes, establish those legally revised texts of the Agreements in all such
languages as authentic and definitive. These revised texts should replace _ab initio_ the
signed versions of the Agreements.

# EN 16 EN

(16) The Agreements should be signed on behalf of the Union, subject to the fulfilment of
the procedures required for their conclusion at a later date.

HAS ADOPTED THIS DECISION:

_Article 1_

The signing, on behalf of the Union, for the parts other than those falling under the
competence of the European Atomic Energy Community, of the Trade and Cooperation
Agreement between the European Union and the European Atomic Energy Community, of the
one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part, is
hereby authorised, subject to the conclusion of the said Agreement.

The signing, on behalf of the Union, of the Agreement between the European Union and the
United Kingdom of Great Britain and Northern Ireland concerning security procedures for
exchanging and protecting classified information is hereby authorised, subject to the
conclusion of the said Agreement.

The texts of these Agreements are attached to this Decision.

_Article 2_

When the Commission represents the Union in bodies created by the Trade and Cooperation
Agreement, it shall inform the Council in a timely manner about the discussions and the
outcome of the meetings and of acts adopted by written procedure, and, upon request, shall
provide minutes and other documents relating to such meetings or procedure. The
Commission shall also inform the European Parliament, as appropriate.

_Article 3_

1. The Commission shall be authorised to take, on behalf of the Union, any decision to:

(a) confirm or suspend the recognition of equivalence following the reassessment
of equivalence to be carried out by 31 December 2023 in accordance with
paragraph 3 of Article 3 [Recognition of equivalence] of Annex TBT-4

[Organic Products];

(b) suspend the recognition of equivalence in accordance with paragraphs 5 and 6
of Article 3 [Recognition of equivalence] of Annex TBT-4 [Organic Products];

(c) accept official Good Manufacturing Practice documents issued by an authority
of the United Kingdom for manufacturing facilities located outside the territory
of the issuing authority and to determine the terms and conditions under which
the Union accepts those official Good Manufacturing Practice documents in
accordance with paragraphs 3 and 4 of Article 5 [Recognition of inspections]
### of Annex TBT-2 [Medicinal Products ] ;

(d) adopt any necessary implementing arrangements for the exchange of official
Good Manufacturing Practice documents with the authority of the United
Kingdom under Article 6 [Exchange of official GMP documents] of Annex
### TBT-2 [on Medicinal Products ] and for the exchange of information with the

# EN 17 EN

authority of the United Kingdom regarding inspections of manufacturing
### facilities under Article 7 [Safeguards] of Annex TBT-2 [Medicinal Products ];

(e) suspend recognition of inspections or acceptance official Good Manufacturing
Practice documents issued by the United Kingdom and notify the United
Kingdom of its intention to apply Article 9 [Suspension] of Annex TBT-2
### [Medicinal Products ] and enter into consultations with the United Kingdom in

accordance with paragraph 3 of Article 8 [Changes to the applicable
### legislation] of Annex TBT-2 [Medicinal Products ] ;

(f) suspend totally or partially, for all or some of the products listed in Appendix C
to Annex TBT-2 [on Medicinal Products], the recognition of inspections and
acceptance of official Good Manufacturing Practice documents of the other
Party in accordance with paragraph 1 of Article 9 [Suspension] of Annex TBT2 [Medicinal Products].

2. The Commission shall take those proposed decisions in accordance with the
procedure laid down in Article 4(2) of this Decision.

_Article 4_

1. Until a specific legislative act regulating the adoption of such measures is adopted
and enters into force in the Union, the decision of the Union to take the following
measures under the Trade and Cooperation Agreement shall be taken by the
Commission in accordance with the conditions set out in the corresponding
provisions of the Trade and Cooperation Agreement as regards:

(a) the suspension of the relevant preferential treatment of the product(s)
concerned as set out in Article GOODS.19 [Measures in case of breaches or
circumvention of customs legislation];

(b) the application of remedial measures and the suspension of obligations as set
out in Article LPFOFCSD.3.12 [Remedial measures];

(c) the application of rebalancing measures and counter-measures as set out in
Article LPFOFCSD.9.4 [Rebalancing];

(d) the application of remedial measures as set out in Article ROAD.11 [Remedial
measures];

(e) the refusal, revocation, suspension or limitation of operating authorisation of an
airline, Article AIRTRN.8 [Refusal, revocation, suspension or limitation of
operating authorisation];

(f) the application of remedial measures as set out in Article FISH.14 [Remedial
measures and dispute resolution];

(g) compensatory measures as set out in Article FISH.9 [Compensatory measures
in case of withdrawal or reduction of access]

(h) the suspension or termination of the participation of the United Kingdom in
Union programmes, as set out in Article UNPRO.3.1 [Suspension of the
participation of the United Kingdom in a Union programme by the European
Union] and Article UNPRO.3.20 [Termination of the participation of the
United Kingdom in a Union programme by the European Union];

# EN 18 EN

(i) an offer or acceptance of temporary compensation or the suspension of
obligations in the context of compliance following an arbitration or panel of
experts procedure under Article INST.24 [Temporary Remedies], except as
provided in Regulation (EU) No 654/2014;

(j) the safeguard measures and rebalancing measures as set out in Article INST.36

[Safeguard measures].

2. The Commission shall fully inform the Council in a timely manner of its intention to
adopt the proposed measures set out in paragraph 1 and take into account the
possible views expressed. The Commission shall also inform the European
Parliament, as appropriate.

3. The Commission may also adopt measures reinstating the rights and obligations under
the Trade and Cooperation Agreement as they existed prior to the adoption of
measures foreseen in paragraph 1.

_Article 5_

Subject to reciprocity, the Trade and Cooperation Agreement between the European Union
and European Atomic Energy Community, of the one part, and the United Kingdom of Great
Britain and Northern Ireland, of the other part, and the Agreement between the European
Union and the United Kingdom of Great Britain and Northern Ireland concerning security
procedures for exchanging and protecting classified information shall be applied on a
provisional basis as from 1 January 2021. Provisional application shall cease on one of the
following dates, whichever is the earliest:

(a) 28 February 2021 or another date as decided by the Partnership Council; or

(b) first day of the month following that in which both Parties have notified each other
that they have completed their respective internal requirements and procedures for
establishing their consent to be bound.

_Article 6_

The President of the Council shall designate the person empowered to proceed, on behalf of
the Union, to give the notification provided for in Article LAW.OTHER.134 [Notifications]
and Article SSC.11 of the Protocol on Social Security Coordination of the Trade and
Cooperation Agreement.

_Article 7_

The declarations attached to this Decision shall be approved on behalf of the Union.

_Article 8_

The President of the Council is hereby authorised to designate the person(s) empowered to
sign the Agreements on behalf of the Union.

# EN 19 EN

_Article 9_

This Decision shall enter into force on the day of its adoption.

Done at Brussels,

_For the Council_

_The President_

# EN 20 EN