Section 2: Saving for EU-derived domestic legislation
Section 2 provides that existing domestic legislation which implements EU law obligations (EU-derived domestic legislation, also referred to in these notes as ‘preserved legislation’) remains on the domestic statute book after the UK leaves the EU. Generally, secondary legislation lapses automatically when the primary legislation under which it is made (for instance, section 2(2) ECA) ceases to have effect, unless saved expressly). More widely, there would be doubt as to whether legislation which presupposes membership of the EU would work if the UK is not a member of the EU. The same applies for legislation which relates or refers to the EU or the EEA. This section makes it clear that these categories of legislation fall within retained EU law, so that the powers in the Act can be used to ensure that they still function properly after exit from the EU. See also section 20(6).
	Subsection (1) provides that EU-derived domestic legislation will remain in place and continue to have effect on and after exit day, as it has effect before exit day. This will include legislation that has been passed or made but is not yet in force. This will also include amendments to EU-derived domestic legislation made under the ECA. This is in contrast to section 3 where it is only direct EU legislation that is "operative" immediately before exit day that is converted (see paragraph 87 of these notes).
	Subsection (2) describes the types of legislation which will form part of this ‘EU-derived domestic legislation’, or preserved legislation:
Subsection (2)(a) preserves secondary legislation which has been made under the dedicated power in section 2(2) of the ECA to implement the UK’s obligations under EU law, and under paragraph 1A of Schedule 2 to the ECA. Paragraph 1A of Schedule 2 allows for ambulatory cross-references to EU instruments "as amended from time to time", which means the references to the EU instruments will automatically update when that EU instrument is amended. Paragraph 1 of Schedule 8 to the Act, however, makes further provision about such ambulatory references to EU legislation, so that modifications made by the EU on or after exit day do not form part of UK domestic law. Further effects of paragraph 1 are explained below.
Subsection (2)(b) is designed to cover legislation which, while not made under section 2(2) of the ECA, was either specifically passed (e.g. by an Act of Parliament) or made under other secondary legislation making powers for the purpose of implementing EU obligations.1 For example, domestic health and safety law is often made to implement EU obligations but is normally made under the powers in the Health and Safety at Work etc. Act 1974 rather than the ECA. The reference to ‘operating’ is designed to include legislation which was not specifically passed or made to implement our EU obligations (for example, because the EU had not legislated in that area at the time the legislation was made) but has since become part of the way in which we demonstrate compliance with EU requirements.
Subsection (2)(c) covers enactments which are connected to, but do not fall within, the definitions of domestic legislation preserved by subsection (2)(a) or (2)(b) or converted EU law. It is designed to ensure that provisions which are tied in some way to EU law, or to domestic law which implements EU law, can continue to operate properly post exit. For example, it will ensure that a provision which goes beyond the minimum needed to comply with requirements under EU law (a so-called ‘gold-plated’ provision) is not considered to be excluded from scope of ‘EU derived domestic legislation’. This will allow such a provision to be amended by the powers in the Act, so that it still works effectively once the UK has left the EU.
Subsection (2)(d) is a residual category designed to cover provisions which relate in some way to the EU or EEA. For example, if an Act of Parliament contained cross-references to a definition contained in an EU instrument, those provisions would fall within the definition and would be preserved.
The definition of preserved legislation does not include the ECA itself. Amendments made under the ECA are preserved (see paragraph 76).
	The category of domestic legislation that is preserved is widely drawn. However, under this section, domestic legislation is only preserved so far as it is operating for any of the purposes set out at subsections (2)(a) to (d). If it is not operating for those purposes, it will not fall within the ambit of this section. For example, where an Act of Parliament contains cross-references to an EU instrument this does not mean that the Act as a whole becomes EU-derived domestic legislation (and by extension retained EU law), rather that only those parts of the Act which operate for any of the purposes set out above do. In the same way, only those parts of domestic legislation which implement EU rules (or fall within the other limbs of the definition) form part of retained EU law (whichever power or powers the instrument was made under).
	Any domestic legislation which falls within this section will be preserved subject to the effect of relevant existing case law (see section 6 for further details).
	Subsection (3) provides that the preservation of retained EU legislation is subject to the exceptions in section 5 and Schedule 1 (see below).