Brexit
- General Information
On March 29, 2017 Great Britain and Northern Ireland (UK) notified the European Council of its intention to withdraw from the European Union (EU), a process known as Brexit.
In accordance with the Withdrawal Agreement of February 2020 (OJ L 29, 31.1.2020, page 7), the Union law continued to be applied for the UK and its territory for a “transitional period” up until December 31, 2020.
- What changed from 01.01.2021
From January 1, 2021, the transitional period, allowing UK a temporary part in the single market and in the Customs union of EU ended with which the free movement of people, goods and services, including the freedom of establishment came to an end. Leaving the Union, UK automatically, by law, left as a country all international agreements with the Union.
As of January 1 2021, individuals and businesses of UK operating in EU and individuals and businesses of EU operating in UK no longer benefit from the freedom of establishment and the freedom of providing services provided for in the Union Treaties .
Authorizations issued by the UK authorities according to the EU single market framework are no longer valid in the Union as of January 1, 2021.
As a result of this, the UK companies providing services lost their right to operate in the EU and cannot use the “passporting” regime applicable to the EU countries in the context of the single market. They should be established in the territory of the EU in order to be able to provide their services according to the legal framework of each EU country.
On December 31, 2020, in the Official Journal of the EU were published the following acts in relation to the exit of UK from the European Union:
- Trade and Cooperation Agreement between the European Union and the United Kingdom of Great Britain and Northern Ireland.
- Council Decision (EU) 2020/2252 of 29 December 2020 on the signing, on behalf of the Union, and on provisional application of the Trade and Cooperation Agreement between the European Union and the United Kingdom of Great Britain and Northern Ireland.
- Declarations referred to in the Union Decision about the signing on behalf of the Union and the temporary implementation of the Trade and Cooperation Agreement.
The acts can be found on the webpage of the Official EU newspaper, issue from 31.12.2020:
https://eur-lex.europa.eu/legal-content/BG/TXT/?uri=OJ:L:2020:444:TOC (Bulgarian version)
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2020:444:TOC (English version)
- Trade and Cooperation Agreement between EU and UK:
The agreement establishes a basis for a broad relationship between the Union and UK, including reciprocal rights and obligations, common actions and special procedures.
The agreement foresees a significant level of openness for the provision of services and investments going beyond the basic stipulation of the General agreement on trade in services (GATS) to which both the EU and the UK are parties.
As in all its agreements of free trade, EU fully reserves the right to regulate its own markets. The agreement does not exclude the possibility of the member states to conclude bilateral arrangements or agreements with UK on specific issues within the scope of the Agreement on Trade and Cooperation.
Member States that intend to negotiate and conclude bilateral arrangements with UK in areas not covered by the Trade and Cooperation Agreement should inform the European Commission of their intentions in full compliance with the principle of loyal cooperation.
The Trade and Cooperation Agreement does not apply to nor has any effect in Gibraltar territory.
Entry into force and preliminary application of the Agreement:
The Agreement is preliminary applicable– as of 01.01.2021 until the completion of the procedures necessary for its entry into force. It should be signed and the attached declarations and notifications should be approved on behalf of the Union.
The agreement enters into force on the first day of the month following the month in which both parties have notified each other that they have fulfilled their respective internal requirements and procedures for establishing their consent to be bound (Article FINPROV.11).
The Agreement is signed based on Art. 218 TFEU and does not require ratification by national parliaments.
For more information, please visit:
https://www.esma.europa.eu/sections/brexit
https://www.esma.europa.eu/databases-library/esma-library?f%5B0%5D=im_esma_sections%3A1163
https://www.eiopa.europa.eu/brexit-communication_en?source
- FSC relations with the United Kingdom after Brexit
Capital market
The European Securities and Markets Authority (ESMA) and national financial regulatory authorities in the EU have negotiated a Memoranda of Understanding (MoUs) with the Financial Conduct Authority (FCA) of UK.
The MoUs are similar to the already conducted agreements of the exchange of information with third-party supervisors and ensure a seamless exchange of information for the purposes of financial services supervision.
The FSC is a party to the multilateral memorandum between the EU/EEA securities and the markets regulatory authorities on one hand and the FCA on the other hand covering supervisory cooperation and information exchange. Under the memorandum, the parties are able to share information related to the market surveillance, investment services and asset management activities, etc. This in turn will allow certain activities such as outsourcing and delegation of management company activities to continue to be carried out by UK-based companies on behalf of EEA-based counterparties. Similar memoranda have been concluded with the Bank of England (BoE) regarding the recognition of central counterparties (CCP) and central securities depositories (CSD) established in the United Kingdom.
Insurance market
The European Insurance and Occupational Pensions Authority (EIOPA) and all national competent authorities of European Economic Area (EEA) with competences in the insurance area have concluded memoranda of understanding with the Bank of England (BoE) in its capacity as a prudential regulator and with the Financial Supervisory Authority (FCA) of UK.
The MoUs will ensure cooperation in the field of insurance, provide mutual assistance and regular exchange of information with the aim of:
- Maintenance of stable prudential and supervisory activity in the UK or in an EEA member state that have cross-over border activities
- Maintaining financial stability in the financial markets within the EEA and the UK
https://www.eiopa.europa.eu/media/news/eiopa-and-its-members-agree-no-deal-brexit-mous-bank-of-england-and-financial-conduct_en?source=search - Questions and Answers
The European Commission has published Questions and Answers regarding the Agreement, which provide useful information for the status and its scope:
https://ec.europa.eu/commission/presscorner/detail/bg/QANDA_20_2532
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