The residency issue is one of the thorniest to be resolved in the first phase of talks between the EU and UK.
There are about three million EU nationals living and working in Britain and the result of the EU referendum has cast their futures into doubt.
The same uncertainty applies to the 1.2 million British expats who live and work in mainland Europe, many of whom have or are in the process of applying for the nationality of their adopted homes in places like Spain, France and Belgium.
In a letter to the House of Lords’ EU committee, Davis outlined his position on the residency issue, saying, “The EU’s offer only guarantees residence rights in the member state in which a British national was resident at the point of our exit from the EU.”
He went on, “It does not guarantee the holder… any right to onward movement within the EU, for example to work or study in a neighbouring member state.”
Davis added that the UK has questioned whether this is “consistent with the principle of reciprocity, and also with the Commission’s desire to protect rights currently enjoyed under EU law,” but it is expected to be the subject of further discussions.
A European Commission spokesperson told this website that the negotiations should start addressing the uncertainty caused by Brexit, including “the financial settlement and the uncertainty surrounding the rights of EU citizens in the UK and of UK citizens in the EU.
“This should be agreed on the principles of continuity, reciprocity and non-discrimination.”
The spokesperson added that the triggering of Article 50 “does not change the right to free movement… Nor should it affect the rights of citizens who have made life choices on the basis of EU law and EU membership.”
The third round of Brexit negotiations is due to take place in the last week of August.
Parliament Brexit representative, Guy Verhofstadt, has said that the talks cannot progress unless the residency issue, along with the UK’s divorce bill and the Irish border issue, is resolved.
Parliament has the right to sign off any Brexit deal thrashed out between the two sides.