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Post-Brexit cross-border Channel Tunnel rail services – An update on the current position regarding mutual recognition of operator licences

  • United Kingdom
  • Transport - Rail

26-05-2021

The Channel Tunnel “fixed link” infrastructure is of key importance to the successful and efficient movement of passengers and goods between the UK and EU. Ensuring the long-term continuation of the effective, and, to the extent possible, “frictionless”, movement of rail services between the UK and the EU via the Channel Tunnel is therefore a vital part of the post-Brexit legislative and diplomatic agenda for the transport sector. The position as regards long-term mutual recognition of operator licences issued by the Office of Rail and Road (ORR) in the UK[1] and by European Economic Area (EEA) states[2] is central to this process.

What is the current position?

 As between EEA states, the concept of “frictionless” cross-border movement of rail services is (in part) delivered through Chapter III of Directive 2012/34/EU (the “Recast Directive”) which requires railway undertakers to obtain a licence to provide rail transport services within the EU (a “European Licence”). Once granted, a European Licence is valid throughout the whole territory of the EEA.  

 The Recast Directive was implemented in England, Wales and Scotland[3] via the Railways (Access, Management and Licensing of Railway Undertakings) Regulations 2016, which themselves amended the existing Railway (Licensing of Railway Undertakings) Regulations 2005 (the “2005 Regulations”).

 Prior to Brexit, undertakers of cross-border services were accordingly able to run services through the Channel Tunnel on the basis of a single, mutually recognised, European Licence (irrespective of where in the EEA that licence was issued).

 However, nothing in the relevant EU and domestic UK legislative arrangements (including those referred to above) made provision for the long-term, post-Brexit mutual recognition of EEA/ORR-issued operator licences which are held by railway undertakers operating cross-border services through the Channel Tunnel. Any such “mutual recognition” arrangement would need to be codified via a bilateral agreement between the UK and France.

The issue of “mutual recognition” of operator licences therefore poses a potential risk to the long-term operation of cross-border rail services between the UK and EU through the Channel Tunnel[4], and has been addressed in the short term:

  • through amendments to the 2005 Regulations (which form part of the body of retained EU-derived law following the UK’s departure from the EU) implemented by the Railway (Licensing of Railway Undertakings) (Amendment etc.) (EU Exit) Regulations 2019 (the (“2019 Regulations”), including to:
    •  address deficiencies in the 2005 Regulations arising from the UK’s exit from the EU and to ensure that the 2005 Regulations continue to operate effectively post-Brexit;
    • convert the form of European Licence previously issued by the ORR to a form of “railway undertaking licence”; and
    • provide, crucially, for the continued recognition in England, Wales and Scotland of licences issued by EEA states for a period of two years from the date of the UK’s exit from the EU (i.e. until 11pm on 31 January 2022); and
  • through the adoption in December 2020 of Regulation (EU) 2020/2222, which provided for the continued recognition of ORR-issued operator licences in the French half of the Channel Tunnel (and up to the Calais-Fréthun freight and passenger terminals) until 30 September 2021.

In each case, these temporary arrangements were implemented to provide time for the required long-term bilateral arrangements to be implemented between the UK and France.

Recent developments – UK/France bilateral negotiations and draft amending regulations

The UK and France have been negotiating the terms of a bilateral agreement to deal with the issue of mutual recognition of operator licences in the context of (and to enable the continued operation of) cross-border rail services operating through the Channel Tunnel and between relevant cross-border areas in the UK and France, and it is understood that – subject to final legal review - agreement in principle has been reached at a technical level. The proposed agreement is expected to be concluded in the coming weeks, with ratification through the respective parliaments following thereafter.[5]

To support and facilitate the ratification of such bilateral agreement between the UK and France, and to ensure an effective interrelationship between the bilateral agreement and the existing legislative framework in England, Scotland and Wales[6], the Government has published (in draft)The Railway (Licensing of Railway Undertakings) (Amendment) Regulations 2021’ (the “Draft Amendment Regulations”).

In particular, the Draft Amendment Regulations (which can be accessed here) provide for:

  • amendments to be made to the 2005 Regulations to introduce the concept of a “Channel Tunnel service”[7] – noting that, according to the explanatory memorandum which accompanies the Draft Amendment Regulations: 

it has been agreed in the bilateral agreement that rail operators in the Channel Tunnel holding a European licence or (UK issued) railway undertaking licence are authorised to operate within the respective national parts of the Channel Tunnel and up to the first border crossing station in French or UK territory

  • the disapplication of the requirement under the 2005 Regulations for operators running services on the basis of a European Licence to hold a “Statement of National Regulatory Provisions” or “SNRP” where such operators run ‘Channel Tunnel services’ up to (but not beyond) Dollands Moor freight yard or Ashford International station in the UK[8];
  • the continued recognition of European Licences to operate ‘Channel Tunnel services’ on an indefinite basis; and
  • various adjustments to the temporary provisions of the 2005 Regulations (as introduced by the 2019 Regulations) which would apply in circumstances where the proposed bilateral agreement between the UK and France is ratified before 31 January 2022 (including to introduce the disapplication of the SNRP requirement for ‘Channel Tunnel services’ being operated pursuant to a European Licence, as referred to above).

For completeness, it is assumed that (if the Draft Amendment Regulations and proposed bilateral agreement are implemented on the basis generally described above):

  • any undertaker holding an EEA-issued operator licence and operating cross-border rail services through the Channel Tunnel which travel to a location beyond Ashford International station (for passenger services) or Dollands Moor (for freight services) in the UK, will also be required to hold an ORR-issued ‘railway undertaking licence’ (and SNRP); and
  • any undertaker holding an ORR-issued operator licence and operating cross-border services through the Channel Tunnel which travel to a location beyond Calais-Fréthun freight and passenger terminals in France, will also be required to hold an EEA operator licence.

 Conclusions

Once implemented, the Draft Amendment Regulations published by the Government will – together with the anticipated bilateral agreement between the UK and France - play an important role in delivering the much needed long-term post-Brexit certainty that relevant rail passenger and freight services will be entitled to continue to operate through the Channel Tunnel and between applicable cross-border areas in the UK and France without the need to hold both an ORR and EEA-issued operator licence.

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[1] The ORR is the licensing body in respect of England, Wales and Scotland. The Department for Infrastructure is the licensing body for Northern Ireland.

[2] Being the member States of the EU, Norway, Iceland and Liechtenstein.

[3] This note does not consider the position in respect of Northern Ireland, where the Recast Directive (and other relevant EU-derived railway-related law) has been implemented by way of separate domestic legislation.

[4] This issue does not apply to Eurotunnel services, as those services are subject to an exemption from the requirement to hold an operator licence in order to run services under Article 2(9) of the Recast Directive and Regulation 4(2)(e) of the 2005 Regulations which applies to operators providing shuttle services for road vehicles through the Channel Tunnel.

[5]https://www.gov.uk/government/speeches/draft-legislation-the-railway-licensing-of-railway-undertakings-amendment-regulations-2021

[6] Paragraph 7.4 of the explanatory memorandum to the Draft Amendment Regulations indicates that the proposed bilateral agreement is “contingent upon the amendments” to be made by the Draft Amending Regulations.

[7] Being: “(a) a service for the transport of passengers by rail between Calais-Fréthun station in France and Ashford International station in the United Kingdom, (b) a service for the transport of goods by rail between Fréthun freight yard in France and Dollands Moor freight yard in the United Kingdom, or (c) a service for the transport of passengers or goods by rail which originates or terminates somewhere other than one of those stations or freight yards, but only while it passes between them;” (see regulation 4 of the Draft Amendment Regulations)

[8] Paragraph 7.4 of the explanatory memorandum to the Draft Amendment Regulations indicates that this is to “…ensure a level playing field for the licensing requirements for operators on the UK and French sides of the Channel Tunnel and cross-border area, as no additional licensing requirements will be in place for UK licensed operators on the French side”. It also comments that: “The impact of disapplying this requirement, if any, is expected to be very limited in practice given the very limited geographical scope of the exemption and given that all cross-border operators currently running services through the Channel Tunnel do so on the basis of a UK licence.”