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It has been 3 years since the referendum on Brexit was voted and many uncertainties remain to this day.
The British Government formally notified Brussels on the 29th of March 2017 of its decision to withdraw from the European Union (EU). In March 2018, the UK and the European Union agreed on a transitional period until the 31st of December 2020, subject to ratification of a withdrawal agreement between the EU and the UK.
As the British Parliament has already rejected the agreement several times, an extension of the exit deadline until the 31st of October 2019 has been agreed with the EU.
Recent Theresa May’s resignation adds additional uncertainty about the future in this context already difficult. For sure her successor would have to build a consensus in Parliament in order to avoid leaving the EU without any deal agreed.
What will be the consequences of Brexit for Switzerland?
To date, relations between Switzerland and the UK are mainly governed by the bilateral agreements concluded between Switzerland and the EU. Once the UK leaves the EU, these agreements will in principle no longer apply between Switzerland and the UK and will have to be replaced, in the long term, by other agreements, regardless of the conduct of negotiations between the UK and EU member States.
In April 2018, Switzerland decided that the bilateral agreements concluded between Switzerland and the EU would remain valid for relations between Switzerland and the UK during the applicable transitional period. . At the same time, Switzerland and the UK are preparing for the possibility of leaving the EU without an agreement (“No Deal”) in order to maintain, as far as possible, the existing rights and commitments between Switzerland and the UK.
In this context, these two countries have already concluded five agreements, including an agreement on citizens’ rights. These agreements will apply, if necessary, when the bilateral agreements between Switzerland and the EU no longer apply to the UK:
– From 1 November 2019, in the event of withdrawal from the UK without agreement,
– Or at least at the end of the transition period that would have been agreed.
Two scenarios are therefore possible:
1)Entry into force of the bilateral agreement on the maintenance of existing rights and the future application of the former bilateral social security agreement (entered into force in 1969, still in force for third-country nationals);
2)Application of all European regulations on a bilateral basis until the end of 2020 and negotiation of a new specific agreement under discussion between Switzerland and Great Britain, which would enter into force from 2021.
Implications in terms of immigration & social security
In the field of social security
Following the effective withdrawal of the UK from the EU, the Agreement between Switzerland and the EU on the Free Movement of Persons (ALCP) and Regulations (EC) No 883/2004 and No 987/2009 on the coordination of social security systems will no longer apply to the UK. Switzerland and the UK have therefore negotiated an agreement on citizens’ rights that protects, among other things, acquired social security rights.
The objective of the agreement is to ensure that people currently covered by the ALCP undergo as few changes as possible and that acquired rights are protected.
The agreement provides that Regulations (EC) No 883/2004 and (EC) No 987/2009 shall continue to apply to the following persons:
- Swiss nationals residing and working in the UK,
- British nationals residing and working in Switzerland,
- Swiss nationals residing in Switzerland & working in the UK,
- British nationals residing in the UK and working in Switzerland,
on the date of actual exit from the UK from the EU.
For these people, nothing changes as long as they are in a cross-border situation, i.e. as long as they are in contact with both States, whether because of their nationality, their activity or their place of residence.
In concrete terms, this means the following:
–The same State remains responsible for social insurance, collects contributions and pays benefits, without discrimination.
–Family benefits continue to be paid without restriction.
–In the event of unemployment after the date of entry into force of the agreement, entitlement to unemployment benefits shall be maintained. If necessary, the allowances can be exported for a certain period of time in order to seek employment in the other State.
–In the event of retirement after leaving the UK from the EU, entitlement to an old-age pension shall be maintained, in accordance with the conditions of national legislation. Periods of insurance completed in the other State shall, if necessary, be taken into account in order to meet the minimum period of insurance and the pension shall continue to be paid without restriction even if the person moves to the other State. Health insurance coverage is also guaranteed by one of the two States.
–Disability and survivors’ pensions are also paid if the beneficiary resides in the other country.
Regulations (EC) No 883/2004 and (EC) No 987/2009 also remain applicable to persons who are not or no longer in a cross-border situation, as long as they have the right to work or reside in the other State. These may include, for example, Swiss nationals who continue to work in the United Kingdom at the end of their secondment or those who have left their employment in the UK but continue to live there.
This agreement does not apply to persons travelling between Switzerland and the UK after the actual exit from the United Kingdom from the EU.
To date, it is not yet clear how bilateral social insurance coordination will be structured after the end of the application of the ALCP for people moving after the effective exit of the UK from the EU. If no new agreement is concluded, the 1969 bilateral social security agreement, which was suspended by the entry into force of the ALCP, will apply again to Swiss and British nationals.
In the field of immigration
In the field of the movement of persons, the agreement concluded aims to guarantee the rights that their respective nationals have acquired under the ALCP particularlyin particular as regards the right of residence and the recognition of professional qualifications.
As for social security, this agreement between Switzerland and the EU does not apply to Swiss and British citizens who wish to immigrate to the other state after the effective withdrawal of the UK from the EU. If no bilateral agreement is concluded between Switzerland and the UK, British nationals who wish to immigrate to Switzerland will have to comply with the provisions of the LEI (Legal Entity Identifier) and will therefore be subject to quotas. In this context, Switzerland decided in February 2019 to grant 3500 residence permits for British nationals.
Nevertheless we remain on the lookout for any new developments, particularly in the context of the European elections and the designation of a new prime Minister.
The information enclosed within the present newsletter are not exhaustive and do not cover necessarily all legal aspect of the subject and in no case can replace a legal professional advice. Copyrights are reserved, except with prior written consent.