JOINT DECLARATION ON FINANCIAL SERVICES REGULATORY COOPERATION BETWEEN THE EUROPEAN UNION AND THE UNITED KINGDOM

1.

The Union and United Kingdom agree to establish structured regulatory cooperation on financial services, with the aim of establishing a durable and stable relationship between autonomous jurisdictions. Based on a shared commitment to preserve financial stability, market integrity, and the protection of investors and consumers, these arrangements will allow for: — bilateral exchanges of views and analysis relating to regulatory initiatives and other issues of interest; — transparency and appropriate dialogue in the process of adoption, suspension and withdrawal of equivalence decisions; and — enhanced cooperation and coordination including in international bodies as appropriate.

2.

Both Parties will, by March 2021, agree a Memorandum of Understanding establishing the framework for this cooperation. The Parties will discuss, inter alia, how to move forward on both sides with equivalence determinations between the Union and United Kingdom, without prejudice to the unilateral and autonomous decision-making process of each side.

JOINT POLITICAL DECLARATION ON COUNTERING HARMFUL TAX REGIMES

The European Union (1) and the United Kingdom (the ‘Participants’) endorse the following Joint Political Declaration on Countering Harmful Tax Regimes.

The Participants, reflecting the global principles of fair tax competition, affirm their commitment to countering harmful tax regimes, in particular those that may facilitate base erosion and profit shifting in line with Action 5 of the OECD Base Erosion and Profit Shifting (BEPS) Action Plan. In this context, the Participants affirm their commitment to applying the principles on countering harmful tax regimes in accordance with this Joint Political Declaration.

Harmful tax regimes cover business taxation regimes that affect or may affect in a significant way the location of business activity, including the location of groups of companies, within the Participants. Tax regimes include both laws or regulations and administrative practices.

If a tax regime meets the gateway criterion of imposing a significantly lower effective level of taxation than those levels which generally apply in the Participants, including zero taxation, it should be considered potentially harmful. Such a level of taxation may operate by virtue of the nominal tax rate, the tax base or any other relevant factor.

In this context, and considering the approach set out at the global level, when assessing whether a business taxation regime is harmful, account should be taken of whether one or more of the following key factors apply:

(a)	whether advantages are ring-fenced from the domestic economy so that they do not affect the national tax base or are accorded only to non-residents;

(b)	whether the regime granting the advantages fails to require any substantial economic activity and substantial economic presence within the Participant offering such tax advantages;

(c)	whether the rules for profit determination in respect of activities within a multinational group of companies departs from internationally accepted principles, in particular the rules agreed upon within the OECD;

(d)	whether the tax regime lacks transparency, including where legal provisions are relaxed at administrative level in a non-transparent way or where there is no effective exchange of information with respect to the regime.

The Participants should encourage, within the framework of their constitutional arrangements, the application of these principles in the territories for which they have special responsibilities or taxation prerogatives.

The Participants should hold an annual dialogue to discuss issues in relation to the application of these principles.

JOINT DECLARATION OF THE EUROPEAN UNION AND THE UNITED KINGDOM ON MONETARY POLICIES AND SUBSIDY CONTROL

The Parties confirm their mutual understanding that activities conducted by a central bank in pursuit of monetary policies do not fall within the scope of Chapter 3 of Title XI of Heading One of Part Two of the Trade and Cooperation Agreement between the European Union and the United Kingdom.

JOINT DECLARATION ON SUBSIDY CONTROL POLICIES

The European Union and the United Kingdom (‘the Participants’) endorse the following Political Declaration on Subsidy Control Policies.

The guidance in this joint declaration represents the Participants’ shared understanding of the appropriate subsidy policies in the areas set up below.

While it is not binding on the Participants, they may take this guidance into consideration in their respective systems of subsidy control.

The Participants may agree to update this guidance.

Subsidies for the development of disadvantaged areas

1.

Subsidies may be granted for the development of disadvantaged or deprived areas or regions. When determining the amount of subsidy, the following may be taken into account: — the socio-economic situation of the disadvantaged area concerned; — the size of the beneficiary; and — the size of the investment project.

2.

The beneficiary should provide its own substantial contribution to the investment costs. The subsidy should not have as its main purpose or effect to incentivise the beneficiary to transfer the same or a similar activity from the territory of one Party to the territory of the other Party.

Transport

1.

Subsidies to airports for infrastructure investments and operating costs may be granted taking into account the size of the airport in terms of annual passenger volume. In order to receive subsidies to fund operating costs, an airport, other than a small regional airport, should demonstrate its ability to ensure future viability within a period of time which would allow for the subsidy to be progressively phased out.

2.

Subsidies to road infrastructure projects may be granted if they are not designed selectively to benefit an individual economic actor or sector, but instead provide benefits to society at large. When granting the subsidy, it should be ensured that open access to infrastructure is available to all users on a non-discriminatory basis (2).

3.

Subsidies to ports may be granted for dredging or for infrastructure projects if they are limited to the minimum amount necessary to commence the project.

Research and development

Subsidies may be granted for research and development activities (3). This includes fundamental research, industrial research and experimental development, in particular the development of new and highly innovative technology which drives productivity growth and competitiveness, if they are necessary, proportionate, and do not have as their main purpose or effect the transfer or closure of such activities in the territory of the other Party. Subsidies may also be granted in connection with other initiatives, such as for new production processes, relevant infrastructure, innovation clusters and digital hubs. The amount of subsidy should reflect, amongst other factors, the risk and amount of technological innovation involved in the project, how close the project is to the market and the project’s contribution to knowledge generation.

JOINT DECLARATION BY THE UNION AND THE UNITED KINGDOM ON ANNEX 29

The Parties understand that the objective of maximising the benefits of trade referred to in Annex 29 means that, within the constraints set out in that Annex, the trading arrangements:

—	should be as efficient as possible; and

—	should, under normal circumstances, result in flows across electricity interconnectors being consistent with the prices in the Parties’ day-ahead markets.

JOINT DECLARATION ON ARTICLE 412 AND ARTICLE 415

The Parties confirm their common understanding that:

1.

Article 412 and Article 415 are not mutually exclusive. In particular, it is not excluded that a security interest of a Party qualifies simultaneously as an ‘essential security interest’ for the purposes of Article 415 and as a matter of ‘public security’ or ‘public order’ for the purposes of Article 412.

2.

Article 412 and Article 415, including in particular the terms ‘essential security interests’, ‘public security’, ‘public morals’ and ‘public order’ are to be interpreted in accordance with the rules of interpretation of the Trade and Cooperation Agreement between the European Union and the United Kingdom, as set out in Article 4 and Article 516.

JOINT POLITICAL DECLARATION ON ROAD HAULIERS

The Parties note that while the Trade and Cooperation Agreement between the European Union and the United Kingdom does not deal with visa or border arrangements for road hauliers operating in the territory of the other party, the good and efficient management of visa and border arrangements for road hauliers is important for the movement of goods, in particular across the United Kingdom-Union border.

To this end, and without prejudice of the rights of each Party to regulate the entry of natural persons into, or their temporary stay in, its territory, the Parties agree to facilitate appropriately within their respective laws the entry and temporary stay of drivers carrying out the activities permitted under Title I of Heading Three of Part Two of this Agreement.

JOINT POLITICAL DECLARATION ON ASYLUM AND RETURNS

While the Trade and Cooperation Agreement between the European Union and the United Kingdom does not include provisions on asylum, returns, family reunion for unaccompanied minors, or illegal migration, the Parties note the importance of good management of migratory flows, and recognise the special circumstances arising from the juxtaposed control arrangements, roll-on roll-off ferry services, the Channel Fixed Link and the Common Travel Area.

To this end, the Parties take note of the United Kingdom’s intention to engage in bilateral discussions with the most concerned Member States to discuss suitable practical arrangements on asylum, family reunion for unaccompanied minors or illegal migration, in accordance with the Parties’ respective laws and regulations.

JOINT POLITICAL DECLARATION ON TITLE III OF PART THREE

The Parties acknowledge that the effective use of passenger name record (PNR) data concerning modes of transport other than flights, such as maritime, rail and road carriers, presents operational value for the prevention, detection, investigation and prosecution of terrorism and serious crime, and declare their intention to review and, if necessary, extend the agreement reached in Title III of Part Three of the Trade and Cooperation Agreement between the European Union and the United Kingdom if the Union establishes an internal legal framework for the transfer and processing of PNR data for other modes of transport.

The Agreement does not affect the possibility for the Member States and the United Kingdom to enter into and operate bilateral agreements for a system for collecting and processing PNR data from transportation providers other than those specified in the Agreement, provided that the Member States act in compliance with Union law.

JOINT POLITICAL DECLARATION ON TITLE VII OF PART THREE

Article 597 of Title VII of Part Three provides that cooperation on surrender must be necessary and proportionate, taking into account the rights of the requested person and the interests of the victims, and having regard to the seriousness of the act, the likely penalty that would be imposed and the possibility of a State taking measures less coercive than the surrender of the requested person, particularly with a view to avoiding unnecessarily long periods of pre-trial detention.

The principle of proportionality is relevant throughout the process leading to the surrender decision set out in Title VII. Where the executing judicial authority has concerns about the principle of proportionality, it shall request the necessary supplementary information to enable the issuing judicial authority to set out its views on the application of the principle of proportionality.

Both Parties note that Articles 597 and 613 enable the competent judicial authorities of the States to consider proportionality and the possible duration of pre-trial detention when implementing Title VII, and note that this is consistent with their respective domestic laws.

JOINT POLITICAL DECLARATION ON TITLE IX OF PART THREE

The Parties acknowledge that it is important for employers to have information regarding the existence of criminal convictions and regarding any relevant disqualifications arising from such convictions, in relation to persons they recruit for professional or organised voluntary activities that involve direct and regular contacts with vulnerable adults. The Parties declare their intention to review and, if necessary, extend Title IX of Part Three if the Union amends its legal framework in this respect.

JOINT EU-UK DECLARATION ON THE EXCHANGE AND PROTECTION OF CLASSIFIED INFORMATION

The Parties acknowledge the importance of entering as soon as possible into arrangements that enable the exchange of classified information between the European Union and the United Kingdom. In this regard, the Parties will exert their best endeavours to complete negotiations on the Security of Information Agreement’s implementing arrangement, as soon as it is reasonably practicable, to allow the Security of Information Agreement to apply, as required under Article 19(2) of the Agreement. In the meantime, the Parties may exchange classified information, in accordance with their respective laws and regulations.

JOINT DECLARATION ON PARTICIPATION IN UNION PROGRAMMES AND ACCESS TO PROGRAMME SERVICES

The Parties recognise the mutual benefit in cooperation in areas of shared interest, such as science, research and innovation, nuclear research and space. To encourage future cooperation in these areas, it is the Parties’ intention to establish a formal basis for future cooperation in the form of the participation of the United Kingdom in the corresponding Union programmes under fair and appropriate conditions and, where appropriate, in the form of access to certain services provided under Union programmes.

The Parties acknowledge that the text of Protocol I ‘Programmes and activities in which the United Kingdom participates’ establishing an association of the United Kingdom for participation in certain Union programmes and activities, and Protocol II ‘on access of the United Kingdom to certain services provided under Union programmes and activities’ could not be finalised during the negotiations of the Trade and Cooperation Agreement between the European Union and the United Kingdom, as the Multiannual Financial Framework and corresponding Union legal instruments have not yet been adopted at the time of signature of the Agreement.

The Parties affirm that the draft protocols set out below have been agreed in principle and will be submitted to the Specialised Committee on Participation in Union Programmes for discussion and adoption. The United Kingdom and European Union reserve their right to reconsider participation in the programmes, activities and services listed in Protocols [I and II] before they are adopted since the legal instruments governing the Union programmes and activities may be subject to change. The draft protocols may also need to be amended to ensure their compliance with these instruments as adopted.

It is the Parties’ firm intention that the Specialised Committee on Participation in Union Programmes will adopt the Protocols at the earliest opportunity to allow their implementation as soon as possible, in particular with the ambition that United Kingdom entities would be able to participate from the beginning of the programmes and activities identified, ensuring relevant arrangements and agreements are in place, insofar as possible and in accordance with Union legislation.

The Parties also recall their commitment to the PEACE+ programme which will be the subject of a separate financing agreement.

DRAFT PROTOCOL I

Programmes and activities in which the United Kingdom participates

DRAFT PROTOCOL II

On access of the United Kingdom to services established under certain Union programmes and activities in which the United Kingdom does not participate

DECLARATION ON THE ADOPTION OF ADEQUACY DECISIONS WITH RESPECT TO THE UNITED KINGDOM

The Parties take note of the European Commission’s intention to promptly launch the procedure for the adoption of adequacy decisions with respect to the UK under the General Data Protection Regulation and the Law Enforcement Directive, and its intention to work closely to that end with the other bodies and institutions involved in the relevant decision-making procedure.

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(1)  For the purposes of the commitments in this Declaration, with respect to the European Union, references to Participants are understood as being to the European Union, its Member States, or the European Union and its Member States, as the case may be.

(2)  For this purpose, discrimination means that comparable situations are treated differently and the differentiation is not objectively justified.

(3)  Research and Development as defined in the OECD Frascati Manual.

(4)  [insert OJ reference].

(5)  [insert OJ reference].

(6)  [insert OJ reference].

(7)  [insert OJ reference].

(8)  [insert OJ reference] (as amended).

(9)  References to ‘participating countries’ to be finalised in line with terminology of basic acts when adopted.

(10)   OJ L 97, 9.4.2008.

(11)  [OJ L …].

(12)  [OJ L …; COM(2020) 441].

(13)  Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).

(14)   ‘Other actions’ might include prizes, financial instruments, provision of technical/scientific services by JRC, Subscriptions (OECD, Eureka, IPEEC, IEA, …), delegation agreements, Experts (evaluators, monitoring of projects).

(15)  International organisations would only be considered as non-intervention costs if they are final beneficiaries. This will not apply where an international organization is a coordinator of a project (distributing funds to other coordinators).

(16)  This definition shall be replaced by the definition from a legislative act with a reference in a footnote to this legislative act in the final version of the protocol (last definition of the EIC Fund in Horizon 2020 is decision C(2020) 4001 of the Commission amending decision C(2019) 5323). In case there is no definition available in relation with Horizon Europe when the protocol is finalised, the definition might have to be revisited.

(17)  Regulation XXX of the European Parliament and of the Council establishing the space programme of the Union and the European Union Agency for the Space Programme and repealing Regulations (EU) No 912/2010, (EU) No 1285/2013, (EU) No 377/2014 and Decision 541/2014/EU[COM/2018/447 final] [OJ L …].

(18)  This is subject to the final condition of the basic act and provided that both Parties agree on the condition for the provision of the SST service.

(19)  This is subject to the final condition of the basic act and provided that both Parties agree on the condition for the provision of the SST service.