UK: Trade Agreement Reached with European Union Following Brexit Transition

January 5, 2021 Lucy Halse

Key Points

  • The EU and UK have formed an agreement on EU-UK trade and cooperation post-Brexit
  • The EU-UK Trade and Cooperation Agreement provides mobility for business and ICT travel
  • The Agreement is temporarily effective Jan. 1, 2021 – Feb. 28, 2021
  • Formal ratification is required for the Agreement’s full implementation
  • There are three main provisions, including a Free Trade Agreement
  • Contractual Service Providers and Independent Professionals can stay in the EU or UK for 12 months
  • ICT permit holders can stay in the EU for up to three years and in the UK up to five years
  • Cross-border, seconded, and self-employed workers can keep their social security scheme for 24 months

Overview

The UK and European Commission have reached an agreement on trade and cooperation after December 31, 2020. The EU-UK Trade and Cooperation Agreement also provides mobility between the EU and UK for business and intracompany transfer (ITC) travel.

What are the Changes?

The European Commission and the UK decided on the terms of the EU-UK Trade and Cooperation Agreement on December 24, 2020. The agreement has three main parts, including an agreement on governance, a Free Trade Agreement, and a partnership for citizens’ security.

Free Trade Agreement Provisions

The Free Trade Agreement contains multiple provisions for travelers. The Agreement grants business visitors entrance to the EU for up to 90 days in a 180-day period within the Schengen Area to perform certain activities. In the UK, business visitors are generally allowed to stay for 90 days in a 180-day period. They may be able to stay longer based on governing local laws, which will remain in place until or unless modified. Business travel will also be allowed for investment purposes under the Free Trade Agreement. The Agreement will create a new category of exempt travel in EU countries that do not already have relevant provisions in their national legislation.

Contractual service suppliers and independent professionals may also work in the EU and UK for up to 12 months through the Agreement. Quotas and economic needs tests do not apply, but implementation will not be uniform across the EU for either category based on policies adopted by specific countries. Lastly, intracompany transferees (ICTs) who are transferred from one group to another within the EU or UK can stay for up to three years (managers and specialists) or one year (graduate trainees) in the EU. ICT permit holders may be able to stay for five years in the UK, which has a longer period of stay for ICT permit holders.

Employers and applicants should note that certain eligibility conditions exist for the categories above, including qualifications. The conditions are outlined in the Agreement. Additionally, each country in the EU has its own provisions for category and sector. Individual countries have the right to collaborate with each other and develop a regional framework to establish joint recommendations and governing rules related to qualification requirements. Rules regarding professional qualifications are developed with the Partnership Council. The Partnership Council governs the Free Trade Agreement.

Finally, the Free Trade Agreement creates social security regulations for cross-border workers between the EU and the UK, and it provides transitional measures for seconded workers or self-employed individuals who were in situations that existed before the Trade Agreement’s implementation. Affected workers can keep their current social security scheme for 24 months.

What Should Employers and Applicants Know?

The mobility provision provides some clarity and certainty for EU and UK employers beginning January 1, 2021. Additionally, the Home Office may change some of its Immigration Rules to account for newer provisions, such as Contractual Service Suppliers.

Looking Ahead

The Agreement will be temporarily implemented from January 1, 2021 through February 28, 2021. After that time, a formal ratification is required for the Agreement’s full implementation. For the EU, Parliament must give its consent to the Trade and Cooperation Agreement, and the European Council must adopt the decision on the Agreement’s conclusion.

Updates will be provided on the Agreement’s ratification when available.

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Content in this publication is not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult an Envoy-affiliated attorney or another qualified professional.

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