The Spanish Cabinet has submitted a report on plans for a no-deal exit of the UK from the EU, with a package of legislative and logistical measures and messages for citizens.
The United Kingdom gave formal notice on 29 March 2017 of its intention to leave the EU. The country will leave the Union and with become a de facto Third Country at 00:00 (CET) on 30 March 2019, as per the provisions of Article 50 of the Treaty on European Union. After a year and a half of negotiations, the EU and the UK reached an agreement, which was backed by the UK government on 14 November 2018 and confirmed by the European Council on 25 November. 25 November 2018 saw the opening of the process of ratification & signing of the agreement. It is still uncertain whether that process will be successful. Failure to ratify would mean a no-deal Brexit. Accordingly, the Spanish Cabinet has drawn up a report on planning for a potential no-deal exit of the UK from the EU.
This planning covers the possibility that the UK will leave the EU without reaching a withdrawal agreement with the rest of the Member States.
It contains measures of three types:
- Legislative measures: these take the form of a draft Royal Decree Law expected to be passed in February, which modifies certain regulatory points and envisages the adopting of further measures via regulatory channels.
- Logistical measures aimed at providing the staff and material resources needed to tackle a no-deal Brexit.
- Communication with citizens via a page on the website of the Office of the Prime Minister that provides direct information on what individuals and businesses should do to prepare themselves for the various potential scenarios.
The main points covered in the plan are the following:
1.- Rights of citizens:
- Brexit will mean the end of freedom of movement and labour of Spanish citizens in the UK and UK citizens in Spain. The government wishes to maintain their rights as as whole, considering that they made their life decisions on the basis of belief in the EU project. To that end it will set up a system under which UK citizens in Spain shift from being EU citizens to being legal residents in our country, and will adopt the measures needed to ensure Spaniards’ and Britons’ rights, social security, healthcare, recognition of professional qualifications, etc.
- The right to vote and stand in municipal elections will be recognised via a specific bilateral agreement as envisaged in Article 13 of the Spanish Constitution.
2.- Trade relations:
The UK will be leaving the Customs Union and the Internal Market and will switch to trading with the EU on terms set by the WTO. All EU legislation on goods imported from and exported to third countries will apply, including the payment of duties and taxes. Third country status will also mean that strict health and phytosanitary regulations will be applied to the UK. EU governments and institutions seek to facilitate the flow of goods between the UK and the EU insofar as is possible and desirable. Seminars are being arranged throughout Spain to help firms prepare for the new scenario, and aid to help them do so is envisaged.
3.- Particularly sensitive economic sectors:
- Air transport: this sector can be considered critical, given the huge flow of passengers between Spain and the UK (45 million passengers and 18 million tourists in 2017). The European Commission envisages measures within the scope of its authority to maintain basic air connections, which are currently being negotiated. Both the Commission and the Spanish government have informed operators of the need to adapt to a no-deal scenario. Spain advocates an ambitious form of contingency measures in this area, because the goal is to maintain air connections. In any event the government will seek to safeguard the interests of passengers within the scope of its authority.
- Financial services: withdrawal from the EU will mean that UK organisations will lose the passport required to provide financial services in the EU27. In view of the critical nature of this sector, the European Commission has proposed certain contingency measures. The government will supplement these with domestic measures.
- Agriculture and fishing: Apart from the preparations required at internal level, Spain also advocates the need to envisage specific aids for this sector at EU level, and to factor this new situation into the debate on the future of the CAP/CFP.
Gibraltar is a special case within the scope of the contingency measures for two reasons: on the one hand it benefits from selective application of EU treaties (it is not part of the Customs Union, the CAP, the CFP or the harmonised area for the application of VAT). On the other hand, Spain claims sovereignty over Gibraltar, and the government maintains that claim in full.
Gibraltar is excluded from the package of measures submitted by the Commission on 19 December last.
Domestic contingency measures concerned with Gibraltar will have two main objectives:
- To maintain the rights of our citizens, including the rights of our workers to receive pensions and social security benefits.
- To ensure that when EU law ceases to apply this does not result in conduct harmful to the interests of the EU and of Spain, such as trafficking and smuggling, tax evasion or the concealment of gains.
These objectives are envisaged in the bilateral agreements signed between the UK and Spain concerning Gibraltar and the Spanish Government wishes to see them remain in force whatever scenario emerges. In the event of a crash-out their application would need to be adjusted accordingly.
Pending agreements to be reached between the UK and the EU
Work permits, residence and non-lucrative residence; the obtaining of Spanish nationality for those who have lived in the country for more than 10 years; the tax advantages of the living donation of properties in Spain to their heirs before Brexit is completed and the social and healthcare situation following the withdrawal are just some of the issues that spark most doubts among UK citizens with interests in our country that will need to be settled by means of the agreements reached between the UK and the EU or by default between Madrid and London.
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