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Review Your SQE 1 Practice Records

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A UK-based consumer who uses an online payments application believes they have been unfairly charged when using the application to make a cash transfer to an EU Member State and is considering commencing proceedings against the company that owns the application. (Fictitious) Directive 2017/79 ("the Directive") states that consumers should not be charged to make any cash transfer from one EU Member State to another EU Member State. 

The (fictitious) Transfer of Cash Regulations 2021 ("the Regulations"), brought in by the (fictitious) Financial Act 2020, state that charges may be applied to non-domestic cash transfers. The consumer made a non-domestic cash transfer and is dissatisfied that they have been charged. The consumer complained, but the company pointed out that this charge complies with the Regulations. 

Which of the following best describes EU derived domestic legislation?

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After the UK's withdrawal from the EU, EU directives themselves are not retained in domestic law. However, the domestic legislation that transposed these directives into UK law is retained as EU-derived domestic legislation. The European Union (Withdrawal) Act 2018 ensures that any rights and obligations stemming from EU law, which were implemented into UK law before the exit day, continue to be effective. Therefore, the Directive itself (which is not directly applicable) would not be retained, but its domestic application, which is embodied in UK legislation, would be retained. This means that the regulations stemming from the Directive would still be effective, and any conflict between the Directive and domestic regulations would be resolved by UK law, which in this case allows for charges on non-domestic cash transfers. 

Key Point: EU-derived domestic legislation refers to UK laws that were enacted to implement EU directives. Post-Brexit, the directives themselves are not retained, but the domestic laws that were created to comply with these directives are preserved.

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