The House of Commons Foreign Affairs Committee made a statement the day after the EU referendum urging the Foreign and Commonwealth Office (“FCO”) to “be equipped to reassert its leading role in foreign policy-making so that Britain can take its place on the world stage”. One important issue for the FCO will be how it approaches economic sanctions. While the UK remains in the EU, its only unilateral sanctions regime is its terrorist asset freezing powers (the Terrorist Asset-Freezing Act 2010). For all other sanctions regimes, the UK implements and enforces sanctions imposed by the United Nations Security Council and the EU. What will happen if the UK withdraws from the EU? The following is likely to be the case:
Cecilia Malmström, the EU Trade Commissioner, gave an interview to BBC Newsnight in which she said, “First you exit then you negotiate”. She meant that, in the view of the Commission, there will be a gap between the UK exiting the EU, following the two-year deadline given in Article 50 TFEU (absent unanimous agreement to extend this amongst the other Member States), and negotiating a new agreement.
Whether or not this is a political reality is another question, but it is at least a theoretical possibility. If it were to materialise, the UK would have to trade with the EU on World Trade Organisation (“WTO”) terms. But what does that mean?
In civil and commercial matters, the UK courts currently apply the Recast Brussels Regulation (Regulation (EU) No 1215/2012) to issues of jurisdiction in claims against defendants domiciled in EU Member States, and to issues of the enforcement of judgments given in other EU Member States. The UK courts follow the Recast Brussels Regulation because it is part of EU law and the European Communities Act 1972 obliges them to do so. When the UK leaves the EU, that obligation will fall away. Parliament may choose to enact new rules post-Brexit but, if not, what rules will take the place of the Regulation by default?
What will happen to UK references for preliminary ruling which are pending before the Court of Justice in Luxembourg if and when the UK leaves the EU? As with most Brexit questions, the short answer is that no one knows.
But this is an important practical question for many clients and their lawyers. And it is a question which they need to think about now when considering litigation, since it is not unheard of for references to take as long as two years to resolve (see the CJEU’s Annual Report on Judicial Activity (2015) p 88). Two years, of course, is also the time allowed under Article 50 TEU for negotiation of an agreement for Brexit.
Until the UK completes the process of withdrawal from the European Union, it remains subject to all of its EU obligations, including the obligation to transpose EU Directives into UK law (Article 288 TFEU). There are a range of Directives which require implementation during the course of the two-year period prescribed for withdrawal following the service by the UK of a notice under Article 50 TEU. These include, for example, the competition law Damages Directive 2014/104/EU (to be implemented by 27 December 2016), the new Data Protection Directive (EU) 2016/680 (to be implemented by 6 May 2018) and the Trade Secrets Directive (EU) 2016/943 (also to be implemented by May 2018). Prior to the referendum result, the view that was being expressed by the Department of Business, Innovation and Skills was that the UK would have to press ahead with implementation in any event. However, in a speech this week (which can be found here) Baroness Neville-Rolfe DBE CMG, Minister for Data Protection, made some comments in relation to data protection which might suggest some change in view.
Many are asking what the effect of the Leave vote in the EU referendum will be on litigation involving the CJEU and/or the courts of the UK.
This post identifies some of the types of litigation in which EU law issues arise and in which further consideration will have to be given to the effect of a pending Brexit.
Both before and since the referendum, one option for post-Brexit Britain that has made the headlines is the possibility of the UK becoming a member of EFTA or the EEA (see, for example, this article in The Telegraph’s business section “Safe harbour: why the Norway option could take the risk out of Brexit”).
It is important to be clear about what EFTA and the EEA both are and how they are different.
Who can start the process of the United Kingdom’s withdrawal from the EU under Article 50 of the Treaty on European Union (TEU)? Article 50 sets out the procedure for withdrawal but is silent on this question, providing only that “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements”. So the answer to the question turns on what are the “constitutional requirements” of the United Kingdom. Here is my contribution to this vexed and very topical question.