March 2019
On 29 March 2017 the UK activated Article 50 of the EU Treaty notifying the other EU Member States of its decision to withdraw from the EU. This withdrawal will be in effect as of 30 March 2019.
The EU and the UK government had negotiated an agreement that included several transitory measures to smooth the effects of the withdrawal (so-called soft-Brexit). This agreement however was rejected by the British Parliament on 15 January 2019 and, although discussions are still ongoing, at the time of the drafting of this article, the possibility that the UK will withdraw from the EU without further agreements (the so-called hard-Brexit) is bigger than ever. For more information on the possible effects of a hard Brexit, we refer to the designated website of BDO UK (https://www.bdo.co.uk/en-gb/brexit) or the local BDO websites (https://www.bdo.be/nl-be/microsites/brexit/brexit-current-situation-outlook).
The European Commission has always encouraged EU Member States to prepare for contingency plans in case of a hard Brexit and advised them to enter into bilateral agreements with the UK to soften the effects of a hard Brexit. In the view of the European Commission, such agreements should be temporary and unilaterally revocable. Furthermore, they should not include the same conditions, rights and entitlements as under EU Membership or as under the withdrawal agreement rejected by the UK.
A number of EU Member States have already prepared for such agreements. The Belgian government, for instance, has introduced a draft bill with a broad series of rules aiming to alleviate the results of a hard Brexit. The proposed bill will therefore only come into effect if no last minute agreement is reached between the EU and the UK.
Both the EU and the UK are in agreement that the rights and legal position of EU nationals in the UK and UK citizens in EU Members States should be protected as much as possible and that the search for a solution should have the highest priority. Not surprisingly therefore, one of the topics that is covered by this draft bill is the situation of UK nationals living and working in Belgium. The main features of the draft bill are as follows:
The permission to reside on Belgian territory that have been delivered prior to 30 March will remain valid until the end of the transitional period (31 December 2020). Permits that expire during the transitional period can be extended until 31 December 2020.
Also, new requests filed between 30 March 2019 and 31 December 2020 will be assessed based on the rules and conditions that were applicable prior to Brexit.
Kindly note that the right to legally work in Belgium is not covered by this draft bill. Belgium’s position is that it will allow British nationals to legally work on Belgian territory without the need to apply for a work permit if the UK authorities are willing to accept identical treatment for Belgian nationals working in the UK. To date, such agreement has not been reached.
Within the EU, the rules that identify the applicable social security scheme and the rights and entitlements for internationally mobile employees are governed by the EU Regulations. Post Brexit, the UK will no longer be bound by this EU Regulation and the social security treatment of employees will, from that moment on, be governed by bilateral treaties that the UK may have signed with other countries.
Belgium and the UK signed a bilateral agreement on social security back in 1957, but its scope is too limited and the content lack clarity on some points. Therefore, the intention is to have this contract renegotiated. In order to allow both countries the necessary time for discussion, the present draft bill proposes the application of EU Regulations until 31 December 2020.
This provision will only enter into force on the basis of reciprocity, i.e. when the UK authorities also continue to apply the rules included in the EU regulations on Belgian citizens. The transitional period will end either on 31 December 2020 or when a new treaty is agreed.
Company’s employing UK citizens in EU countries are advised to assess the impact of Brexit on the ability of these employees and executives to legally live and work in the EU. Work Permits and residency permits may be required as from 29 March or after a period of transition. These requirements differ depending on the host country concerned and therefore, this matter should be investigated with great care. BDO immigration specialists are able to assist and advise on the most appropriate course of action.
Peter Wuyts
peter.wuyts@bdo.be