Withdrawal from EU Legal Perspective

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Referendum to Exit

Article 50 and Withdrawal

The European Union is not an indissoluble Federal state. Although the United States was formed as and to a large extent remains, a union of autonomous states, the result of the 1861 -5 Civil War made it clear that states cannot unilaterally withdraw. The Civil War was triggered by the withdrawal of a number of southern states to form the rival Confederate States of America, largely over the issue of slavery. The result of the Civil War was confirmed by the US Supreme Court case Texas v White which held that the secession had been at all times legally invalid

Prior to the adoption of the Lisbon treaty in 2007, there was no provision in the EU treaties for withdrawal. Some elements of the EU treaties, including the notorious aim of ever closer union and the unlimited duration of the communities might have been argued to imply that consent of all states was required to leave. Most scholars argued, and political reality meant that withdrawal always remained a sovereign prerogative of states even though it would or might involve denouncing and breaching an international treaty. However, the position was not fully clear in international law terms.

An important reform in the Treaty of Lisbon was the express provisions whereby a member state might leave the European Union. This was part of a package of measures which sought to make the European Union more democratic and expressly dependent on the ongoing consent of its members. Another part of the package provided for enhanced participation in the legislative procedure by national parliaments where the EU might be sent to exceed its mandate.

Previous Withdrawals

Prior to Brexit, there were two significant withdrawals from the European Union. As with most French overseas territories, they were legally incorporated into France under the French constitution and its predecessors. When Algeria became independent of France in 1962, the position remained ambiguous for a period until the European Communities and Algeria entered an agreement in 1976 to formalise the position.

Greenland is part of the kingdom of Denmark and withdrew from the European Communities in 1982, largely due to issue of fisheries. Greenland had voted against Denmark joining the EU in 1972, so had been a member without its consent. This contributed to growing pressure for home rule in Greenland. In 1979 a home rule parliament was created. A 1982 referendum in Greenland led to a vote in favour of withdrawal.

The withdrawal was by agreement between the EEC states and Greenland and given effect in amendments to the EEC treaties. Each of Ireland and the United Kingdom passed domestic legislation to ratify Greenland’s exit.

Provisions of Article 50

Article 50 of the Treaty on the functioning of the European Union one of the twin Lisbon Treaties provides

  1.  Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.
  2.  The Treaties shall cease to apply to the State in question from the date of entry into force of the Withdrawal Agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.
  3.  For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.
  4.  A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.
  5.  If a State which has withdrawn from the Union asks to re-join, its request shall be subject to the procedure referred to in Article 49.

 

Therefore, each state may leave the European Union in accordance with the terms of its own legal system. Notice of the intended withdrawal is to be given by the departing state. The European Commission acting in accordance with guidelines provided by the European Council (heads of state) is to negotiate and conclude an agreement with the departing state, setting out the arrangements for its withdrawal. The agreement is to take account of the framework for the future relationship between the departing state and the European Union.

There were those who argued in the run-up to the referendum, that the UK could leave the EU bypassing the Article 50 process. However, the weight of international law opinion, is that in the absence of the agreement of all states to waive it, the Article 50 process is that applicable and specifically agreed to apply under the treaties themselves.

There is no legal obligation on either the departing state or the European Union to conclude an agreement. Therefore, a state may choose to depart without an agreement in relation to either withdrawal or a future relationship on a unilateral basis by waiting out the two-year period.

Withdrawal Agreement

There are two distinct agreements contemplated by Article 50. The EU shall negotiate and conclude an agreement with the withdrawing state setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the EU. This agreement seeks to deal with unwinding ongoing matters and involvement in programs, financial adjustment and the rights of EU nationals in the withdrawing state and withdrawing state nationals in the EU.

The agreement on withdrawal is to be agreed by the UK and a by qualified majority of the remaining EU states, namely 20 of the 27 comprising at least 65 per cent of the population. This agreement in itself does not require the consent of national parliaments.

The EU Treaties cease to apply on the date of withdrawal under the Withdrawal Agreement or failing that two years after notification (30th March 2019), unless the European Council in agreement with the exiting member state (the UK) decides to extend this period. The European Union by the European Council (heads of government) must unanimously agree to any extension.

The Withdrawal Agreement will contain a framework only of the new relationship. There are likely to be transitional arrangements before the final agreement is entered. The European Parliament has resolved that the transitional period should not be more than three years.

 Transitional Arrangements

The arrangements for withdrawal  includes transitional measures regarding the winding down of UK’s involvement in EU programs, a once-off contribution to the EU budget if applicable and the rights of EU nationals in the withdrawing state, and (vice versa). The framework for the future relationship may cover possible future trade arrangements and other features of a long-term relationship.

There is  a transitional agreement for a period after 31st January 2020 during which the UK’s future relationship with the EU will be negotiated and concluded. There may be an extension of the withdrawal date. It seems unlikely that a complete agreement can be entered within two years. However as of early 2020, the UK government has committed not to extend.

There may be a point at which the UK may symbolically leave the EU, with many of the remaining details the subject of negotiations and ongoing transitional arrangements with further agreements be entered. The result is that there is likely to be significant uncertainty as to the ultimate outcome for many years to come.

New Relationship Agreement

The UK government originally sought a a comprehensive bespoke trade deal.  If such an agreement is entered in relation to the future relationship of the UK and the EU, then unanimous consent is likely to be required of the other EU states. Their parliaments are likely to have to ratify it. This is because it would be a mixed agreement dealing with both EU and member state competences.

In the absence of a new trade deal, then on withdrawal taking effect, the World Trade Organisation rules require each of the EU and UK to apply the same tariffs and conditions of trade on imports from each other, as the EU now applies in respect of other World Trade Organisation members, with which there is no comprehensive agreement.

The Johnston Government is seeking a more distant, more off the shelf standard trade agreement than the May Government sought. There may be basic agreement followed by further agreements over time.