Brexit Jargon Buster: simple explanations for all the terms

These explanations will help you get to the heart of the issues in the Brexit debate.


Term Explanation
31 January 2020 The UK’s withdrawal from the EU took effect on 11 p.m. GMT on 31 January 2020, and at that moment the Withdrawal Agreement entered into force. From this date the transition period came into effect. 
Article 50 Article 50 of the Treaty on European Union which was added by the Lisbon Treaty and which for the first time set out an express right and process for a Member State to withdraw from the EU, based on service of two years’ notice of withdrawal.
Backstop An arrangement for avoiding a hard border in Northern Ireland if there is no agreement on appropriate customs arrangements by 31st December 2020 (or by the end of any extended transitional period): in such a situation, the Withdrawal Agreement provides for a single customs territory between the EU and the whole of the UK, taking effect at the end of the transitional period, i.e. from the end of 2020 or from the end of any extension of the period.

There will be no tariffs or quotas applicable for goods traded between the UK and the EU and no need for traders to prove the origin of goods moving between the UK and the EU. Northern Ireland will be part of the same customs territory, but will be required to apply EU customs law in full (as set out in the EU Customs Code).

In addition, Northern Ireland will be required to comply with EU Single Market rules as regards the technical regulation of goods, agricultural and environmental production and regulation, State aid and other areas of North-South co-operation between Northern Ireland and the Republic of Ireland. This back-stop can only be ended when both the UK and the EU agree that satisfactory arrangements are in place to avoid the need for a hard border between Northern Ireland and the Republic of Ireland.

Council of Ministers The main decision making body, together with the European Parliament, of the EU, comprising ministerial representatives of all of the EU Member States.
Court of Justice of the European Communities The Court established under the EU Treaties to resolve disputes on EU law between Member States and the EU institutions and between individuals or undertakings and the EU institutions, by means of actions or appeals against acts of the EU institutions and referrals from the courts of Member States for an interpretative ruling on points of EU law. 

The Court comprises the full Court and also the General Court which is a court of first instance for actions or appeals against EU institutions (but which does not deal with referrals from national courts).

Customs Union A type of preferential trade agreement between countries; the EU’s Customs Union is an area comprising the EU Member States (and also Turkey) in which no tariffs are imposed internally on imports or exports and all member countries apply a common external tariff on goods imported from outside the Customs Union.
EEA The European Economic Area, set up in 1994, to extend the EU’s internal market to countries in the EFTA; EU legislation relating to the single market becomes part of the legislation of the EEA countries once they have agreed (through the EFTA Secretariat) to incorporate it.The EEA comprises the 28 EU countries and also three EFTA States, Iceland, Liechtenstein and Norway, in an internal market governed by the EU single market rules. The EEA Agreement allows these three EFTA countries to participate in the EU’s single market.
EFTA The European Free Trade Association, an intergovernmental organisation working to promote free trade and economic integration for its member states. It was founded in 1960 by Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom, and later joined by Finland, Iceland and Liechtenstein. However, currently there are only four EFTA countries, Iceland, Liechtenstein, Norway and Switzerland, as the other members left at different times in order to join the EU.
EU The European Union, an economic and political union of 28 countries. It operates an internal (or single) market which allows free movement of goods, capital, services and people between member states; the EU member states are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.
EU Withdrawal Act or (in full) the European Union (Withdrawal) Act 2018 The legislation which will repeal the European Communities Act 1972 with effect from the UK’s withdrawal from the EU (or, if there is a Withdrawal Agreement, from the end of the transitional period); this legislation will also retain in UK domestic law the existing corpus of EU legislation which has not already been incorporated into domestic UK law, including in particular EU Regulations (which would otherwise no longer be effective when the UK ceases to be an EU member state and EU law no longer applies in the UK) and also statutory instruments adopted under the 1972 Act implementing EU directives (which statutory instruments would otherwise lapse on repeal of the 1972 Act) in order to ensure a functioning statute book following the UK’s exit from the EU.
European Communities Act 1972 The primary UK legislation which gave legal effect in the UK to the EU Treaties and EU law and which ensures the supremacy of EU law in relation to domestic law in the UK.
EuroZone The Euro area comprising the EU Member States (19 of the 28 EU Member States) which have adopted the Euro as their common currency and sole legal tender.
Fisheries An area of major contention during the Brexit negotiations, during which the UK has sought to regain control of its waters as it is felt historically the UK has not received a fair share of fishing quotas under the EU Common Fisheries Policy, while the EU has sought to maintain EU fishermen access to traditionally UK waters to avoid economic disruption.
Four Freedoms In the context of the EU, the freedoms of movement of goods, services, workers and capital between EU member states, without internal barriers (subject to limited exceptions), which arrangements have been extended under the EEA Agreement to cover also Iceland, Liechtenstein and Norway.
Future Relationship Agreement An agreement currently under negotiation at the time of writing, which is intended to cover the future relationship between the EU and the UK, including a FTA. The framework for this future relationship was set out in the political declaration agreed by both sides in October 2019. The EU and UK officially have until 31 December 2020 (when the Transition Period comes to an end) to reach an agreement.
Free Trade Agreement (FTA) An international treaty or agreement (based on international law) to form a free-trade area between the cooperating states. FTAs, a form of trade pacts, typically liberalise the tariffs and duties that the participating countries impose on imports and exports between them and make reciprocal provisions on related matters such as rules of origin of goods, with the goal of reducing or eliminating trade barriers.
GATT The General Agreement on Tariffs and Trade, the main WTO agreement on goods.
Hard Brexit A UK withdrawal from the EU without retaining full access to the EU Single Market (and therefore without continued membership with the EEA) and without continued membership of the Customs Union.
Level Playing Field A set of common rules – for example, on competition, state aid, taxation, labour and environmental standards, climate change – which are designed to ensure that one country does not have an unfair advantage over another. The Level Playing Field has been one of the main areas of contention in the negotiations on the EU-UK future relationship.
Lisbon Treaty The Treaty of Lisbon between the EU Member States which amended the Treaty on European Union, including the insertion of Article 50 concerning a Member State’s ability to withdraw from the EU.
No-deal Brexit A scenario where the UK left the EU without a Withdrawal Agreement and/or Future Relationship Agreement.
Northern Ireland Protocol An annex to the Withdrawal Agreement which recognises the unique situation arising from the land border between Northern Ireland and Ireland (the only part of the UK which physically borders with the EU) and which seeks to avoid the reintroduction of a hard border in Northern Ireland. The Protocol outlines a solution, due to come into force on 1 January 2021, which allows Northern Ireland to be part of the UK customs territory (meaning Northern Ireland will follow UK trading policy, including any future trade agreements), while also being required to apply EU single market and customs law in full.The Protocol gives the Northern Ireland Assembly a decisive voice every four years on whether to continue with these arrangements.
Passporting The exercise of the right of a trader in the EU or EEA to conduct its business in another EU or EEA State based on its home-state authorisation, without requiring further authorisation in the host-state, based on the EU and EEA free movement rules.
Qualified Majority The weighted voting system used for all but the most sensitive issues by the EU Council of Ministers, involving a 55% majority or (in some cases) 72% majority of Member States representing 65% of the EU population.
Single Market The geographical market area established pursuant to the Single European Act, comprising all of the EU Member States and three additional member countries of the EEA, in which goods, services, workers and capital may circulate freely without internal barriers (subject to limited exceptions to cover certain essential requirements) and in accordance with the EU principle of home-state authorisation.
Soft Brexit A UK withdrawal from the EU whereby UK retains membership of the EU Single Market (most likely through continued membership of the EEA) and/or the Customs Union.
‘Third Country’ Status Generally understood as a country not in the EU, which does not adhere to the Four Freedoms (with the exception of countries that sign up to a FTA guaranteeing these rights, for example Norway).
Transition Period The 11-month period from 31 January 2020 to 31 December 2020 where the UK is no longer a member of the EU but remains a member of the Single Market and the Customs Union, and remains subject to EU rules. The Transition Period allows time for the UK and EU to reach a deal on their future relationship.
UK Internal Market Act An Act governing trading arrangements after the Transition Period across the four countries of the UK and restricting certain powers of the devolved administrations. The Act is aimed at preventing harmful new barriers to trade between different parts of the UK.
Withdrawal Agreement A treaty between the EU and the UK setting out the terms of the UK’s withdrawal from the EU. Signed on 24 January 2020, the Agreement consists of two main documents:

  • The Withdrawal Agreement itself, including the Northern Ireland Protocol; and
  • A Political Declaration setting out the framework for the future relationship between the United Kingdom and the European Union.

The Agreement covers, among other things, citizen’s rights, the Transition Period, financial matters and the Northern Ireland Protocol. The Agreement applies irrespective of the outcome of the negotiations on the future relationship.

World Trade Organisation (WTO) The World Trade Organisation, a global, multilateral, inter-governmental agreement on trade in goods and certain services based mainly on the principles of national treatment and most favoured nation treatment.
WTO Rules and Most Favoured Nation (MFN) WTO Rules state that the same trading terms must be applied to all WTO members, unless there is a trade agreement between two or more countries. This is known as Most Favoured Nation (MFN) treatment. Most Favoured Nation (MFN) means that the UK cannot offer better trading terms to one country and not another, unless through a trade agreement. The UK currently trades with many countries on WTO terms, for example China, India, Brazil and Saudi Arabia. 


How can Bird & Bird help you?

Bird & Bird has a range of tools to help businesses prepare for the commercial impact after Brexit, this includes:

  • Brexit Briefings that offer further information about the ramifications of Brexit on a particular sector or area of law; and
  • Commercial Drafting Checklist which highlights Brexit-related issues for businesses to consider when contracting after this period.
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