Brexit: the Government triggers Article 50Print publication
On 29 March 2017, nine months after the UK’s Brexit referendum vote of 23 June 2016, the UK Government gave notice of the UK’s intention to leave the European Union in accordance with Article 50(2) of the Treaty on the European Union. The notification took the form of a six page letter, which was given by Sir Tim Barrow (Britain’s ambassador to the EU) to Donald Tusk (the EU Council president). The Brexit process is now formally under way.
The UK and the EU will have two years to negotiate a withdrawal agreement (unless this timeframe is extended by agreement between the UK and EU Member States). For now, the UK remains part of the EU until exit. In practical terms, nothing has changed with the triggering of Article 50, except that the timetable has crystallised.
Article 50 letter
The six page letter triggering Article 50 sets out the Government’s approach to the discussions regarding the UK’s exit from the EU and the UK’s future partnership with the EU after Brexit. The main points to note in the letter are set out below:
- The letter states that the UK wants a “deep and special partnership” with the EU “as your closest friend and neighbour”.
- The letter confirms that the UK will no longer be part of a single market (as set out in the Prime Ministers Speech of 17 January 2017), but it is the Government’s desire to reach a comprehensive UK-EU free trade agreement. The Government recognises that it will be a challenge to reach such a comprehensive agreement within the two-year period set under Article 50 for withdrawal discussions, but says that this can be done. The Government acknowledges that failure to reach an agreement in relation to the future relationship prior to the UK’s departure would result in the UK and the EU trading on World Trade Organisation terms, but it indicates that this would also result in weakened co-operation on issues relating to security.
- The letter calls for negotiations on withdrawal and on the future relationship between the EU and the UK to take place in parallel, a point which has been rejected by the European Commission.
- The departure process should be “fair and orderly… with as little disruption as possible on each side”. The letter adds that both the EU and the UK would “benefit from implementation periods to adjust in a smooth and orderly way to the new arrangements”. In other words, there should be transitional arrangements.
- The letter confirms that the Government will publish a White Paper on 30 March 2017 on the Great Repeal Bill. The Great Repeal Bill will repeal the European Communities Act 1972 and will convert the existing body of EU law into domestic law in order to ensure certainty for both UK citizens and those doing business in the UK.
- In relation to the future legal and regulatory framework, the letter acknowledges that UK companies trading with the EU after Brexit will have to align with the rules agreed by institutions of which the UK is no longer a part, just as UK companies do in other overseas markets.
- The letter states that the EU and UK should reach an early agreement about the rights of EU citizens living in the UK and UK citizens living in the EU.
The European Council’s response to the UK’s notification
On 29 March 2017, the European Council issued an immediate statement acknowledging receipt of the UK’s Article 50 notice. The statement includes the following points:
- The first step for the EU is to adopt guidelines for the negotiations by the European Council. The UK will, naturally, not be part of this process. The guidelines will set out the overall positions and principles in light of which the EU (represented by the European Commission) will negotiate with the UK. Mr Tusk has said the draft guidelines will be ready by 31 March 2017. A special European Council meeting has been scheduled for 29 April 2017 to adopt the guidelines, which will need to be approved unanimously by the heads of the remaining 27 Member States. Once agreed, the European Commission will use the guidelines to draft a more detailed negotiating mandate.
- The first priority in these negotiations is to minimise the uncertainty for EU citizens, businesses and Member States caused by the UK’s decision. The initial focus will be on all key arrangements for an orderly withdrawal.
The negotiations will begin once the detailed aims have been drawn up in the form of Council directives for approval by the remaining 27 EU Member States. This will probably take place in June 2017 or July 2017.
A Commission team, headed by Michel Barnier (a former French Minister and European Commissioner) and which is already in place, will lead the negotiations for the remaining 27 EU Member States. Their governments will input into the process through a Council Working Party chaired by Belgian diplomat Didier Seeuws. The European Parliament’s lead Brexit negotiator is Guy Verhofstadt (a former Belgian Prime Minister), who will have no formal role but is expected to be closely associated with the talks.
The negotiations will proceed against a backdrop of political uncertainty: the French presidential elections on 23 April 2017, with a likely second round on 7 May 2017, followed by parliamentary elections in June 2017; a general election in Germany on 24 September 2017; and an Italian general election early next year. Each of these events could potentially have a major impact on the negotiations.
In autumn 2017, the UK Government is expected to introduce the Great Repeal Bill to leave the EU and adopt the existing EU laws as British laws. A raft of other primary and secondary legislation will also be required to put in place new policies and administrative processes in a wide range of areas such as customs, trade and immigration. This must be done before the UK exits the EU, which poses a difficult challenge.
What will happen at the end of the two-year negotiation period is still unknown – talks could result in anything from a final agreement to an extension of time, or to the UK leaving the EU with no deal and years of negotiation to follow.
If you should like to discuss the above, or any implications for your business, please contact Trudy Feaster-Gee (Partner, Barrister) in the first instance.