Anticipated impact of UK's withdrawal from the EU on existing ...

Anticipated impact of UK’s withdrawal from the EU on existing transport legislation FTA - March 2016 EU areas of responsibility The EU Treaties grant specific responsibilities to the EU on behalf of EU Member States, such as the UK or Ireland. The EU is for instance responsible for negotiating trade agreements with third countries (such as the US or China), customs policy and competition rules. There are also areas of shared responsibility with Member States, for instance in the field of transportation law. Beyond regulation, the EU can also provide funding, for instance towards innovation or transport infrastructure, 1 and facilitate the exchange of best practices amongst Member States, regional authorities and stakeholders . The table below provides an overview of the EU’s competences in areas of greater relevance to FTA members: Exclusive EU competence Shared competence with Member States Supporting competence (to support, coordinate or complement national action) - Customs union;; EU competence only if the EU decides to - Skills - Competition rules necessary for the functioning of intervene in this field: - Industry the internal market;; - Internal market - Administrative cooperation - Common commercial policy;; - Environment - Conclusion of certain international agreements. - Transport - Energy EU and Member States may act: - Research and technology EU can coordinate or add to national rules: - Economic policy - Employment (with UK opt-outs on working time) - Social policy (with UK opt-outs)

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Source: Consolidated version of the Treaty on European Union and the Treaty on the functioning of the European Union – Article 50 - Link

Leaving the EU would not place the UK in a legislative vacuum. It is important to remember that in certain areas of legislation, even after withdrawal from the EU, the UK would still be subject to a range of other international treaties and agreements. Some of these are based on EU standards that have simply been adopted by international bodies. In other cases, EU law has simply met the requirements of these wider treaties to which the UK would remain subject even after withdrawal from the EU. EU law and national law: basic principles Regulations have “direct effect” as a result of the European Communities Act 1972, this means that no further action is required by the Government for the requirements of the Regulation to become law in the UK. Likewise, a "decision" is binding on those to whom it is addressed (e.g. an EU country or an individual company) and is directly applicable. Directives, on the other hand, give “direction” to Governments that they must amend domestic law so that the outcome of the Directive is achieved. This therefore means that issues in force through a Directive of the EU are made law by discrete regulations in the UK and, where appropriate Scotland, Wales and Northern Ireland. Potential effects of Brexit It is assumed that part of the process of withdrawal from the EU would be the amendment or annulment of the 1972 Act – although this would probably only happen 2 upon completion of the negotiations of the withdrawal agreement, to avoid being in breach of EU and international law, as indicated by the UK Government . Annulment of the 1972 Act would have the effect that any laws established through EU regulations would, at a stroke, be dis-applied. However any laws established through EU directives would still have the domestic implementing legislation in force, although the Government would now be able to amend or annul such legislation as it saw fit. It is worth noting that Government could decide to keep certain provisions in place and to review and ‘unpick’ legislation coming from the EU in a more gradual manner, potentially adopting transitional measures. Changes might therefore not all happen at once. It is also worth noting that most EU trade partners have to implement some EU rules in order to gain access to the EU market (such as Switzerland or Norway, for instance), and the UK could therefore need to retain some EU provisions in order to retain access to the EU single market. The UK Government considers that the complexity of the negotiations, and the need for the UK to negotiate adequate access to the Single Market after it leaves the 3 EU, would make it difficult to complete a successful negotiation before the two year deadline expired . Any extension to the two year period set out in the Treaty would require the agreement of all 27 remaining EU Member States (see attached infographic for an overview of the procedure in case of Brexit). Withdrawal for the EU would also not mean that only UK law would apply, considering that the UK would also need to apply UN and WTO rules, for instance, regardless of its EU membership status. You will find below an overview of the most relevant EU pieces of legislation which would cease to apply following an annulment to the 1972 Act. The list is non exhaustive and other measures in the field of competition or freedom of movement for instance would also need to be considered as part of the exit agreement. It is also worth noting that besides legislation and trade deals, the UK would also need to negotiate an agreement with the EU for UK companies and organisations to be able to remain beneficiaries of EU funds (for R&D, innovation, environmental adaptation or transport infrastructure, for instance). 2 3

Source: HM Government Cabinet Office - The process for withdrawing from the European Union, 29 February 2016 – link Source: HM Government Cabinet Office - The process for withdrawing from the European Union, 29 February 2016 – link

Road Legislation

Regulation / Directive

Effect of Brexit

Alternative legislation

Drivers hours

Regulation

Regulation 561/2006 would dis-apply

UK is signatory to AETR which has adopted the requirements of 561/2006

Tachograph

Regulation


UK is signatory to AETR which has adopted the requirements of 651/2014

Working Time

Directive

The Road Transport (Working Time) Regulations 2005 would remain in domestic legislation

Driver CPC

Directive

The Vehicle Drivers (Certificate of Professional Competence) Regulations 2007 would remain in domestic legislation

UK is signatory to AETR which has adopted the requirements of 2003/59/EC

Vehicle Type Approval

Directive and Regulation

Directive 97/27/EC and implementing measures Regulation 661/2009 and 1230/2012 would dis- apply

UNECE

Weights and Dimensions / Construction and Use

Directive

The Road Vehicles (Construction and Use) Regulations 1986 would remain in domestic legislation

The Road Vehicles (Authorised Weight) Regulations 1998 would remain in domestic legislation Driving Licence

Directive

2006/126/EC would dis-apply

Directive incorporated into multiple GB and NI legislation. Directive covers - Driving Instructor standards, minimum test vehicle requirements

licensing and medical standards, - includes Road Traffic Act 1988, Motor Vehicle (Driving Licences) Regulations 1999, Motor Vehicle (Driving Licences) Regulations (Northern Ireland) 1996. Operator Licensing

Regulation


Goods Vehicles (Licensing of Operators) Act 1995

Dangerous Goods

International Agreement

UK is signatory to the International Carriage of Dangerous Goods by Road (ADR) Agreement

Road worthiness testing

Directive

Directive 2014/45/EU on periodic road worthiness tests would dis-apply

MOT legislation would remain in force

Directive 2014/47/EU on technical roadside inspections would dis-apply Directive 2014/46/EU on vehicle registration documents would dis-apply Road Charging

Directive 2011/76/EC on charging for infrastructure HGV Road User Levy Act 2013 would remain in would dis-apply force Directive 2004/52/EC on interoperable tolling would dis-apply Council Directive 2003/96/EC on minimum levels of fuel taxation would dis-apply

International market access / Cabotage

Regulation 1072/09 would dis-apply. Conditions to permit international transport and non-UK cabotage would need to be agreed.

Rail Legislation


Effect of Brexit


Single European Railway Area

Directive

Dis-applied

None.

Safety on the Community Railways

Directive

Dis-applied

Health and Safety at Work Act (GB), Health and Safety at Work (Northern Ireland) Order, Railways and Other Guided Transport Systems Regulations

European Railway Agency

Regulation

Control passes back to UK

Rail Freight Corridors

Regulation

Regulation EC 913/2010 on a European rail network for competitive freight could dis-apply

None

Interoperability (INF TSI, WAG TSI, NOISE TSI, TAF TSI, CCS TSI & ERTMS)

Directive

Interoperability requirements would not apply

None

Non-road mobile machinery

Directive

UK could retrofit older design new build power units to locomotives

Domestic emissions legislation?

There could be issues over freight track access The UK would become a ‘third country’ and charging as the EU Directive principle of "Marginal" access to British operators on the EU market cost would potentially disappear from UK might be limited. legislation. The same would go for principles related to access rights or independent regulation

Maritime Legislation


Effect of Brexit


TFEU Article 100(2) TFEU provides that the European Parliament and the Council may lay down measures for sea and air transport.

No longer applies

None

Common Maritime Policy 1986 – single market for shipping services

N.A.

Would not apply to UK companies

UK companies no longer in single maritime market

Maritime cabotage

Regulation

No longer applies.

None. UK maritime companies would no longer have cabotage rights in EU (and vice versa).

Shipping emissions

Directive 2005/33/EC

Would not apply, but UK would have to transpose IMO emission rules into national law.

IMO emissions rules would still apply to all ships under MARPOL Convention so UK would have to amend domestic legislation accordingly.

CO2 Reporting (MRV)

Regulation

Still applies to any ships trading on routes to and from the EU.

Any scheme agreed under IMO SOLAS convention would apply.

Maritime agreements with third countries (such as China)

Through exercise of external competence under TFEU

No longer applies.

UK itself becomes a “third country” and may need to agree a maritime agreement with the EU and other countries.

Aviation Legislation


Effect of Brexit


TFEU Article 100(2) provides that the European Parliament and the Council may lay down measures for sea and air transport.

TFEU

No longer applies

None

Air service agreements with partner countries (incl. Open skies agreement with the US)

Article 218 (international agreements) & Article 100 (2) TFEU

No longer applies

UK would become a partner country and would need to negotiate an air service agreement with the EU.

Competition

TFEU Articles 101 and 102

No longer applies.

None. To do business within the EU, UK based airlines would still need to comply with EU regulations. Merger/acquisition rules would not apply.

State Aid

TFEU Article 107

No longer applies.

All state aid requirements would dis-apply, not only in aviation.

Competition (concerted Regulation practices in the aviation sector)

No longer applies.

UK would apply domestic competition rules, potentially administered by CAA / CMA.

ETS (Emission Trading System)

Unclear given that a) this is a Directive, so normally would require removal from UK law, but b) UK would no longer be part of the EU so

UK domestic ETS scheme could be established

Directive(s)

perhaps would be immediately excluded from this system Common rules for the operation of air services

Regulation

Would not apply

None. UK would need to set up its own system, administrated by the CAA

Airport charges

Directive

Would continue to apply until removed from UK law UK would need to set up its own system, administrated by the CAA (which in this case would need to expand its economic regulator role beyond its current jurisdiction of Heathrow and Gatwick).

Transparent and non- discriminatory allocation of airport take-off and landing slots

Regulation

Would not apply

UK would need to set up its own system, administrated by the CAA

Environment (all modes of transport)


Effect of Brexit


2030 climate & energy framework

Council Conclusions / EU submission to UNFCCC

Only UK targets would apply

Effort Sharing

Decision

Only UK targets would apply

Climate Change Act

Fuel Quality

Directive

No UK equivalent but the UK would most probably keep following EU standards for petrol and diesel

Energy efficiency

Directive

The UK would most probably retain ambitious targets, based on the Climate Change Act. ESOS would probably continue to exist.

Climate Change Act – carbon reduction commitments and carbon levy

City level local emissions

Directive

EU requirements in UK cities would cease to have force – therefore infraction proceedings would no longer apply

F-gases

Regulation

UK no longer required to cut F-Gas emissions by two thirds by 2030 compared to 2014 levels

Environmental Noise Directive (incl. noise generated by transport operations)

Directive

UK no longer required to prepare and publish noise Environmental Protection Act management plans for towns/cities every five years – but as no set targets, no change in actions results

National Emissions Ceiling Directive

UK no longer required to meet national level target reductions for non-climate change emissions by 2030

Trade and customs


Effect of Brexit


Ireland

TFEU & bi-lateral Northern Ireland would be confronted with difficult WTO agreements and bi-lateral agreements with agreements issues about the relationship with Ireland. Outside Ireland the EU’s Customs Union, it would be necessary to impose customs checks on the movement of goods across the border. Questions would also need to be answered about the Common Travel Area which covers the movement of people,

which could have an impact on cross-border cooperation and trade. For wider consequences, see below (EU internal market) EU internal market

TFEU Article 3(3) UK leaves the EU internal market

WTO agreements (but not specific to the UK/EU relationship) The UK would need to negotiate a new trading and customs relationship with the EU as well as access to the EU single market. Such agreement could take different forms4: • Agreement focused solely on trade: such an agreement would need to be approved by the European Parliament and a qualified majority of the Council. • Full association agreement providing for trade and wider co-operation: such an agreement would need to be agreed by the European Parliament and unanimously by the Council. • Mixed agreement: these are agreements between the EU and third countries that contain matters of EU competence (for example, trade matters, which is an exclusive EU competence) and Member State competence (for example, foreign policy). Mixed agreements require

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Source: HM Government Cabinet Office - The process for withdrawing from the European Union, 29 February 2016

ratification by both the European Union (in the Council of Ministers and the European Parliament) and by the 28 Member States in accordance with their national procedures for the ratification of such agreements. Some Member States, such as Belgium, have national rules for the ratification of such agreements that include both national parliaments and regional parliaments. Free movement of goods: Customs union and ban on restrictions on import/export of goods within the EU

TFEU Articles 28-37

UK no longer has access to the free movement of goods within the EU. Customs checks would be required for import/export to EU countries. EU countries could restrict imports of UK products (and vice versa).

WTO agreements (but not specific to the UK/EU relationship) In the event of Brexit the UK would need to negotiate a new trading and customs relationship with the EU.

Note: the current balance of competence means that customs procedures are agreed at EU level, whilst the UK Government manages and organises its own customs administration and sets its own penalties for customs offences. Union Customs Code

Regulation (EU) No 952/2013

Would not be applicable as the UK would set its own customs rules.

WTO agreements (but not specific to the UK/EU relationship) The UCC sets out the rules for importing and exporting goods to and from non-EU countries, and impose legal requirements and obligations on importers and exporters.

Trade agreements (see here for full overview)

TFEU Article 207 UK would need to negotiate new trading relationships (e.g. tariffs) with all other countries (including the EU itself).

None. As well as having sole right to initiate customs legislation, exclusive competence also means that the Commission enters into agreements on customs union matters with non-EU countries, such as agreements to extend preferential duty rates to goods originating in those countries, and imposes protectionist measures against goods originating outside the EU, such as anti-dumping and countervailing duties.