On 3 February 2020, the UK Government published a written statement made by Boris Johnson, UK Prime Minister, setting out the UK Government’s proposed approach to the negotiations with the EU on its future relationship.
The statement, amongst other things, outlines that the agreement must respect the sovereignty of both parties and the autonomy of their legal orders. In light of this, the agreement cannot include any regulatory alignment or any jurisdiction for the Court of Justice of the European Union over the UK’s laws.
Mr Johnson alludes to the future relationship comprising of a “suite of agreements”, of which the main elements would be a comprehensive free trade agreement covering substantially all trade. The UK’s aspiration and level of ambition in these negotiations is to secure free trade agreements (FTAs) which are “at least as good” as recent FTAs between the EU and other third-countries such as Canada and Japan.
On financial services, the UK Government will look for an agreement that provides for a predictable, transparent, and business-friendly environment for financial services firms, ensuring financial stability and providing certainty for both business and regulatory authorities, and with obligations on market access and fair competition. The statement includes that, given the depth of the relationship in this area, there should be “enhanced provision” for regulatory and supervisory cooperation arrangements with the EU, and for the structured withdrawal of equivalence findings.
The UK Government perceives the EU’s assessment processes on financial services equivalence as technical and confirmatory of the reality that the UK will be operating exactly the same regulatory frameworks as the EU at the point of exit. The UK intends to approach its own technical assessment processes in this spirit.