Monday 1 May 2017

The EU is in charge ~ Article 50 TEU ~ the phased approach

The message that the European Council is in control of Brexit negotiations come over very clearly from the European Council guidelines for Brexit negotiations finalised on 29th April - previous post.

They refer to a "phased approach" to the negotiations and state that the "main purpose of the negotiations will be to ensure the United Kingdom's orderly withdrawal so as to reduce uncertainty and, to the extent possible, minimise disruption caused by this abrupt change."  Two phases are envisaged for the negotiations - described in this post as (1) Orderly withdrawal and (2) Future relationship.

The European Council is very much in overall control of the negotiating process and the Council reserves the right to alter the guidelines as necessary.  It is crystal clear from the guidelines that a non-member of the EU "cannot have the same rights and enjoy the same benefits as a member."

: Article 50 TEU :

Article 50(2) of the Treaty on European Union requires that, as a minimum, there be a withdrawal agreement:

"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."

: Orderly withdrawal :

A first phase of negotiations will aim to:
  • provide as much clarity and legal certainty as possible to citizens, businesses, stakeholders and international partners on the immediate effects of the United Kingdom's withdrawal from the Union;
  • settle the disentanglement of the United Kingdom from the Union and from all the rights and obligations the United Kingdom derives from commitments undertaken as Member State.
The European Council will monitor progress closely and determine when sufficient progress has been achieved to allow negotiations to proceed to the next phase.

Phase 1 of the negotiations is examined more closely in paragraphs 8 to 17 of the Guidelines and should be read in  full.  The following is a brief outline:

Agree reciprocal guarantees to safeguard the status and rights derived from EU law at the date of withdrawal of EU and UK citizens, and their families, affected by the United Kingdom's withdrawal from the Union.  This is to be a first priority for the negotiations.  (Para 8).

Businesses also require legal certainty.  Negotiations should seek to prevent a legal vacuum once the Treaties cease to apply to the United Kingdom and, to the extent possible, address uncertainties.  (Para 9).

A single financial settlement covering "all commitments as well as liabilities, including contingent liabilities."  (Para 10).

Flexible and imaginative solutions for the island of Ireland with the aim of avoiding a hard border. (Para 11).

Agree arrangements for the Sovereign Base Areas of the UK in Cyprus - (Para 12).

The European Council expects the United Kingdom to honour its share of all international commitments contracted in the context of its EU membership. In such instances, a constructive dialogue with the United Kingdom on a possible common approach towards third country partners, international organisations and conventions concerned should be engaged.  (Para 13).

Address potential issues arising from the withdrawal in other areas of cooperation, including judicial cooperation, law enforcement and security.  (Para 14).

Arrangements for the geographical transfer of EU agencies and facilities currently located in the UK.  (Para 15).

It is envisaged that the Court of Justice of the EU may have some on-going involvement with the UK in relation to matters such as cases already pending at the Court or in relation to matters that arose before the withdrawal date.  (Para 16).

A process for dispute settlement and enforcement in relation to the withdrawal agreement. (Para 17).

: Future relationship :

A second phase will be concerned with identifying "an overall understanding on the framework for the future relationship."  Phase two will not begin until "the European Council decides that sufficient progress has been made in the first phase towards reaching a satisfactory agreement on the arrangements for an orderly withdrawal."

Paragraphs 18 to 24 of the guidelines address this phase of the negotiations.  They should be read in full but here is a brief outline:

Strong and constructive ties between UK and EU are in the best interests of both and should encompass more than just trade.  (Para 18).

The UK will not seek to remain in the Single Market but seeks an ambitious free trade agreement with the EU.  Work can begin on a trade agreement but will not be finalised until the UK is no longer a member.  (Para 19).

Any free trade agreement should be balanced, ambitious and wide-ranging but cannot amount to participation in the Single Market or parts thereof.  The EU will seek to avoid unfair competitive advantages through matters such as tax, social, environmental and regulatory measures and practices.  (Para 20).

Any future framework should safeguard financial stability in the Union and respect its regulatory and supervisory regime and standards and their application.  (Para 21).

EU stands ready to establish partnerships in areas unrelated to trade, in particular the fight against terrorism and international crime, as well as security, defence and foreign policy.  (Para 22).

The future partnership must include appropriate enforcement and dispute settlement mechanisms that do not affect the Union's autonomy, in particular its decision-making procedures.  (Para 23).

After the United Kingdom leaves the Union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom.  (Para 24). 

 : Transitional Arrangements :

The guidelines also refer to "transitional arrangements."

"To the extent necessary and legally possible, the negotiations may also seek to determine transitional arrangements which are in the interest of the Union and, as appropriate, to provide for bridges towards the foreseeable framework for the future relationship in the light of the progress made."

Transitional arrangements will have to be "clearly defined, limited in time, and subject to effective enforcement mechanisms."   It is also envisage that a time-limited prolongation of EU law (the "acquis") may be required but if this is so then it will require "existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply."

The two year timeframe set out in Article 50 TEU ends on 29 March 2019.

: Principle of sincere cooperation :

The guidelines spell out the fact that the UK remains a full member of the EU until the date of withdrawal.  As such, the UK is subject to all rights and obligations set out in the Treaties and under EU law, including the principle of sincere cooperation.  The EU (27) will meet as necessary to discuss matters related to Brexit.

The business of the full EU (28) - i.e. including UK - must continue to proceed as smoothly as possible.  Negotiations with the United Kingdom will be kept separate from ongoing Union business, and shall not interfere with its progress.

Note: Article 50(4)  prevents the UK from participating in the discussions of the European Council or Council or in decisions concerning Brexit.  Art 50(4) states:

"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."

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