Brexit briefing | 14 Oct 2020 |

Brexit: how will any EU-UK free trade agreement deal with movement of people?

Parties to free trade agreements (FTAs) typically recognise that movement of people is necessary to facilitate trade, particularly for services businesses. However, they are often reluctant to dispense with requirements imposed by their own domestic immigration regimes. Based on the draft texts published by the UK and the EU earlier this year, the proposed EU-UK FTA is unlikely to be an exception to this general rule. This means that business travel between the UK and the EU will probably be subject to additional red tape from 1 January 2021, even if there is a deal.

Short term business visitors

Both drafts contain provisions allowing "short term business visitors" to travel without work permits or the imposition of an "economic needs test" – which is obviously welcome from a business perspective. However, the list of activities which those visitors can undertake is likely to be extremely limited.

SHORT TERM BUSINESS VISITORS: LIKELY PERMITTED ACTIVITIES

Neither draft contains proposed wording on permitted activities, but the equivalent provisions in the EU-Canada FTA merely allow visits for the purposes of, for example, negotiating contracts, undertaking market research or receipt of (but not delivery of) training. Subject to minor exceptions, they do not cover the performance of any services to be carried out by the business visitor - so where, for example, a contract has been concluded by a UK business visitor by travelling to meet the customer in the EU, the expectation would be that the contract would actually be performed by staff back in the UK. In terms of length of stay, we would not expect the draft FTA to go any further than the current Schengen position for non-EU visitors i.e. no longer than 90 days in every 180 days.

Furthermore, as explained in this briefing, even though a work permit may not be required, short term business visitors are likely to have to comply with new passport and border requirements when entering the EU after 1 January 2021.

Other permitted business visitors

Both drafts also recognise a number of other categories of business visitor who may be allowed to actually perform services and/or benefit from a longer stay. Although this too is welcome from a business perspective, work permits will generally be required and Member State authorities may need to be satisfied that a range of other conditions are met. In practice, this means that individuals in these categories will face significant additional red tape and employers will face new constraints on which staff they can deploy. Examples include:

Contractual service suppliers: these provisions are essentially designed to allow staff of a UK service provider to perform a contract in the EU (or vice versa) on behalf of their employer. There are typically limits on the sectors covered by this and the individuals themselves will be expected to meet minimum requirements as regards experience (3 years in both drafts) and relevant qualifications. This effectively means that junior staff cannot be deployed on this type of work.
Intra-corporate transferees: these provisions are designed to allow for internal secondments (e.g. within a company's group) and may permit stays of several years. However, "intra-corporate transferee" is usually limited to managers, specialists and trainees; if the staff you wish to second do not readily fit into these categories, it may be difficult to take advantage of these provisions.

NO GENERAL RIGHT FOR INDIVIDUALS TO WORK IN EU/UK

Beyond these provisions, an EU-UK FTA is very unlikely to say anything about giving individual citizens the right to work in the EU or the UK, as the case may be. Such rights will be a matter for each country's domestic immigration regime. A significant number of UK businesses have historically relied heavily on EU citizens who travelled to the UK to look for work. Their ability to do so in future is likely to be heavily constrained by the UK's post-Brexit approach to immigration from the rest of the world, including the EU.

What if there's no deal?

If there is no deal, then the UK and EU will fall back on the commitments they have made under the WTO's services regime as regards both short term business visitors and other categories, such as contractual service suppliers and intra-corporate transferees. This is helpful in the sense that the lack of deal does not mean that business travel to the EU will be entirely at the discretion of EU Member States – they will still be constrained by the EU's WTO commitments, which require them to maintain a certain level of openness.

Indeed, although we would expect the provisions of any EU-UK FTA to go somewhat further that these WTO commitments, in practice, businesses may not actually notice much difference. This is because many countries often go further than their WTO commitments actually require. For example, the EU's commitments for short term business visitors only require EU Member States to allow a maximum stay of 3 months in every 12 month period – but in practice, the rules for non-EU business visitors to the Schengen area stipulate a maximum stay of 90 days in every 180 days, which is effectively double the WTO commitment. On the issue of length of stay, the main "value add" from a deal is likely to be a commitment by the EU not to reduce its current levels of openness with regard to non-EU citizens visiting the EU for business purposes. Similarly, whilst a deal may expand somewhat on the scope of the various categories of business visitor outlined above, it is unlikely to address the fundamental constraints on their use – as the underlying concepts are largely derived from WTO commitments.