11 January 2021

"Mind the gap" - Migration law consequences of Brexit

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In October 2019, after protracted negotiations, an agreement was reached on the terms of an orderly exit of the United Kingdom from the EU as of January 31, 2020. With its "Mind the gap" strategy, the Federal Council has intended to avoid legal gaps after Brexit.

On 23 June 2016, the British electorate voted in favour of leaving the EU (""Brexit"") in a referendum with 51.9%. After the British government formally announced its decision to leave the EU in March 2017, an agreement on the terms of an orderly exit as of 31 January 2020 was reached in October 2019 after protracted negotiations and several postponements of the exit date. In the withdrawal agreement between the United Kingdom (""UK"") and the EU, it was agreed, among other things, on a transition period until 31 December 2020, during which the UK was equated to an EU member state without co-decision rights.Regulation during the transition period

Brexit also has numerous consequences for Switzerland, as relations between Switzerland and the UK have so far been largely governed by the bilateral agreements between Switzerland and the EU. In this regard, it was agreed in the withdrawal agreement that all third-country agreements of the EU, which include the bilateral agreements with Switzerland, will also continue to apply to the UK for the duration of the transition period.

The Agreement on the Free Movement of Persons (AFMP), which regulates the free movement of persons, especially for employment purposes, between Switzerland and the EU, was part of the bilateral agreements and was therefore applicable to UK nationals in Switzerland and Swiss nationals in the UK until 31 December 2020. Until the end of 2020, nationals of both countries could therefore acquire AFMP rights in the respective other country. During the transitional period, the important Regulations (EC) No. 883/2004 and No. 987/2009 on the ""coordination of social security systems"" (so-called coordination provisions) remained applicable in relations between Switzerland and the UK.

Regulation after the transition period

a) "Mind the gap" strategy

With its ""Mind the gap"" strategy, the Swiss Federal Council has intended since October 2016 to avoid legal gaps after Brexit, to maintain mutual rights and obligations in the Switzerland-UK relationship and, if necessary, to expand them. In concrete terms, Switzerland will regulate its relationship with the UK as of 1 January 2021 with new bilateral agreements that are intended to largely safeguard the current legal relationship. To this end, the Federal Council has negotiated a total of seven agreements with the British government (air transport agreement, road transport agreement, insurance agreement, trade agreement, agreement on citizens' rights, agreement on the mobility of service providers, police cooperation agreement).

b) Access to the labour market

With the end of the transition period, UK nationals will no longer be considered EU nationals as of 1 January 2021 and the bilateral agreements - including the AFMP with its coordination provisions - will no longer apply to them.

Reciprocal labour market access for new migrants will again be regulated by the respective national legislations from 1 January 2021. For UK citizens, this means that if they wish to immigrate to Switzerland or work in Switzerland after 31 December 2020, the provisions of the Foreign Nationals and Integration Act (FNIA) will now apply to them. This means that UK nationals are now also considered ""third-country nationals"" in Switzerland and are subject to the quotas for the number of residence permits (Art. 20 FNIA). Employers in Switzerland must now apply in advance for a work permit for UK nationals from the competent cantonal authority. In doing so, they must prove, among other things, that the potential British employee is well qualified and that no suitable person is available for the position to be filled, neither on the domestic labour market nor on the labour markets of the EU/EFTA countries (Art. 21-23 FNIA). An exceptional admission under the AFMP can be granted despite taking up employment after 31 December 2020, provided that an employment contract with a start date of 1 January 2021 or on the first working day of 2021 as well as proof of residence in Switzerland not registered with the authorities is already available in 2020 (e.g. by means of a tenancy agreement).

To take account of the fact that Switzerland has traditionally enjoyed a close relationship with the UK and that the UK was Switzerland's third-largest trading partner in 2019 with a volume of CHF 44.6 billion, the Federal Council has temporarily set a separate quota for employed UK nationals for 2021. This is intended to ensure the necessary flexibility for the Swiss economy by allowing skilled workers to be recruited from the UK in the coming year as well. In 2021, this will allow up to 3,500 new workers from the UK to be employed (2,100 with residence permits (B) and 1,400 with short-term residence permits (L)). These maximum numbers are initially valid for one year and will be released to the cantons on a quarterly basis. The permits for British nationals, on the other hand, are not subject to the approval procedure of the federal government (SEM) for the time being and are therefore issued exclusively under cantonal authority. In addition to the quota system, admission to gainful employment is subject to a labour market examination by the Office of Economy and Labour in accordance with the requirements of the FNIA (Art. 21 ff., cf. above). This measure represents a one-year transitional solution and is not intended to create a precedent for future regulations. If no agreement on a future migration regime is reached in the course of the next year, the separate UK quotas for 2022 could be integrated into the third-country quota, according to the SEM.

The Agreement on Acquired Rights of Citizens, which entered into force on 1 January 2021, protects the rights of Swiss and British nationals acquired in the other country under the AFMP until 31 December 2020 (namely residence rights, family reunification, social security entitlements, recognition of professional qualifications). This agreement was supplemented by a decision of the ""EU-Switzerland Mixed Committee"", which extends the protection of rights to nationals of EU member states and to cross-border situations with an EU connection.

c) Coordination of social security systems

With the expiry of the transitional period at the end of 2020, the provisions on the coordination of social security systems in the Switzerland-UK relationship will also no longer apply in principle. However, due to the bilateral agreement on acquired rights, the coordination provisions (cf. above), among others, remain applicable to persons who were already in a cross-border situation Switzerland-UK before 2021 and were subject to the social security legislation of one of these states. Thus, as long as these persons have a connection to both states that has lasted since before 2021 due to their nationality, employment or residence, nothing will change for them after Brexit. Furthermore, pension entitlements will be maintained for these persons, pension payments will be exported at the time of receipt and acquired insurance periods will also be credited in 2021. The decisive factor is therefore not the occurrence of the insured event before 2021, but the acquisition of insurance periods under the AFMP. Ultimately, this means that all social insurance benefits already in effect on 1 January 2021 (old-age and disability pensions, EL, maternity benefits, etc.) will continue to be paid.

Until new coordination provisions enter into force, the old bilateral social security agreement of 1968 between Switzerland and the UK, which was suspended by the entry into force of the AFMP, will be applied to cross-border situations that do not exist at all until after 31 December 2020 and were therefore never covered by the AFMP. The new social security provisions for the relationship between Switzerland and the UK are currently still being negotiated.

MME is happy to advise and support you on questions relating to migration and social security in a cross-border context.