Brexit: The UK's 'fair and serious' offer on citizens' rights - what does it mean for EEA nationals?

It had been hoped that the start of negotiations would finally lead to some clarity regarding the situation of EEA nationals in the UK and UK nationals in the EU, following a year of uncertainty over their status caused by the UK referendum outcome in June 2016. The Prime Minister has repeatedly said that she wanted to resolve the status of EU nationals at the outset of, or even before, the negotiations. Both sides have now published their proposals. However, there is less common ground in the two sides' position papers than might have been hoped. The situation consequently remains unclear in many respects but some conclusions can still be drawn.

The EU's position

On 12 June, the European Commission Task Force for the Preparation and Conduct of the Negotiations with the UK under Article 50 published a position paper on "Essential Principles on Citizens' Rights". The Commission broadly wants all EU citizens who are in the UK and all British citizens who are in the EU on the date of withdrawal, 29 March 2019, to keep all of their existing free movement rights in perpetuity. This would include the automatic acquisition of permanent residence rights after a continuous period of five years of legal residence. Such persons would not be required to obtain a residence document to evidence their rights. The proposal would apply to all EU nationals present at the date of withdrawal, however long they had been in the UK, and would allow them to bring their family members, regardless of nationality, to the UK after the date of withdrawal. The Commission also proposes that all recognised professional qualifications obtained in any of the current 28 EU Member States before the date of withdrawal would continue to be recognised after that date. The Court of Justice of the European Union (CJEU) would have full jurisdiction over the protection of citizens' rights in the Withdrawal agreement.

The UK's position

Ahead of the 19 June opening of negotiations, UK government sources suggested that it was about to make a 'very generous' offer giving EU nationals all the rights they currently enjoy.

On 22 June, the Prime Minister attended a meeting of the European Council in Brussels. By now, the language had changed so that the offer was no longer described as "very generous" but was instead "fair and serious". Mrs May indicated that her intention was that EU nationals in the UK would be given a special settled status, broadly the same as indefinite leave to remain for non-EU nationals. She said that the Government would publish full details of its offer and on 26 June, it did so in a document entitled "The United Kingdom's Exit from the European Union: Safeguarding the Position of EU Citizens Living in the UK and UK Nationals Living in the EU", accompanied by a statement by Mrs May in Parliament.

The UK proposes that all existing EU freedom of movement rights will be abolished, so all current EU permanent residence cards, registration certificates and other residence cards will become invalid. All EU nationals already in the UK on the date of withdrawal from the EU will have to apply for new residence documentation before the end of a two year grace period. The documentation will cost a "reasonable" fee but could well be substantially more expensive than the £65 EU documentation currently costs.

A cut-off date will be set at some point between 29 March 2017 (the date Article 50 was triggered) and 29 March 2019 (the date on which the UK will leave the EU). Whether an EU national arrived before or after the cut-off date will affect their subsequent rights. The lack of clarity over this date is particularly unhelpful to those who have arrived since 29 March 2017 and are anxious to know whether they will be allowed to stay or not.

Under the UK proposals, EU nationals and their families will broadly fall into four different categories, depending on their date of arrival and status in the UK:

- Those who already have permanent residence (acquired after 5 years' continuous residence in the UK) at the cut-off date will have to apply to be granted settled status instead. This will be broadly the same as indefinite leave to remain for non-EU nationals currently. It means that after Brexit it is likely that persons with settled status will have the same rights as British nationals vis-à-vis bringing family members to the UK: ie they will have to satisfy minimum income requirements, their partner will have to pay an NHS surcharge, their relationship will be subject to deeper investigation by the Home Office, and they will have to pay a substantial fee to the Home Office. Their position will certainly be inferior to that of an EU national with permanent residence currently. Furthermore, the new settled status will be lost if a person leaves the UK for more than two years unless they have strong ties here. Whilst the right to permanent residence is also currently lost after an absence of two years, EU nationals retain the right to re-enter the UK at any time in exercise of their free movement rights.

• Those who arrived before the cut-off date but have not acquired permanent residence will be granted a temporary status to allow them to stay long enough after Brexit to acquire settled status.
• Those who arrive after the cut-off date but before Brexit will be able to continue to exercise free movement rights until 29 March 2019. They will then have to apply for leave to remain under whatever rules are then in force.
• Those who arrive after 29 March 2019 will be subject to whatever rules are then in force. We will not know what the Government's intentions are until it publishes its Immigration Bill during the life of this Parliament. However, at the moment it looks increasingly likely that the Government intends to apply the same rules to EU nationals as currently apply to non-EU nationals.

Due to the volume of applications for residence documents that the Home Office will have to deal with, the UK will provide blanket residence permission to all EU citizens and their families already living in the UK on the date of withdrawal (29 March 2019) for the grace period of up to two years, during which time they will be expected to apply for residence documentation. At the expiry of the grace period, anyone who has not obtained residence documents will be unlawfully in the UK and will be committing a criminal offence.

Current EU students and those starting courses at a university or further education institution in the 2017/18 and 2018/19 academic years, will be eligible for student support and home fee status, and will be given a right to remain in the UK to complete their course.

Like the EU, the UK intends that professional qualifications obtained in the EU prior to the UK's withdrawal will continue to be recognised in the UK.

Following Mrs May's proposal on 22 June, there was a mixed reaction. Although German Chancellor Merkel initially said it was "a good start", Donald Tusk, the President of the European Council, said that the offer was "below expectations", that his first impressions were not positive, and the offer "risks worsening the situation of citizens". The 3 Million pressure group, which campaigns on behalf of EU nationals in the UK, called the offer "pathetic", pointing out that it made no reference whatsoever to the EU's proposal. The offer has also been heavily criticised by groups representing British nationals resident in the EU. In addition, UK business groups criticised the lack of clarity in the proposals and complained that it would lead to a big increase in the administrative burden on employers and individuals.

What are the differences between the two sides?

There are a number of fundamental differences between the two sides' positions.

First, the EU wants the cut-off date to be 29 March 2019, whereas the UK is equivocal as to whether it should be an earlier date, perhaps as early as 29 March 2017. The UK may be more open than it would have been to compromise on this issue given that annual net migration from the EU to the UK has been falling since the referendum. The Government was previously fearful that there would be a surge in new EU migration ahead of Brexit. As this has not proved to be the case, it may be more prepared to make concessions.

Second, whereas the European Commission wants the CJEU to have jurisdiction over the status of EU citizens, the UK is insisting that these rights would be "enforceable through our highly respected courts". It is difficult to see how this can ultimately be left to be a matter for national courts. The Government says it is looking for a reciprocal agreement. It is difficult to see the EU relinquishing its jurisdiction over the rights of British nationals in the EU after Brexit, and it is almost unthinkable that it would leave these matters to national courts. Yet the UK has repeatedly said that one of its "red lines" is that the CJEU must have no jurisdiction here. It seems likely that a compromise will have to be reached whereby at the very least an independent arbiter, if not the CJEU itself, would adjudicate in disputes between EU nationals and the UK.

Third, the UK's proposal regarding the status of citizens falls short of the EU's expectations. Whilst on the face of it, it might appear that settled status will allow EU nationals to live in the UK as before, the differences when it comes to eg bringing family members to the UK have already been highlighted above.

Fourth, the requirement that all EU nationals will require residence permits in the UK appears to have rankled the EU, which sees it as a discriminatory measure against its citizens.

Fifth, the UK proposal does not address the rights of UK citizens who have returned to the UK after exercising free movement rights in the EU. Under EU law, such citizens are given the same rights as EU nationals, eg they can bring their non-EU families with them without needing to satisfy the requirements of UK immigration law.

EEA nationals

It is easy to forget in the midst of all this that it is not only EU nationals who are affected. Citizens of the EEA (Norway, Iceland and Liechtenstein) and Switzerland and citizens of the UK resident in those countries also currently benefit from EU free movement laws. However, as those countries are not members of the EU, they do not form part of the UK's negotiations with the EU. Any agreement regarding the status of their citizens will have to be negotiated separately with the individual governments. The UK policy paper states that it intends to discuss similar arrangements to the EU proposals with these States on a reciprocal basis.

What about British citizens in the EU?

Whereas the European Commission's position is that there should be a reciprocal continuation of existing rights, the UK's position sets out a complex set of different rules depending on when an EU national arrived in the UK. All it says about UK nationals abroad is that it expects that the EU will offer reciprocal treatment for UK nationals resident in its member states. British expatriate groups are understandably upset that the UK government is arguing that they should have less rights than advocated by the European Commission.

Lack of clarity as to what EU nationals in the UK should do now

It is difficult for EU nationals to know what they should do in the short term, given the lack of certainty as to what their position will ultimately be. The Government's position paper says that it hopes to introduce a voluntary scheme in 2018 to enable EU nationals to obtain settled status before the UK's departure. The Government has also said that applicants for settled status will not have to satisfy the existing requirement for students and self-sufficient persons that they should have previously held comprehensive sickness insurance cover in order to be considered continuously resident, so it may be easier for some people to obtain the new settled status permits than it is to obtain current EU permanent residence documentation.

Given that the Government does not intend to recognise residence permits and registration certificates after Brexit, anyone obtaining such documents will still be required to obtain a new UK residence document afterwards. In those circumstances, some EEA nationals may decide to wait and see before applying for any residence documentation.

However, it remains the case that the position paper simply contains the Government's opening position for the negotiations. It may be that it will make significant concessions during the course of those negotiations. It may be that it will agree to accept EU residence documentation after withdrawal – after all, there seems to be no good reason why people who have already satisfied the Home Office that they are entitled to a permanent residence card should then need to apply for a settled residence permit on exactly the same basis.

It should also be borne in mind that the Home Office is likely to be deluged with applications for settled residence permits once they are introduced. The UK policy paper says that it will seek to make sure that the application process for settled status is as streamlined as possible for those who have already obtained a certificate of permanent residence. Consequently, it may be that people who already have the relevant EU residence documentation may have their applications for settled status processed more quickly than those who don't.

Others may feel, now that the Government is talking about a time when EU nationals will no longer have an automatic right to come to the UK, that they need the reassurance of obtaining documentation that shows they have a lawful right to be here, even though such documentation may no longer be valid in less than two years.

In addition, under current law, any EU national wanting to apply for British citizenship has to produce a permanent residence card in support of their application. EU nationals who have already qualified for permanent residence can therefore leapfrog the settled status process by opting to naturalise instead, although some EU states do not permit dual nationality.

Conclusion

It had been hoped that the issue of citizens' rights would be one of the most straightforward aspects of the Brexit negotiations. However, the two sides are so far apart that it does not augur well for a swift conclusion.

In addition, there are a number of hints in the UK's policy paper that it may simply extend current non-EU immigration law to EU nationals after Brexit. For instance, at one point the policy paper says: "Future family members of those EU citizens who arrived before the specified date – for example a future spouse - who come to the UK after we leave the EU, will be subject to the same rules that apply to non-EU nationals joining British citizens, or alternatively to the post-exit immigration arrangements for EU citizens who arrive after the specified date."

Whilst we at least now know what the Government's intentions are towards EU nationals who arrive before 29 March 2019, we will have to wait until the Immigration Bill is published, later in this Parliament, to discover what its plans are for those who arrive afterwards.

If you require further information on anything covered in this briefing please contact Lee Jackson([email protected] , 020 3375 7194) or your usual contact at the firm on 020 3375 7000. Further information can be found on the Brexit page of our website.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, July 2017