This Friday 31 January, the United Kingdom is leaving the European Union, its institutions, but also all of its specialised agencies. These agencies, which did not take part in the negotiations on the agreement on an orderly British withdrawal and are not involved in the ongoing political negotiations on the future relationship, have nevertheless prepared for all possible scenarios over the last few years and, in some cases, have had to make some adjustments.
The first concrete symbol of Brexit was undoubtedly the decision, in 2017, to relocate the two London-based agencies, the European Banking Authority (EBA) and the European Medicines Agency (EMA), to Paris and Amsterdam respectively (see EUROPE 11908/1).
This was a particular challenge for these two agencies which, in addition to having to identify the potential risks associated with Brexit in their respective sectors, also had to manage their move.
Late adoption of European legislation endorsing these relocations, at the end of 2018, has somewhat delayed the EBA relocation process, which has been done in several stages (see EUROPE 12173/4). It was finally in June 2019 that its 200 employees were able to move into their new offices in the Europlaza tower in La Défense.
For the EMA, it will have taken even longer. After an initial move in March 2019 to interim premises, it was only from 13 January 2020 that the Agency’s staff were able to move to permanent premises in the business district of Zuidas (see EUROPE 12371/8).
Generally speaking, what will Brexit change for the functioning of EU agencies? So far, not much, we are told.
Article 128 of the withdrawal agreement is very clear on this. From 1 February and throughout the 11-month transition period, the United Kingdom will continue to be treated as an EU Member State, but will no longer take part in decisions taken by EU institutions and agencies.
This means that the UK regulator will no longer be part, for example, of the governance bodies of the three European Financial Supervisory Authorities (ESAs), which are composed of the competent national authorities of the EU Member States. And, a priori, no observer status has been granted to it for the time being.
The withdrawal agreement nevertheless provides that, during the transitional period, representatives of the United Kingdom may, if invited, attend meetings of EU agencies if the discussion concerns individual acts to be addressed to the United Kingdom or to natural or legal persons resident in the United Kingdom or if the presence of the United Kingdom is necessary in the interests of the Union, in particular for the implementation of European law during the transitional period.
But although the presence of British representatives may be tolerated at certain meetings, there is no question of giving them any kind of right to vote.
Brexit will in any case have occupied a large part of the agencies’ work in 2018 and 2019. This is particularly true for the ESAs, which have had to monitor the authorisation activities of the national competent authorities for the relocation of companies from the UK to the Twenty-Seven.
“Each agency can enter into agreements with the UK according to its sectoral needs, but future relations with the UK will follow common principles established at the European level”, we were told.
Thus, for the ESA, agreements have multiplied to mitigate the effects that a no-deal Brexit could have on European markets.
The European Securities and Markets Authority (ESMA) concluded several memoranda of understanding with the Bank of England and the UK regulator, notably on the recognition by ESMA of the equivalence between EU financial prudential rules and UK standards supervising the activities of central clearing houses and central securities depositories located in the United Kingdom (see EUROPE 12187/17).
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have also concluded a series of memoranda of understanding with the Bank of England and the UK regulator on cooperation, supervision, enforcement and information exchange.
These memoranda of understanding, prepared in the event of the UK’s exit from the EU without an agreement, are therefore “no longer necessary” during the post-Brexit transition period until the end of 2020, as EU legislation will continue to apply to the UK, we were told.
The ESAs are therefore expecting to still negotiate the future relationship between the EU and the United Kingdom, which will determine the level of reciprocal market access, as well as the cooperation between them and their British counterparts after the end of the transition period.
The impact on the agencies’ budgets is, for the moment, difficult to assess. For the ESMA, we are told that the country will continue to contribute to the agency’s budget during the transition period, which will therefore have no impact on the budget for the year 2020.
The ESMA also assures that all the British nationals it employs will retain their jobs. EIOPA, for its part, indicates that Brexit has not reduced its workforce.
On the side of the EU agencies for judicial and police cooperation, one of Europol’s spokespersons assured us that the UK remains an important partner for the agency.
“With the goal to achieve optimal law enforcement cooperation and serving in the best interests of security and justice for EU Member States, a continued law enforcement cooperation within our legal framework is desired”, he indicated.
However, the form this cooperation will take remains to be decided in the political negotiations between the UK and the EU. “Europol has prepared for all possible scenarios”, he maintained.
As for Eurojust, the agency remained very discrete on the subject, refusing to answer our questions and redirecting us to the European Commission.
See the withdrawal agreement: https://bit.ly/2vyIUmg (Original version in French by Marion Fontana)