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Brexit

 

On 13 March 2017, the UK Parliament passed the European Union (Notification of Withdrawal) Bill which confirmed the results of the 23 June 2016 UK referendum. The bill received Royal Assent and became an Act of Parliament on 16 March 2017. Just under two weeks later, on 29 March 2017, Theresa May officially triggered the process for withdrawing the UK from the EU with a letter (‘Article 50 letter’) delivered to President Donald Tusk by UK envoy Tim Barrow. The next day, the UK government tabled a White Paper on the design and implementation of legislation (commonly referred to as the Great Repeal Bill) which will repeal the European Communities Act 1972 and, at the same time, convert the body of existing European law (the ‘aquis’) into UK law (where it is practical and appropriate to do so). In turn, on 31 March 2017 the European Council circulated draft guidelines to government ministers representing the 27 member states remaining in the EU (‘EU27’). Once finalised and adopted on 29 April 2017, they will inform the EU27’s approach to the UK/EU27 Brexit negotiations. The final week of March 2017 was undeniably historic as will be the two-year process the withdrawal letter triggered.

The prime minister’s Article 50 letter confirms the objectives detailed in her 19 January 2017 Lancaster House speech, and reiterates that:

  • The UK is leaving the EU, but not leaving Europe.
  • Legal certainty and clarity is a priority.
  • The UK will be seeking a comprehensive agreement governing the future terms of the UK/EU27 partnership, which takes in economic and security cooperation, in parallel with an agreement on withdrawal.
  • If the UK leaves the EU without a partnership agreement, it would trade on the basis of World Trade Organization (WTO) rules (i.e. no deal is better for Britain than a bad deal).

Mrs May’s Article 50 letter also suggests that the discussions between the UK and EU27 be guided by several key principles, the implications of which are:

  • The UK is not seeking membership in the single market (which would also allow the UK to pursue the new trade deals as signalled in the Lancaster House speech).
  • An early agreement on the rights of UK citizens residing in any of the EU27 member states, and the rights of citizens from EU27 member states residing in the UK.
  • Implementation periods be included in the new arrangements, in the interests of avoiding cliff-edge effects.
  • The need to avoid a return to a hard border between Ireland and Northern Ireland, that nothing is done to jeopardise the peace process in Northern Ireland, and that the Belfast Agreement should continue to be upheld.

Mrs May also stated that the UK will negotiate as one country and that when it comes to the repatriation of powers back to the UK, it is expected that the outcome of an internal (UK) consultation process would be a significant increase in the decision-making power of the devolved administrations in Scotland, Wales and Northern Ireland.

The draft guidelines circulated by the European Council on the framework that will define the EU27’s negotiations with the UK are subject to revision before they are finalised and may yet be influenced by the 6 April 2017 European Parliament resolution on Brexit red lines. Nonetheless, the draft guidelines:

  • Confirm that, on the date of withdrawal, the EU treaties will cease to apply to the UK and its overseas countries and territories associated with the Union, and to the territories for whose external relations the UK is responsible. However, in regard to Gibraltar, a caveat has been included that no agreement between the UK and the EU may apply to the territory of Gibraltar without an agreement between the UK and Spain. (Fabian Picardo, chief minister of Gibraltar, discussed this caveat in the second quarter of the 2 April Andrew Marr show, and Spain’s foreign minister suggested it was only included to defend the interests of its citizens who live near, and work in, the territory).
  • Make some provision for a phased approach to negotiations (rather than a parallel one) whereby the first phase would focus on an orderly withdrawal, and only once sufficient progress has been made would negotiations proceed to the second phase to arrive at an overall understanding on the framework for a future relationship.
  • Suggest that the negotiations will seek to determine transitional arrangements and provide for bridges towards a foreseeable relationship.
  • State that an agreement for an orderly withdrawal includes a single financial settlement (i.e. the ‘divorce bill’ for which estimates range from £20 billion to £60 billion).
  • Suggest that, with regard to the relationship between the UK and the Republic of Ireland, ‘flexible and imaginative solutions’ to avoid a hard border be examined.

In this changing environment and where negotiations are likely to be volatile and characterised by unhelpful positioning – as perhaps foreshadowed by the discussion around Gibraltar and Spain’s Foreign Minister’s remarks that while Spain did not want to see Scotland leave the UK it would not necessarily veto a Scottish application for EU membership – ADM will focus on conveying the facts as they become available, and identifying the documents that are often referred to in the press but are not always easy to locate.

We will be updating this Brexit information section with these facts together with our understanding of how key documents are structured, relate to each other and might inform the negotiations between the UK and the remaining 27 member states in the EU.

Each entry in our Brexit section is hyperlinked to the web-based resources we used to develop the entry. Currently we do not charge for the information provided, and hope readers find the materials helpful. If you would like to get in touch to discuss how we might help you with your Brexit strategy and plans, do please feel free to contact us.

We also remind readers that commentary provided by ADM does not constitute legal advice.

Our Brexit section is organised into the following subsections:

1. Key UK Players

2. Key EU Players

3. Article 50 – key facts

4. EU trade facts, WTO and other bilateral agreements

5. Other trade models

6. Financial services – evolving policy and advocacy from the UK

7. Financial services – passporting and equivalence

The discussion in each subsection includes hyperlinks to many of the source articles that provided a basis for the material presented. We have sought to use articles from an array of sources to reflect a spectrum of political opinion. However, as factual reports produced by governmental bodies can be presented in a biased fashion, further links are provided to aid readers who might be looking for more transparency and detail.

Brexit will inevitably introduce a whole new set of acronyms. The following is a list of those that are in general use:

EEA: European Economic Area (Iceland, Liechtenstein and Norway, plus the 28 EU member states)

EFTA: European Free Trade Area (Iceland, Liechtenstein, Norway and Switzerland)

EU: European Union (28 EU member states including the UK)

EU27: European Union (the 27 member states that will remain after the UK’s departure)

TEU: Treaty on European Union

TFEU: Treaty on the Functioning of the European Union

 

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