European Council Decision of 11 April 2019 extending the Period under art 50 (3) of the Treaty of European Union to 31 Oct 2019

Donald Tusk

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Jane Lambert

Another of the uncertainties that I mentioned in my March Brexit Briefing was the outcome of the special Council meeting of 10 April 2019 which President Tusk called on 29 March 2019 after the draft withdrawal agreement of 14 Nov 2018  was rejected by the House of Commons for the third time.  The reason for the meeting was that the United Kingdom was due to leave the European Union at 23:00 on 12 April 2019.

Even before she was obliged to do so by s.1 of the European Union (Withdrawal) Act 2019, the Prime Minister applied for an extension of the notification of the period provided by art 50 (3) of the Treaty of European Union by a letter dated 5 April 2019.   The European Council referred to that letter in paragraph (8) of the recitals to its decision of 11 April 2019 extending that notice period to 31 Oct 2019 at the latest.

The decision consists of 14 paragraphs of recitals and 2 articles   Art 1 extends the notice period from 12 April 2019 to 31 Oct 2019. Art 2 inserts the condition of holding elections to the Europen Parliament on 22 May 2019 warning:

"This decision shall cease to apply on 31 May 2019 in the event that the United Kingdom has not held elections to the European Parliament in accordance with applicable Union law and has not ratified the Withdrawal Agreement by 22 May 2019."

As the Council also recited in paragraph (9):

"...... under Article 50(3) TEU, the Withdrawal Agreement may enter into force on an earlier date, should the Parties complete their respective ratification procedures before 31 October 2019. Consequently, the withdrawal should take place on the first day of the month following the completion of the ratification procedures or on 1 November 2019, whichever is the earliest. "

As several MPs had urged the British government to disrupt the EU's business if it were granted a long adjournment paragraph (10) of the recitals noted:

"This further extension cannot be allowed to undermine the regular functioning of the Union and its institutions. Furthermore, it will have the consequence that the United Kingdom will remain a Member State until the new withdrawal date, with full rights and obligations in accordance with Article 50 TEU, and that the United Kingdom has a right to revoke its notification at any time. If the United Kingdom is still a Member State on 23-26 May 2019, and if it has not ratified the Withdrawal Agreement by 22 May 2019, it will be under an obligation to hold the elections to the European Parliament in accordance with Union law. In the event that those elections do not take place in the United Kingdom, the extension should cease on 31 May 2019. The European Council takes note of the commitment by the United Kingdom to act in a constructive and responsible manner throughout the extension period in accordance with the duty of sincere cooperation, and expects the United Kingdom to fulfil this commitment and Treaty obligation in a manner that reflects its situation as a withdrawing Member State. To this effect, the United Kingdom shall facilitate the achievement of the Union’s tasks and shall refrain from any measure which could jeopardise the attainment of the Union’s objectives, in particular when participating in the decision-making processes of the Union."

The decision  also made clear in paragraph (12) of the recitals that the withdrawal agreement could not be renegotiated:

"This extension excludes any re-opening of the Withdrawal Agreement. Any unilateral commitment, statement or other act by the United Kingdom should be compatible with the letter and the spirit of the Withdrawal Agreement, and must not hamper its implementation. Such an extension cannot be used to start negotiations on the future relationship."

Anyone wishing to discuss this article or brexit generally may call me on 020 7404n 5252 during office hours or send me a message through my contact page.

The Best that can be achieved from the Withdrawal Agreement Negotiations and the Likelihood of achieving it

Jane Lambert

In Hope for the best but prepare for the worst 22 June 2018, I advised businesses of all kinds to make risk assessments and draw up contingency plans for the UK's departure from the EU without a withdrawal agreement.  Comparing what needs to be done before 29 March 2019 with what has been achieved to date it has become increasingly unlikely that such an agreement can be concluded and ratified in time. 

The remaining 27 member states appear to be of a similar view.  In a statement following the Council meeting of 28 and 29 June 2018 President Tusk said:

"On Brexit. The EU27 has taken note of what has been achieved so far. However, there is a great deal of work ahead, and the most difficult tasks are still unresolved. If we want to reach a deal in October we need quick progress. This is the last call to lay the cards on the table."

This was amplified in the  Conclusions of the Council of 29 June 2018. 

While the governments of the remaining 27 member states welcomed the progress mentioned in the  joint statement from the negotiators of the European Union and the United Kingdom Government on progress of negotiations under Article 50 TEU on the United Kingdom's orderly withdrawal from the European Union, they noted that "other important aspects still need to be agreed, including the territorial application of the Withdrawal Agreement, notably as regards Gibraltar." They expressed concern that no substantial progress had been achieved on a backstop solution for the Irish border despite British commitments made in December 2017 and March 2018, and that negotiations can only progress as long as all commitments undertaken so far are respected in full.

The remaining member states also concluded that work must be accelerated with a view to preparing a political declaration on the framework for a future relationship between the UK and EU.  Such a political declaration would have to appear in a withdrawal agreement because the EU 27 made plain in paragraph 6 of their Guidelines of 15 Dec 2017 that an agreement on a future partnership can only be concluded after the UK leaves the EU.  In paragraph 8 of their Guidelines of 23 March 2018 the 27 remaining states emphasized that although they were prepared to countenance a  "balanced, ambitious and wide-ranging free trade agreement" such an agreement could not offer the same benefits as EU membership and or allow participation in the single market or parts thereof.  

It could, however, cover such matters as:

"i) trade in goods, with the aim of covering all sectors and seeking to maintain zero tariffs and no quantitative restrictions with appropriate accompanying rules of origin. In the overall context of the FTA, existing reciprocal access to fishing waters and resources should be maintained;
ii) appropriate customs cooperation, preserving the regulatory and jurisdictional autonomy of the parties and the integrity of the EU Customs Union;
iii) disciplines on technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures;
iv) a framework for voluntary regulatory cooperation;
v) trade in services, with the aim of allowing market access to provide services under host state rules, including as regards right of establishment for providers, to an extent consistent with the fact that the UK will become a third country and the Union and the UK will no longer share a common regulatory, supervisory, enforcement and judiciary framework;
vi) access to public procurement markets, investments and protection of intellectual property rights, including geographical indications, and other areas of interest to the Union."

There could also be collaboration on climate change, sustainable development and pollution control. Agreement could be reached on free movement of people, recognition of professional qualifications and judicial cooperation, transport and scientific research and development.

Such an agreement would go a long way towards ensuring the continuation of integrated manufacturing in industries like motor manufacturing and aerospace and the provision of financial and professional services by the city of London. That is the best possible outcome that could be hoped for.  Both sides want it but it is increasingly unlikely that they will be able to deliver it by the end of March.

Anyone wishing to discuss this article or Brexit in general should call me on +44 (0)20 7404 5252 or send me a message through my contact form.

Brexit Briefing - October 2017

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Jane Lambert

For much of the month, attention in Britain has shifted away from Brexit to domestic concerns for two reasons. First, a spate of complaints of serious misconduct by politicians on both the left and the right which resulted in the resignation of two senior ministers, the withdrawal of the whip from several more and a tragic suicide.  Secondly, a frosty but not quite frozen communiqué of the 27 remaining EU member states at their Council meeting on 20 Oct 2017 which offered the hope of negotiations on the UK's future relationship with the EU (see the Conclusions 20 Oct 2017). Thought has at last been given to the nature of that future relationship.

On the 9 Nov 2017 Charles Grant, Director of the Centre for European Reform. published his predictions on how Brexit will unfold in The Guardian (see Charles Grant How Brexit will unfold – Britain will get a deal, but it’ll come at a price The Guardian 9 Nov 2017).  In his view, there will be:
1. A deal on citizens' rights, Ireland and the divorce settlement in December 2017;

2. A hard border between the Republic of Ireland and Northern Ireland;

3. A transitional arrangement on the EU’s terms;

4. No agreement on the future relationship between the EU and the UK before the UK leaves the EU;

5. No detailed proposals from the UK on a future economic partnership;

6. No bespoke agreement for the UK;

7. Some access to the single market in some sectors;

8. No undercutting by the UK of EU regulatory standards;

9. No preferential access to the EU's financial markets for the British financial services industries; and

10. Some kind of free trade agreement between the EU and UK.

That is probably the best that can be expected from the negotiations. There are many who fear that no deal will be reached at all.  The Confederation of German Industry, the German equivalent of the CBI, has warned its members who trade with or invest in Britain to prepare for a very hard Brexit indeed (see German Industry Federation advises its Members to prepare for a Hard Brexit 5 Oct 2017). As the UK will cease to be represented by the EU in international trade negotiations, the British and EU  representatives to the World Trade Organization have indicated to the other contracting parties how they will collaborate (see UK's Future Relationship with the World Trade Organization 16 Oct 2017).

It is said that progress in the negotiations has stalled over money and that may well be the case in the short term. In the long term, however, it is likely to be the absence of a means of holding the UK to account if it refuses to acknowledge the jurisdiction of the Court of Justice of the European Union. The Institute of Government considered a number of alternatives in Some Proposals for Dispute Resolution from the Institute for Government 8 Oct 2017 none of which is entirely satisfactory. As the issue has arisen first in the protection of citizens' rights, it is worth looking at HMG's Technical Note: Citizens; Rights - Administrative Procedures in the UK. I would not be attracted by those proposals if I were a negotiator for the EU 27. I think it is overly optimistic to expect a deal by December, but we shall see.

In the meantime, if you want to discuss this article or Brexit in general, call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.