Brexit Bulletin: Brexit Update on EEA Migration — Post-Brexit Transition Period and MAC Interim Report

29 Mar, 2018

Brexit

The EU and U.K. have reached a provisional deal on a 21-month transition period to follow March 29, 2019 when the U.K. formally withdraws from the EU. The transition period is meant to avoid a cliff edge where European free movement rights are cut off overnight, and should give employers and individuals greater time to plan before any new U.K. immigration rules can come into force. However, the transition agreement cannot take effect until the wider EU-U.K. Withdrawal Agreement is finalized, which still faces considerable challenges.

The Migration Advisory Committee’s (MAC) interim report, published March 27, 2018, makes clear that while U.K. business responses are being considered, employers must wait until September 2018 for the MAC’s recommendations on the future of EEA migration into the U.K. and for greater insight into the legal position post-2020.

News Summary

The transition agreement clarifies that the length of the transition will be 21 months— from March 30, 2019 until December 31, 2020—and that during this period, EU citizens in the U.K. (and U.K. citizens in the EU) will continue to enjoy free movement on the same pre-Brexit terms. This means that EEA nationals and their family members (including third-country national family members) can continue to travel to and enter the U.K. without a visa, and can start working in the U.K., or indeed continue to work, without needing to obtain Tier 2 work permission. EEA nationals will likely be subject to light-touch registration procedures from Brexit Day forward, but can be reassured of their continued right to work until the end of 2020. At the end of the transition period, new U.K. immigration rules will come into force to accommodate third-country nationals and EEA nationals as part of a unified single U.K. legal system.

While BAL does not have any indication of the shape and basis for this future immigration regime, the MAC—tasked by the government in July 2017 to research the impact of EEA migration on the U.K. labor market and recommend future migration policy—has issued an interim report showing a heterogeneous response from U.K. businesses. U.K. employers have collectively voiced the business need for EEA migration to fill skills shortages and resolve recruitment issues in the U.K., indicated the negative impact that migration restrictions would have on the U.K. economy, and asserted that the current Tier 2 regime is not a suitable basis for future migration into low-, medium-, as well as high-skilled areas.

Employers must wait until September 2018 for the MAC’s recommendations on the future of EEA migration into the U.K. and for greater insight into the immigration system post-2020. However, the MAC has clarified that its measure of successful migration policy is one that leads to the highest quality of life for the resident population—and that it will carefully consider the balance of impacts rather than treating business requirements or a successful economy as the only means to that end. The MAC believes that employers should be prepared to compete for labor and invest in short- and long-term training, productivity innovations, and in wage increases to meet recruitment needs rather than rely on a migration-based business model.

Key Issues

The key provisions of the draft agreement on a post-Brexit transition arrangement, published March 19, are as follows:

Length of Transition
The U.K. will officially leave the EU on March 29, 2019. A transition period will last 21 months—March 30, 2019 through Dec. 31, 2020—to allow businesses and individuals time to prepare for new rules. The U.K. had asked for a longer transition period, but the transition agreement adopts the EU’s proposed time period.

Citizens’ rights
EEA nationals and their family members arriving in the U.K. (and U.K. citizens arriving in an EEA country) during the transition period, i.e. through 2020, will enjoy the same rights to free movement and eligibility for residency that they currently enjoy. These citizens will be eligible for permanent residency after five years of continuous residency in the host state, counting periods of legal residence or work both before and after the end of the transition period. Permanent residency may be lost through absence only if the absence exceeds five consecutive years.

Irish nationals
The close political relationship between Ireland and the U.K. predates the European Union. Irish nationals have automatic settled status in the U.K. which does not derive from EU law and therefore is unaffected by Brexit or the transitional period. Irish and U.K. citizens will retain full mobility and residency privileges in their respective countries under the Common Travel Area (CTA), and Irish citizens will not be required to register under any post-Brexit U.K. immigration system. The CTA arrangement allows Irish nationals to enter the U.K., work and reside on the basis of their passport alone and without obtaining any further immigration permission.

Residency documents
The U.K. may require that EEA nationals and their family members apply for a new residence status through “simple, transparent and user-friendly administrative procedures.” This means we can realistically expect some form of residence card regime to be introduced, likely based on the current non-mandatory EEA registration regime. The deadline for applying for any such status will be no less than six months after the transition period for those arriving in the U.K. before the end of the transition (or three months from the date of arrival for others, whichever is longer). Those who hold a valid permanent residence document before the end of the transition period will be able to exchange that document for a new residency document free of charge upon verifying their identity and undergoing a security check.

Ireland and Northern Ireland
One of the key obstacles to the U.K. Withdrawal Agreement is the Irish border issue. Northern Ireland is a part of the United Kingdom, but shares a 500 km land border with the Republic of Ireland, which will remain a member of the European Union and subject to EU regulations. A hard border between Northern Ireland and the Republic would not necessarily affect the free movement of people as right-to-work checks are performed by the employer and not by border officials, but the movement of goods across the border and customs arrangements are problematic. The political sensitivities are particularly acute in a region that has only recently emerged from years of violent unrest under a hard-won peace accord. While the matter continues to be negotiated, under the transition agreement, the fallback position—unless another arrangement is reached—is that Northern Ireland will continue to follow EU regulations in order to avoid incongruent rules and a hard border between Northern Ireland and the Republic of Ireland.

Preparing Your Company

With Brexit Day just one year away, the EU and U.K. have mostly resolved the issue of citizens’ rights, although the overall negotiations continue to create problems. Significantly, the U.K. government has agreed that EEA nationals will retain their mobility and residency rights until the end of the transition period on December 31, 2020, instead of Brexit Day. This important concession provides EEA nationals and their employers approximately two additional years of free movement to carry on “business as usual.”

Any planning for the legal regime post-2020 remains difficult, as the framework has yet to be designed and published. September 2018 should bring further guidance from the MAC on how best to project future requirements.

Companies are encouraged to work with their BAL professionals to prepare appropriate strategies for EEA employees. BAL continues to recommend that companies keep close track of their European workforce, and that EEA nationals in the U.K. apply for residency now, as they will be eligible for a streamlined process to exchange current permanent residency document for a new residency document after the end of the transition period.

Should you have any questions or require more information on how BAL can help with Brexit planning, please contact us at uk@balglobal.com.