Tag: brexit

The impact of Brexit on international trade taxation

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 by Andreia Barbosa, PhD student at the Law School of UMinho
▪

On 23 June 2016, the British people decided to leave the European Union, re-launching the idea that belonging to the European Union, in the light of Article 50 of the Treaty on European Union, does not seem to be an obligation, but a choice. States have the (unilateral) right to leave.

The actual effects of Brexit are not yet fully known. In fact, its exact consequences will only be effectively known when the negotiations are over – which will only happen, predictably, in early 2019.

There are, however, more likely scenarios than others and, consequently, more likely effects than others. Among the most immediate scenarios and effects, are those relating to the commercial transactions between the United Kingdom and the European Union. Because, of course, one of the most important ideals of the European Union is the free movement of goods, based on the existence of a single market without technical and physical frontiers in the free movement of persons, services, goods and capital­. So, the question arises as to the terms under which trade in goods between the United Kingdom and the Member States of the European Union will take place.
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The EU and the adoption of Free Trade Agreements (FTAs): heading towards a vetocracy?

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 by Francisco Pereira Coutinho, Professor at the NOVA Law School, UNL
▪

Few would disagree that signing free trade agreements (FTAs) is one of the raisons d ´être of the European Union (EU). As the United Kingdom will probably discover after leaving the EU, the bargaining power of a State, even a member of the G8, is far inferior to that of the world largest economy, which is also the one that most imports, exports, receives and sends foreign direct investment. Ever since the Rome Treaty (1957) granted ius tractum to the European Economic Community, dozens of FTAs were adopted. The latter are pivotal to the European economy: around 31 million employments in the EU (1/7 of the total) depend, direct or indirectly, from the external trade.

The Lisbon Treaty broadened the legal capacity of the EU to adopt ‘new generation’ FTAs, which are trade agreements which contains, in addition to the classical provisions on the reduction of customs duties and of non-tariff barriers to trade in goods and services, provisions on various matters related to trade, such as intellectual property protection, investment, public procurement, competition and sustainable development (ECJ, Opinion 2/15, para. 17).

The Comprehensive Economic and Trade Agreement (CETA) is a ´new generation’ bilateral FTA that was signed on 30 October 2016 between Canada, of one part, and the EU and the Member States, of the other part. It is expected to increase EU-Canada trade in goods and services by 23% and boost EU GDP by about €12 billion a year.
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Past a “Great Perhaps”, the transnational lists for the European Parliament Election become a great doubt

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by Sergio Maia, Managing Editor
▪

Considering the “Great Perhaps” – as Rabelais stated in his very last words when passing away to the final destination – surrounding Brexit, one great doubt has just emerged. Yesterday, the European Parliament voted and approved in plenary (431 x 182. There were 61 abstentions) the report on the new seats distribution of MEPs for the period after the UK withdrawal. Yet, the inclusion of a joint constituency comprising the entire territory of the Union, the well-known transnational lists topic, was rejected. Previously and long evaluated, the Constitutional Affairs Committee (AFCO) had approved (17 x 8) the future structure in Jan., 24th. That would mean that in the next elections, besides the usual ballot, there’d be one separate “section” in which the European citizens and residents would vote for representatives not on a Member State-by-Member State basis, but on a general basis instead. Such “section” would have 27 seats (ideally with preannounced runners) to be fulfilled by the most voted candidates in the ballots across the whole Union without national divisions. The Council still would have to unanimously agree on the issue before the new system entered into force (and the Parliament would need to vote again confirming) but the proposal is in this part (for) now off the table.

The general seat change has happened because the composition of the EP needed to go through modifications given the MEPs from the United Kingdom end their terms in 2019 and will not be candidates again following Brexit.
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The right to withdraw the notification to leave the European Union under Article 50 TEU: can we still save the marriage?

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by Mariana Alvim, PhD candidate at University of Lisbon
▪

The 29 March 2017 will be always recalled as the date the United Kingdom has served divorce papers on the European Union, following a referendum that took place on the 23 June 2016 where the majority of the British people decided to leave the EU.

The EU institutions and the Member States have limited instruments at their disposal to persuade other Member State to remain a member of the Union against their will; therefore if exit cannot be prevented at least it can be regulated.

The decision to depart is always taken in accordance with the Member State’s domestic law but once Article 50 TEU is triggered the law of the European Union governs the withdrawal process and the departure itself.

And despite its rapid rise to fame in the result of the British referendum, this sparsely worded Treaty provision still raises more questions that it answers.

It is important to underline that Article 50 TEU imposes substantive and procedural conditions on the withdrawing Member State. But once it has given notice under Article 50(1) TEU, all that the withdrawing Member State is apparently required to do, before the Treaties cease to apply, is to wait out the two-year period stipulated in Article 50(2) TEU.

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Brexit, The Supreme Court (UK) and the principle of loyalty: on the question of irrevocability of a withdrawal notice

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Supreme Court December 2016 - 01

by Alessandra Silveira, Editor
▪

Article 50, TEU is silent on several issues concerning the withdrawal of a Member State from the European Union. Such article establishes that the Member State shall notify the European Council of its withdrawal intention in accordance with its own constitutional requirements. But it does not provide for, for instance, about the hypothesis of revoking the notification of the withdrawal intention, perhaps – before the certainty of revocability – to prevent the Member States of being tempted to influence the destiny of the EU through a false threat of exit. Therefore the doubts raised by article 50, TEU will have to be solved in the light of the principles of the EU law, in special the principle of loyalty [Article 4(3), TEU]. According to this principle of friendly conduct, inherent to all known federative systems, the EU and the Member States respect and assist each other mutually in the fulfilment of the missions resulting from the Treaties.

In 24 January 2017, The Supreme Court issued its expected ruling on whether a notice withdrawing the UK from the EU Treaties can, under the UK’s constitutional arrangements, lawfully be given by Government ministers without prior authorisation by an Act of Parliament.[i] Probably to justify the absence of a reference for a preliminary ruling on the question of irrevocability of a withdrawal notice pursuant to Article 50 TEU, The Supreme Court  highlights that UK’s constitutional requirements are a matter of domestic law should be determined by UK judges. Moreover, The Supreme Court asserted that the issues in those appeals have nothing to do with political issues such as the merits of the decision to withdraw, the timetable and terms of so doing, or the details of any future relationship between the UK and the EU.

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R (Miller) v The Secretary of State for Exiting the European Union [2016] EWHC 2768 (Admin) : Realpolitik and the Revocation of an Article 50 TEU Notification to Withdraw

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by John Cotter, Senior Lecturer at University of Wolverhampton Law School
▪

The opening lines of a judgment – in common law jurisdictions, at least – can very often be revealing of a court’s concerns. The first five paragraphs of the collegiate High Court judgment (Lord Thomas CJ, Sir Terence Etherton MR and Sales LJ) in Miller indicate very clearly the judges’ worry that their judgment would be misunderstood by sections of the media and the wider public. This judgment did not have “any bearing on the question of the merits or demerits of a withdrawal of the [UK] from the [EU]”, the Court stated. Rather, the question before the Court was a narrow constitutional issue, and a purely legal matter: whether the government could use Royal prerogative powers to give notification of withdrawal from the EU pursuant to Article 50 TEU or whether this was a matter for the Houses of Parliament. On this question, the High Court ruled that the notification under Article 50 TEU may not be given by means of Royal prerogative; rather, such notification is a matter for Parliament exclusively. While the conducting of international relations and the signing of and withdrawal from international treaties were powers generally to be exercised by the executive on behalf of the Crown, the High Court reasoned that where withdrawal from a treaty would result in changes to domestic law (as withdrawal from the EU would), such withdrawal could not be effected without Parliament.

The Court’s attempt to avoid misinterpretation of its role appears, however, to have fallen on deaf or wilfully closed ears, with the judges being subjected to attacks in sections of the media that were astonishing even by the standards of Britain’s rather histrionic tabloid press (one publication’s front page contained the headline “Enemies of the People” along with photographs of the three judges). To many of those advocating Brexit, the judgment was an unelected court playing politics and frustrating the will of the people (even though the European Union Referendum Act 2015 had not provided that the referendum result be binding). To the Court’s defenders, the judgment was the latest in a line of rulings in which the courts upheld the supremacy of Parliament over Royal prerogative powers. It is certainly the case that the High Court judgment, if upheld by the Supreme Court (which is due to hear an appeal in early December), has the potential to make the giving of the Article 50 notification a more lengthy and complex process. It is conceivable that both Houses of Parliament could use their leverage to require the government to reveal more detail on their post-notification negotiating aims. However, as a matter of realpolitik, the judgment is unlikely prevent Article 50 being triggered: Labour, the largest opposition party in the Commons has indicated that it will not vote against a Bill to give notification under Article 50, and it is unlikely that the Lords would provoke further questions about their relevance in modern Britain by blocking Brexit.

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Brexit is going to happen, but…

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by João Alexandre Guimarães, Erasmus student at UMinho
▪

The New York Times says the British government’s plan for leaving the European Union was thrown into uncertainty on Thursday after the High Court ruled that Parliament must give its approval before the process can begin. “The court’s decision seemed likely to slow — but not halt — the British withdrawal from the bloc, a step approved by nearly 52 percent of voters in a June referendum. Nevertheless, the court’s decision was a significant blow to Prime Minister Theresa May“.

She had planned to begin the legal steps for leaving the European Union by the end of March, and to prepare for the negotiations over Britain’s exit mostly behind closed doors. If the court’s ruling is upheld — the government immediately vowed to appeal — that plan would be thrown into disarray, analysts said.

On CNN (also here), Jane Marrick says, this does not have to expose Britain’s detailed negotiating position with Brussels, but it should allow our democratically elected representatives to scrutinize the broad terms. It will also give the 48% who voted Remain — 16 million people — a voice that under the government’s plans they are currently denied.

Eleanor Garnier, from BBC, said this decision has huge implications, not just on the timing of Brexit but on the terms of Brexit. That’s because it’s given the initiative to those on the Remain side in the House of Commons who, it’s now likely, will argue Article 50 can only be triggered when Parliament is ready and that could mean when they’re happy with the terms of any future deal. Of course, it will be immensely difficult to satisfy and get agreement from all those MPs who voted to remain. Could an early general election be on the cards after all? , via BBC.

On the CJEU’s post-Brexit case-law on European citizenship. The recovery of the identity Ariadne’s thread?

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by Professor Alessandra Silveira, Editor
▪

The CJEU over the years has helped forging a concept of citizenship directed to be the “fundamental status of Member States nationals”. However, since the ruling Dereci of 2011, the proactivity of the CJEU concerning the development of the European citizenship seemed to have gradually exhausted its potentialities, mostly on the so-called social citizenship. It happens, tough, that the crucial moment the European Union faces demands the enhancement of its vertical relation with the citizens it upholds – it is either this or fragmentation. And maybe this is the subliminal message from the CJEU in three post-Brexit rulings that, decided in the Grand Chamber, surprisingly recover and develop the most emblematic case-law about the European citizenship – namely the Rottmann[i] and Zambrano[ii] rulings – whose political potential and/or identity potential seemed irrevocably muzzled.

In the ruling Rendón Marín[iii] and CS[iv], the core issue involved the expulsion and the automatic refusal of the concession of residence to third states nationals who have a dependent minor European citizen – in  both cases due to the parent’s criminal records. The CJEU recovered the Zambrano assertion, according to which Article 20, TFEU precludes national provisions that have the effect of depriving citizens of the Union of the genuine enjoyment of the substance of the rights conferred by virtue of their status as citizens of the Union[v] – and, in this sense, it must be attributed the derived right of residence to the national from a third State, under this risk of the useful effect of the European citizenship being affected, if the minor is forced to leave the territory of the Union to follow his/her parent[vi]. In both rulings, the novelty is the way the CJEU appreciates, in the light of the fundamental rights of the European citizen, the possibility of a Member State to introduce limits to such derived right of residence which arises from Article 20, TFEU.

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The voters have spoken. Brexit it is.

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by Catherine Barnard, Professor of European Union Law 
and the Jean Monnet Chair of EU Law 
in the Faculty of Law at the University of Cambridge

The voters have spoken. Brexit it is.

But what does Brexit in fact mean? Pulling up the drawbridge altogether or entering some special relationship with the EU? One possibility would be adopting EU law-lite, through membership of the European Economic Area. The UK would retain access to the single market but would still have to pay a membership fee and probably accept free movement of persons, at least in a modified form. What about free trade agreements like the one the EU has with Canada (which is not yet ratified)? But what would this mean for the UK’s flourishing services sector? There are some unpalatable choices ahead for politicians to make.

Meanwhile, there are some important constitutional questions to be addressed. What is required to trigger Article 50 TEU, the legal provision for a country to leave the European Union? Can the Prime Minister do it by way of the exercise of her prerogative (inherent) powers or will there need to be an Act of Parliament? This issue is currently being litigated in the British courts.

Once triggered, how long will the negotiation process take? The Article envisages two years, but with the possibility of an extension but only by unanimous agreement. How will the negotiations fit in with the elections in France and Germany when their leaders have their eye on domestic matters? Can the UK civil service, 25% smaller than in 2005, cope with the severe strains that Brexit will put it under? And what about the position of Scotland and Northern Ireland?

The Brexit vote was the easy bit. The hard work is about to begin.

___

Picture credits: ‘Brexit, Polling station sign for the EU referendum vote’, by Ungry Young Man.

A Perspective on Brexit

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by Elaine Dewhurst, Senior Lecturer in Law, University of Manchester

and Dimitrios Doukas, Reader in Law, University of Manchester

If there are two words that characterise the sentiments of many British-based academics anticipating Brexit, they would be ‘uncertainty’ and ‘sadness’. In the widest sense, there is uncertainty about the future of the EU as a project, and the place of non-British EU citizens living in the United Kingdom. Since the referendum result, the careers and livelihoods of those who benefit from EU research funding and collaboration and/or whose expertise lies predominantly or exclusively in areas of EU law have been marred by fear and doubt. Within the legal profession, for example, UK lawyers face an uphill challenge of seeking admission to a second Bar or Law Society, such as in Ireland, to enable them to continue enjoying the freedom to provide their services within the EU. Within legal academia, there is much speculation surrounding the furtherance of existing research projects, and recent studies suggest that collaborations and funding are at risk of termination as a result of the referendum. In addition, there is uncertainty over whether a post-Brexit Britain will retain a migration stream for academics which would match the free movement principles in terms of its encouragement of cross-border movement. For many, it is not just the professional difficulties that may deter academics from working in Britain. Some also have considered leaving Britain as they fear (or have already experienced) a rise in racism and xenophobia, a problem which may also discourage others from seeking work in Britain. More widely than this, there is fear of increasing and unchecked populist politics and anti-immigrant sentiment in the United Kingdom, an apprehension heightened because of Britain’s unadulterated majoritarian democracy in which EU law with its extensive judicial controls has heretofore performed an enforceable moderating influence. Uncertainty also mars the student experience. British universities have, and continue to, benefit financially and culturally from the many EU students who come to Britain every year to study. Reports suggest that the numbers of EU students applying to British universities has dropped since the referendum, and existing students have had to receive assurances as regards their position. Equally affected by this uncertainty are those British students wishing to participate in Erasmus programmes (a programme which has already benefitted over 200,000 British students).

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