Recognising the unique starting point of our new relationship, and the breadth and depth of its scope, it will make Sense to put in place arrangements to facilitate regulatory cooperation. This will include formal UK/EU mechanisms where we have agreed that our regulations will continue be aligned, as well as broader forms of cooperation that reflect the full scope of our shared interests.
At the end of the lmplementation Period, we will be in a largely unprecedented position – with the same rules and regulations as the EU and a relationship based on longstanding trust and cooperation between our regulators.
ln some areas it will be of benefit to both parties for their regulations to remain closely aligned. For example, if this were to enable mutual market access. In these areas, a commitment to remain closely aligned will mean that UK and EU regulatory standards will, in practice, remain substantially similar or equivalent in the future. This will mean that:
- in some cases, the parties might agree their rules should remain identical in substance, or the UK might choose to pass a rule that is identical in substance to an EU rule because it makes sense in a domestic context
- in other areas, UK law may not be identical in substance to EU law’ but the UK would have rules that are technically equivalent. This would be demonstrated through comparison
- in certain areas, UK law would deliver equivalent outcomes to EU rules. ln these cases, both parties would need to be satisfied that the shared outcomes were met. The exact means by which they are met could vary [and would be set out at the sectoral level].
lf in future, the UK Parliament were to decide to pass legislation that was not identical in substance or equivalent to an EU rule, this would be in the knowledge that there may be consequences for the UK’s ability to collaborate closely with the EU. This may include, for example, affecting mutual market access, the UK’s participation in EU bodies or elements of security cooperation.
These arrangements for regulatory cooperation will need a mechanism to ensure that they function correctly and fairly. where there is an agreement for regulations to remain identical in substance or equivalent, the Joint Committee would have a role in ensuring the smooth operation of this process.
For example, if the UK had rules that were identical in substance to the EU, then a process would be followed so that the sectoral sub-committees, or the Joint committee, could consider proposals made by either party to legislate before these were enacted.
The mechanism will also ensure that, where the UK had agreed to have equivalent rules, this will be determined by the Joint Committee or relevant sub-committee. For instance, it can be based on a technical or outcomes-based assessment, through analysis of:
- technical requirements;
- internationally-recognised standards;
- a risk assessment;
- results derived from recognised analytical or statistical methods; and/or
- any relevant principles agreed by the parties.
Existing international arrangements often provide this type of assessment of the equivalence of rules. For example, the US-Canada and Canada-Switzerland technical working groups on organic equivalence and the EU-Swiss agriculture agreement has a joint committee, a Joint Veterinary Committee and numerous working groups capable of examining questions of equivalence.
The earlier that changes proposed by one party can be considered, the earlier it can be established what, if any, implications there are for the other party for and the agreement as a whole. ln particular, whether any actions are required in order to maintain rules that are identical in substance, or proposals for equivalence.
Where the parties are unabte to reach agreement on equivalence through this process, independent arbitration can be used. There are a number of precedents, for example in CETA and the WTO arbitration panels can rule on whether third country goods can be denied market access on sanitary or phytosanitary grounds.
lf agreement is reached that a particular proposal from one party would mean that UK and EU rules were no longer equivalent then the proposing party could bring forward another proposal to maintain equivalence. Alternatively, the proposing party might choose to accept that the rules would no longer be substantially similar or equivalent. ln response the responding party would be entitled to introduce proportionate measures to mitigate any substantive issues posed by the divergence This is similar to the way that sanitary and phytosanitary measures are handled in CETA where special conditions can be imposed when equivalence can no longer be assured.
ln addition to aligning our rules, we will also make sure our regulators continue to work together; as they do with regulators internationally. This will be essential for everything from getting new drugs to patients quickly to maintaining financial stability. We start from the place where our regulators already have deep and long-standing relationships, and we will look to maintain this, including through the establishment of fora for voluntary regulatory cooperation.
Interpretation and application
Ensuring the consistent interpretation and application of the terms of our agreements will be key for continued, reciprocal access to each other’s markets and systems. It will also give assurance that individuals and businesses are treated in the same manner in both the UK and the EU, where this is required by the agreement. Domestic implementation by the UK and the EU will also need to be construed consistently in the national legal systems. The need for consistency should however recognise the independence of the courts of both parties.
In future, UK courts will continue to look at relevant CJEU judgments, as they do currently for the appropriate jurisprudence of other countries’ and institutions’ courts. To aid this consistency and to avoid disputes, the Joint Committee should keep the case law of both the CJEU and the senior courts of the UK interpreting those provisions under review.
Where UK rules are identical in substance to EU rules, UK courts should interpret and apply those rules, where appropriate, with due regard to relevant decisions of the CJEU. This will ensure that there is consistent interpretation in the UK and the EU, providing certainty to people and businesses. UK courts will not, however, be able to make preliminary references to the CJEU.