Royal Decree-Law 38/2020, of 29 December, adopting measures to adapt to the United Kingdom's status as a third country following the end of the transition period

OFFICIAL STATE GAZETTE No. 340 Wednesday, 30 December 2020 Sec. I. Page 122960 I. GENERAL PROVISIONS THE HEAD OF STATE 17266 Royal Decree-Law 38/2020, of 29 December, adopting measures to adapt to the situation of the United Kingdom of Great Britain and Northern Ireland as a third country following the end of the transition period provided for in the Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, of 31 January 2020. I The United Kingdom of Great Britain and Northern Ireland (hereinafter, the "United Kingdom") ceased to be a Member State of the European Union and acquired the status of a third country on 31 January 2020, following the ratification of the Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (hereinafter, the "Withdrawal Agreement"). The Withdrawal Agreement entered into force the following day. Its main objective is to guarantee an orderly withdrawal of the United Kingdom and provide legal certainty to citizens, economic operators, and administrations of the European Union and the United Kingdom. The Withdrawal Agreement offers protection to citizens of the European Union and nationals of the United Kingdom who have exercised their rights under EU law before 31 December 2020, and includes three protocols with specific provisions relating to Gibraltar, Ireland/Northern Ireland, and the Sovereign Base Areas in Cyprus. The Withdrawal Agreement provided for a transition period from its entry into force until 31 December 2020, during which EU law continued to apply in and to the United Kingdom, with certain exceptions. Its main purpose was to offer a timeframe for the preparation of citizens, economic actors, and administrations for the new situation, as well as to provide a framework of stability for the negotiation of an agreement on the future relationship between the European Union and the United Kingdom. Negotiations for said agreement formally began on 2 March 2020 and concluded on 24 December, following an agreement on a Trade and Cooperation Agreement, an Agreement on Security of Information, and an Agreement on cooperation on peaceful uses of nuclear energy between the European Union and the United Kingdom. Since the start of negotiations, given the uncertainty regarding the outcome and the substantial change represented by the United Kingdom becoming a third country, the European Council had repeatedly conveyed to the Commission and Member States the need to ensure adequate preparation for the consequences of the United Kingdom's withdrawal in all areas and for all scenarios. The Commission presented on 9 July 2020 a communication on preparations for the end of the transition period and has published more than eighty preparatory communications on very diverse matters. In all of them, the Commission refers to those matters where changes will occur from 1 January 2021. In these communications, the Commission requests Member States, companies, and citizens to also carry out, within the scope of their respective competences and responsibilities, preparation for the consequences that the end of the transition period provided for in the Withdrawal Agreement will inevitably entail, after which the United Kingdom will cease to participate in the European Union's single market and customs union, as well as in Union policies and programmes, and to benefit from the Union's international agreements. cve: BOE-A-2020-17266 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 340 Wednesday, 30 December 2020 Sec. I. Page 122961 Within the framework of the European Union, contingency regulations on air transport, rail transport, road transport, and fishing have also been adopted, whose purpose is to avoid disruptions that could cause serious harm to the interests of the European Union, in the event that the transition period ends without an agreement on the future relationship between the European Union and the United Kingdom entering into force on 1 January. II From the moment the United Kingdom communicated its decision to leave the European Union, the Government established an interministerial coordination system with territorial administrations for information and work on Brexit, through the Interministerial Commission for the Monitoring of the United Kingdom's Withdrawal from the European Union and the working groups dependent on it. As a result of the work developed in the regulatory field for this purpose, the Government already approved in 2019 Royal Decree-Law 5/2019, of 1 March, adopting contingency measures in the event of the United Kingdom of Great Britain and Northern Ireland's withdrawal from the European Union without having reached the agreement provided for in Article 50 of the Treaty on European Union. The rule submitted its entry into force in its final provision sixth to the moment when the Treaties of the European Union ceased to apply to the United Kingdom in accordance with Article 50.3 of the Treaty on European Union. However, within the framework of the negotiations initiated between the United Kingdom and the European Union, it also provided that it would not enter into force if, prior to that date, a withdrawal agreement formalized between the European Union and the United Kingdom had entered into force, in accordance with Article 50.2 of the Treaty on European Union, as finally occurred, so that this rule, published in the BOE of 2 March 2019, never entered into force. Therefore, since the entry into force of the Withdrawal Agreement, preparation work for the end of the transition period has been carried out. In recent months, preparation work for a scenario of the end of the transition period without an agreement on the future relationship between the European Union and the United Kingdom has also been intensified. The autonomous communities have been consulted through the Conference on Affairs Related to the European Union, and an inter-administrative coordination system has been created through focal points to facilitate the flow of information. The Government's adaptation measures plan aims to minimize, on a unilateral and temporary basis, and in limited areas, some of the negative effects produced by the United Kingdom's withdrawal from the European Union. To this end, three lines of action have been articulated: regulatory, logistical, and communication. III With regard to regulatory actions, and in line with the guidelines contained in communications with the European Commission, the adaptation measures adopted at all levels must adhere to a set of principles. They must be of a temporary nature, according to timeframes that may vary depending on the specific sector in question. They must respect the division of competences established by the Treaties and must be compatible with EU law. Within the framework of these guidelines, the measures contemplated in this royal decree-law are oriented to protect the interests of citizens and economic operators who may be affected by the end of the transition period as the United Kingdom becomes a third country for all purposes. They are directed to counteract, as far as possible, and within those areas of state competence deemed indispensable, the undesirable effects derived from the end of the transition period. cve: BOE-A-2020-17266 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 340 Wednesday, 30 December 2020 Sec. I. Page 122962 However, it must be emphasized that these are measures of a temporary nature, whose validity will cease when the period indicated in each case has elapsed, or earlier, if instruments are adopted, at the internal or international level, intended to regulate, on a permanent basis, relations with the United Kingdom in the matters covered by this law. Additionally, when so established, the maintenance over time of the legal situations regulated by this royal decree-law is subject to the granting of reciprocal treatment by the United Kingdom authorities. This condition of reciprocity must necessarily be verified at a later moment after the entry into force of this royal decree-law, through the mechanisms specifically enabled for this purpose. IV Chapter I, titled "General Provisions," regulates the object of the law, the applicable regulations, and the temporary nature of the measures established, when so established, enabling the possibility of extension, as well as the reciprocity mechanism required for some of the measures. In this sense, it is provided, on the one hand, that those measures subject to a validity period will cease to be in force merely by the passage of said period, unless the Government proceeds to extend them. On the other hand, some of the measures regulated in the royal decree-law will be suspended by the Government once a minimum period of two months has elapsed since their entry into force, if the competent British authorities do not grant equivalent treatment to natural or legal persons of Spanish nationality in each of the affected areas. Chapter II establishes the rules applicable to "Professional and Labor Relations" and is divided into five sections. Section 1, "Professions and Civil Service," regulates access to and exercise of professions, and the rules applicable to access and maintenance of the status of public employees of United Kingdom nationals serving Spanish public administrations. Article 4 addresses various situations related to access to and exercise of professions for which professional qualification recognition has been obtained or is sought, subjecting the regime to the principle of reciprocity in most cases. This article regulates the regime applicable to United Kingdom nationals who permanently exercise a profession or professional activity for which access and exercise required being a national of a Member State, as well as the right to participate in aptitude tests for access to the exercise of certain professions, without the need to request the nationality exemption procedure when this was required and provided that these were convened prior to the end of 2020. This article prolongs the application of the existing legal regime for applications for recognition of professional qualifications obtained in the United Kingdom or any other Member State submitted by United Kingdom nationals to Spanish authorities prior to the entry into force of this royal decree-law or within the following five years, provided that admission to the start of studies or activities leading to their obtaining had taken place prior to 1 January 2021. The same is established for applications for recognition of professional qualifications obtained by Spaniards or nationals of another Member State in the United Kingdom that are submitted to Spanish authorities prior to the entry into force of this royal decree-law or within the following five years, provided that admission to the start of studies or activities leading to their obtaining had taken place prior to 1 January 2021. The regime applicable to titles of automatic recognition, to those exercising in Spain a profession or professional activity on a temporary or occasional basis, to professional societies, and cve: BOE-A-2020-17266 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 340 Wednesday, 30 December 2020 Sec. I. Page 122963 to accountants and audit firms registered in the Official Register of Accountants and Audit Firms is also regulated in this provision. Article 5 addresses the situation of United Kingdom nationals who had accessed the status of public employees, and their possibilities of participation in selection processes for access to the civil service. Section 2, titled "Labor Relations," contains two articles, one on the transitional regime applicable regarding temporarily posted workers within the framework of a service provision, and another on European works councils in companies or groups of companies of Community dimension. In matters of worker posting, it must be taken into account that Community legislation on worker posting – Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996, on the posting of workers in the framework of the provision of services – aims to mitigate the undesirable effects that the exercise of the freedom to provide services by European Union companies through workers posted to other Member States of the European Union may have on free competition (social dumping) and the protection of workers' rights. This legislation, therefore, only makes sense when there is such free provision of services between countries, normally recognized within the framework of multilateral or bilateral trade agreements. In this sense, the European Commission's preparatory document of 6 October 2020 on worker posting establishes that, from 1 January 2021, workers of companies from the United Kingdom or the European Union who were already posted in the territory of the European Union or the United Kingdom, respectively, will cease to be covered by the scope of application of Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996. This means that their right to continue providing services, once the transition period has concluded, will depend for workers posted to the United Kingdom on the national legislation of the United Kingdom; and for workers posted to the European Union, on the legislation of the European Union and the national law of the Member States of the European Union, without, as a general rule, posted workers being considered beneficiaries of the Withdrawal Agreement. In this sense, workers posted to Spain by a company established in the United Kingdom before 31 December 2020 may, from 1 January 2021, remain in Spain and continue providing their services without obtaining prior authorization to reside and work based on the provisions of Article 6 of this royal decree-law provided that the United Kingdom grants similar treatment to workers posted in the United Kingdom by a company established in Spain. However, in the event that an extension of the initially planned and communicated duration of posting is necessary, the corresponding residence and work authorization must be requested, without the national employment situation being applicable, and the obtaining of a visa is not required. Workers of companies established in the United Kingdom who are posted to Spain from 1 January 2021 must obtain the requisite visas or residence and work authorizations provided for in Spanish immigration legislation, without prejudice to commitments assumed within the framework of a potential agreement on commercial matters. Regarding European works councils, the European Commission's Communication of 21 April 2020 ("Notice to stakeholders withdrawal of the United Kingdom and EU rules on European Works Councils") states that "Once the transition period has ended, the rules in the field of information and consultation of workers at transnational level established in Directive 2009/38/EC will no longer apply to the United Kingdom." "Consequently, if the relevant thresholds are no longer met at the end of the transition period, a European works council, even if already established, will cease to be subject to the rights and obligations derived from the application of Directive 2009/38/EC. Said works council may continue to function under the relevant national legislation." cve: BOE-A-2020-17266 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 340 Wednesday, 30 December 2020 Sec. I. Page 122964 Section 3 addresses the exercise of research and innovation activities in a single article, Article 8, which allows United Kingdom nationals, who on 31 December 2020 are exercising these activities in Spain, to continue exercising them on the same terms in which they are recognized, with Spanish legislation currently in force being applicable to them, provided that reciprocal treatment is recognized to Spanish nationals by the competent British authorities. Section 4, titled "Social Security," contains, in a single article, Article 9, the rules for determining the applicable legislation on the same terms established prior to the date of the United Kingdom's withdrawal from the European Union. This will allow Spain to continue applying these same rules to those persons subject to British social security legislation, provided that the United Kingdom acts reciprocally with respect to those persons who are subject to Spanish social security legislation. In Section 5, Article 10 regulates measures aimed at allowing United Kingdom nationals to access unemployment benefits for contribution periods up to 31 December 2020 (end of the transition period), in any Member State of the European Union including contribution periods in the United Kingdom, provided that the last contributions were made in Spain and the right to legally reside in Spain is maintained. With the measures included in this article, it is also intended that nationals of the European Union can access unemployment benefits for contribution periods in the United Kingdom before the end of the transition period provided that the last contributions were made in Spain. On the other hand, paragraph 3 of this Article 10 has included a specific measure with the objective of maintaining rights in matters of unemployment benefits for border workers who travel daily to work in Gibraltar, who may access said benefits, until 31 December 2022, under the terms provided for in this provision. This measure is justified in a context of a high unemployment rate in the Campo de Gibraltar area and of border workers not covered by the Withdrawal Agreement who could cease to be protected when, by ceasing to apply Community coordination Regulations. This would be a measure that would be applied without the requirement of the reciprocity condition due to the peculiarities existing around the border workers of the Campo de Gibraltar area. Chapter III contains, on the one hand, in Article 11, the rules applicable to the provision of healthcare in the absence of an express international, bilateral, or multilateral instrument, articulating them around two basic principles: continuity and reciprocity. Thus, it is expressly provided that, from the entry into force of the royal decree-law, and until 30 June 2021, Spain will continue to provide healthcare on the same terms and with the same conditions established prior to 1 January 2021, provided that the United Kingdom guarantees these same conditions to those persons who have the right to receive healthcare funded by Spain. Likewise, in order to ensure the correct provision of healthcare, the validity of health cards issued, as well as those documents that must be provided in the absence of these to obtain healthcare in Spain, is clarified; the characteristics of the billing and reimbursement procedure are indicated, and competence for the management of procedures derived from what is provided here is attributed to the National Institute of Social Security and the Social Institute of the Navy. For its part, Article 12 provides for the regime applicable to students from the United Kingdom's education systems, who may continue to benefit from the access procedures to the Spanish University for the 2021-2022 academic year on the same terms provided for students from education systems of cve: BOE-A-2020-17266 Verifiable at https://www.boe.es

OFFICIAL STATE GAZETTE No. 340 Wednesday, 30 December 2020 Sec. I. Page 122965 Member States of the European Union, provided they meet the academic requirements required in their education systems to access their universities. Chapter IV, titled "Economic Activities," is subdivided into 3 sections. In Section 1, Article 13 establishes a framework to guarantee the continuity of financial service contracts provided in Spain by financial entities established in the United Kingdom. The end of the transition period established in the Withdrawal Agreement between the United Kingdom and the European Union could have an impact on the Spanish financial system given the importance of London as a global financial center. To prevent that the increase in uncertainty and the loss of access to the European market could affect financial stability or come to harm clients of financial services, a section with adaptation measures related to financial services is included. The loss of the Community passport implies that financial entities established in the United Kingdom will have to adapt to third-country regimes to continue providing services in Spain, including those services resulting from contracts entered into prior to, but with maturity after 1 January 2021. With the objective of reinforcing legal certainty, customer protection, and avoiding any risk to financial stability, Article 13 guarantees that the validity of contracts is not affected by the end of the transition period. In addition, a temporary regime is established to guarantee that adaptation to third-country regimes does not imply a disruption in the provision of services associated with said contracts or, alternatively, facilitate the termination of contracts if the entity does not wish to continue its activity in Spain. The temporary regime is enabled for activities subject to authorization. Activities linked to the management of financial service provision contracts that do not require authorization may continue to be carried out without the need to adhere to the regime cve: BOE-A-2020-17266 Verifiable at https://www.boe.es