Jesse Norman – 2019 Statement on EU Agreements with Third Countries

Below is the text of the statement made by Jesse Norman, the Financial Secretary to the Treasury, in the House of Commons on 17 July 2019.

The Government are undertaking a programme of work to replace EU international agreements with bilateral agreements ready for a UK exit from the EU either in the event of no deal or at the end of the proposed implementation period. This is essential preparation for the UK’s withdrawal from the EU to ensure that the UK can, where relevant and possible, maintain the benefits of these agreements, thereby providing continuity and stability to businesses and individuals.

As part of this programme, officials in HM Treasury and HM Revenue & Customs are working with their international partners to replace EU Customs Co-operation and Mutual Administrative Assistance (CCMAA) agreements with UK-third country bilateral agreements. These agreements will provide a legal framework for the exchange of information between the UK and international partners on customs matters and continued co-operation between the parties’ customs authorities, both facilitating legitimate trade and supporting international efforts in fighting customs fraud. They also fulfil domestic legal requirements for Authorised Economic Operator Mutual Recognition Agreements (AEOMRAs), which deliver important trade benefits to some UK businesses.

In cases where the other party’s domestic law allows, the “replacement” UK-third country CCMAA agreements will include provision for them to enter into force upon signature, often referred to as “definitive signature”. The parties would thus be bound by these agreements ​upon signature, although the agreements’ provisions would not have effect until the EU CCMAA agreements cease to apply to the UK. Use of definitive signature in this case would enable the UK and its international partners, in the event of EU exit without a deal, to transfer without interruption key customs agreements that are currently in place by virtue of the UK’s membership of the EU. This is because there will be no change in effect of the agreement due to it being a replication of the arrangement the EU currently has in place with the third country. While many international treaties are expressly subject to ratification, it is also common in both UK and international practice, where practicable, for treaties to enter into force upon signature; In UK law, where a treaty enters into force upon signature, it is not subject to the procedures for parliamentary scrutiny as provided in section 20 of the Constitutional Reform and Governance Act 2010. However, as CCMAA agreements are straightforward bilateral agreements, and rely on provisions in the Taxation (Cross-Border Trade) Act 2018, which has already been approved by Parliament, the Government consider that definitive signature is appropriate in these instances.

The Taxation (Cross-Border Trade) Act 2018 provides the necessary powers for the UK to create a stand-alone customs regime once the UK exits the EU. In particular, section 26 of this Act allows for the UK to share information on customs matters with international partners and therefore provides the necessary legal basis from a UK perspective for the co-operation between parties outlined in the CCMAA agreements.

Once signed by both parties, a copy of each UK bilateral CCMAA agreement subject to definitive signature will be laid before Parliament as a Command Paper in the treaty series for information in the normal way.

Where third country partners’ domestic law does not permit them to be bound by signature, thereby requiring ratification by them, the CCMAA agreement will not use definitive signature but will be drafted to provide for consent to be bound by a two-stage process of signature and ratification.