UK out of EU
7 February 2019

Various measures related to the United Kingdom’s withdrawal from the European Union

During the Council of Ministers meeting on 6 February 2019, the Government presented several measures related to a potential no-deal Brexit, with regard to the rights of citizens, financial services and road transport.

 
These measures, taken by Ordinances, are taken subject to reciprocity from the United Kingdom: a decree may suspend the derogatory measures relating to right of residence, Revenu de solidarité active (income support) and healthcare coverage, if the Government finds that the United Kingdom does not grant to French nationals present on its soil the same level of treatment as that provided for in this Ordinance or in the Ordinance relating to preparation for the United Kingdom’s withdrawal from the European Union with regard to road transport for the movement of people and goods and to security in the Channel Tunnel.

Right of entry and residence, social rights and social benefits

  • With regard to the right of entry and residence, a special system is established for British nationals who were already legally residing in France at the time of the United Kingdom’s withdrawal. A period of up to one year is provided for to enable such individuals to obtain a residence permit, and derogatory conditions for accessing such permits are put in place.
  • With regard to social rights and social benefits, British nationals who receive the Revenu de solidarité active living in France at the time of the United Kingdom’s withdrawal will continue to be eligible to do so for a period of one year. This measure ensures the continuity of healthcare coverage under current conditions which derive from European Union law, for a period of two years. Conditions that take into account, in France, insurance or employment periods completed in the United Kingdom, are also set out.
Several measures relate to carrying out a professional activity in France, the conditions of which would be affected by the United Kingdom’s exit from the European Union with no deal.

Financial services

These measures will ensure continuity in financing the economy. They supplement the measures taken at European level on the initiative of the European Commission.
  • Continuity of access for French entities to UK interbank settlement and settlement/delivery systems is guaranteed. To this end, in respect of French entities participating in these systems, the Ordinance applies the provisions of the Settlement Finality Directive (Directive 98/26/EC of 19 May 1998), which ensures the finality of settlements carried out through these systems.
  • Clarification of the rules applicable to insurance contracts validly entered into with UK insurers before the United Kingdom’s exit under the European Passport scheme. The obligation for insurers to fulfil these contracts is guaranteed, despite the loss of recognition of their approvals in France (the loss of the "passport"). It thus guarantees the right of insured persons to receive compensation in the event of a claim.
  • Clarification of the powers of the Autorité de contrôle prudentiel et de résolution (Prudential Supervision and Resolution Authority – ACPR) with respect to UK entities which have concluded contracts under the European Passport scheme.
  • Adaptations enabling the main framework contract for derivatives, the International Swaps and Derivatives Association (ISDA) framework contract, to operate under French law. These adaptations will allow actors concerned to adopt an ISDA framework contract under French law with the same characteristics as the framework contract under English law.
  • Definition of a substitution mechanism for framework contracts used for financial services. The proposal of a new framework convention shall be deemed to be accepted once the new framework contract is identical to the original framework contract, subject to the application of French law and the jurisdiction of the French courts.
  • Rules to ensure a smooth transition in the management of collective investments which must comply with investment ratios in European entities. UK securities will remain eligible, for a fixed period of time, in collective investment undertakings distributed through the Plans d’épargne en actions (Equity Savings Plans or PEAs) and Equity Savings Plans dedicated to the securities of SMEs and mid-caps (PEA SME), as well as for capital-investment funds obliged to conform to exposure ratios to European businesses.
  • The Autorité des marchés financiers (French Financial Markets Authority) is the competent authority responsible for supervising activities related to securitisation, in order to enable the securitisation market to continue operating under enhanced security conditions.

Road transport

The measures will allow, temporarily and subject to reciprocity, individuals settled in the United Kingdom, to carry out road transport operations for the movement of goods or people on national territory, on behalf of third parties or on their own account. This concerns operations between France and the United Kingdom, transit as well as the carrying out of cabotage operations. Furthermore, the Government will pay close attention to maintaining fair competition, particularly with regard to social matters. The United Kingdom’s adherence to the European Agreement concerning the Work of Crews of Vehicles engaged in International Road Transport provides, in this respect, guarantees with regard to resting times and driving times similar to those under European law.

Where applicable, these provisions will come into effect at the time of the United Kingdom’s withdrawal from the European Union with no deal, and will remain in force until 31 December 2019 at the latest, unless an agreement is reached with the United Kingdom in this area. If negotiations were to be opened with the United Kingdom on this point, such emergency measures could be extended until 31 December 2020 in order to see them through to their conclusion.

Since the continuity of passenger traffic through the Channel Tunnel is a major issue for France and the European continent, it is necessary to protect the existing legal framework concerning the security rules applicable to actors involved in operating the tunnel, as well as to passengers travelling to or from the United Kingdom.

In the context of the United Kingdom’s withdrawal from the European Union, given the practical consequences of a no-deal Brexit on the flow of traffic and on security risks, and in accordance with its international commitments, France is therefore adapting its national law so that these security rules are enforceable and effectively strengthen security on the French side of the Channel Tunnel. These provisions will come into effect at the time of the United Kingdom’s withdrawal from the European Union with no deal.

For more information, please see the dedicated website www.brexit.gouv.fr.


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