Switzerland and United Kingdom sign insurance and road traffic agreements
Bern, 25.01.2019 - President Ueli Maurer signed an agreement on direct insurance other than life assurance with the British Chancellor of the Exchequer, Philip Hammond, on 25 January 2019 in Davos, as well as a road traffic agreement with Jane Owen, Her Majesty's Ambassador to Switzerland. This will ensure the seamless continuation of the current regulations in these areas even after the United Kingdom (UK) has left the EU. Depending on the exit scenario, the agreements will enter into force either at the end of March 2019 or at the end of a transitional period.
In legal terms, relations between Switzerland and the UK are based on bilateral agreements between Switzerland and the EU, among other things. With Brexit, these agreements will no longer apply to the UK. This also applies to the 1989 Agreement between the European Economic Community and the Swiss Confederation on direct insurance other than life assurance, as well as the 1999 Agreement on the carriage of goods and passengers by rail and road (EC/Switzerland land transport agreement).
The insurance agreement signed today between Switzerland and the UK will ensure the seamless continuation of the existing rules in the direct insurance sector. Like the insurance agreement with the EU, it will enable non-life insurance companies (e.g. household, motor vehicle, travel, liability insurers) to establish and operate branches in a country of the other contracting party.
The road traffic agreement between Switzerland and the UK will ensure that carriage of goods by road will remain exempt from authorisation for journeys between the two countries and in transit, that mutual access for the carriage of goods and passengers by road will be maintained and that administrative expenses will be kept low. Cabotage, i.e. the transport of goods or passengers within the other country, will still be not permitted. Moreover, the agreement refers to the national law of both countries, e.g. for Switzerland, the ban on night and Sunday driving and the 40-tonne limit for lorries. Unlike the EC/Switzerland land transport agreement, this agreement now covers only road transport and no longer rail transport. International agreements are sufficient for rail traffic between Switzerland and the UK.
Taking account of further developments between the EU and the UK, there are two scenarios for the entry into force of the two agreements between Switzerland and the UK:
- Orderly withdrawal of the UK from the EU: Should there be a transitional period in UK/EU relations, the bilateral agreements between Switzerland and the EU are likely to remain applicable to the UK until the end of the transitional phase. This would be the case also for the insurance agreement between Switzerland and the EU and the EC/Switzerland land transport agreement. Consequently, the agreements between Switzerland and the UK signed today would not come into force until the transitional period has ended.
- Disorderly withdrawal of the UK from the EU: If the UK were to withdraw from the EU in a disorderly manner on 29 March 2019, the insurance agreement between Switzerland and the UK and the road traffic agreement between Switzerland and the UK would enter into force on 30 March 2019, as the insurance agreement between Switzerland and the EU and the EC/Switzerland land transport agreement would no longer be applicable in the bilateral relationship between Switzerland and the UK from that date.
The new agreements are part of the Federal Council's "mind the gap" strategy. In October 2016, it decided to secure the existing mutual rights and obligations with the UK beyond the Brexit date and to expand them if necessary. To this end, the Federal Council has since approved several agreements. Aside from the agreements signed today, these also include agreements in the fields of aviation and economic and trade relations. Another agreement approved by the Federal Council concerns the rights of Swiss nationals already resident in the UK (and vice versa).
The FDF and HM Treasury have also acknowledged the signing of the insurance agreement between Switzerland and the UK in a joint statement.
Address for enquiries
On the insurance agreement:
Frank Wettstein, Co-Head of Communications, State Secretariat for International Finance SIF
Tel. +41 58 462 38 56, firstname.lastname@example.org
On the road traffic agreement:
Federal Office of Transport FOT, Media Office
Tel. +41 58 462 36 43, email@example.com