EU Funding Instruments
The TCA provides last-minute clarity for UK companies and organisations that participate in EU funded projects, or receive funding and investment through EU programmes, such as Horizon Europe.
Part 5 of the TCA establishes the framework and conditions for the UK’s continued participation in EU programmes that are listed in Protocol I. These include the European Space Programme, Horizon Europe and the Framework Programme for Research and Innovation, the Research and Training Programme of the European Atomic Energy Community and the European Joint Undertaking for ITER and the Development of Fusion Energy.
The UK’s participation is however subject to specific reservations set out in Protocol I. For example, the UK cannot participate in the European Innovation Council (EIC) Fund established under Horizon Europe, which is the financial instrument underpinning the EIC Accelerator of Horizon Europe. This will be a blow to many UK economic operators who are funded through EIC investment, although the UK Government has previously given assurances that shortfalls in funding owing to Brexit will be covered by the UK Government.
As well as providing the terms for legal continuity and the mechanics by which the UK will continue to financially contribute to and observe the rules of each EU programme, the TCA establishes mutual assurances that are binding and intended to enable greater continuity in respect of relevant programmes. For example, both the UK and the EU have committed to facilitating the ongoing entry and residence of one another’s nationals who are involved in the implementation of the EU programmes, including students, researchers, trainees or volunteers. This is good news for any EU national working in the UK in an EU programme within the scope of Protocol I, and for any UK nationals working on EU programmes in EU member states.
The TCA contains ambitious provisions on public procurement. It goes well beyond commitments under the WTO Government Procurement Agreement (GPA), to which the UK is in the process of acceding, including extending market access coverage to the gas and heat distribution sector; to private utilities that act as a monopoly; and to a range of additional services in the hospitality, telecoms, real estate, education and other business sectors.
EU companies will be able to participate on an equal footing with UK companies in bids for procurement tenders covered by the TCA, and vice versa.
The TCA further provides for non-discrimination of EU companies established in the UK (and vice versa) for small-value procurement, i.e. below the threshold of the GPA (from EUR 139,000 to EUR 438,000, depending on the contracting entity, and EUR 5,350,000 for construction services). The Agreement also allows the use of its bilateral dispute settlement mechanisms for disputes that might arise in regard to the procurement opportunities subject to the GPA.
The TCA will also ensure that the UK can enact reform of its current procurement system.