Inside Brexit blog

Tracking legal developments

The UK invokes Article 50

Emma Giddings
Kenneth Gray
Adam Sanitt
Andrew Sheftel

The UK Government has today formally given notice of the UK’s intention to leave the EU in accordance with Article 50(2) of the Treaty on European Union. The notification took the form of a six-page letter from the Prime Minister, Theresa May, to the President of the European Council, Donald Tusk.

This marks the start of the process of the UK’s withdrawal from the EU.

Negotiations will take place between the UK and the European Commission, as EU negotiator, based on guidelines to be issued by the European Council and in accordance with article 218(3) of the Treaty on the Functioning of the European Union (TFEU). The UK will automatically cease to be a member of the EU at the end of two years if no agreement is reached before then. Although this negotiating period can be extended, this will require the agreement of all EU member states. 

Of particular interest will be whether the initial negotiations are limited to the terms of the UK’s withdrawal or will also include details of the UK’s new trading arrangement with the EU. Article 50(2) provides that the EU “shall negotiate and conclude an agreement with [the departing state], setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union” (emphasis added).

It is clear that the UK Government intends that the negotiations cover the UK’s future relationship with the EU alongside the terms of the UK’s withdrawal. This was made explicit both in Theresa May’s statement to the UK Parliament announcing the Article 50 notification, and in the letter itself. The European Commission and Parliament have both indicated that they expect the withdrawal agreement to be addressed first.

The letter sets out seven principles identified by the UK for the forthcoming discussions. They are that the EU and the UK should:

  1. engage with one another constructively and respectfully, in a sincere spirit of co-operation;
  2. always put our citizens first;
  3. work towards securing a comprehensive agreement;
  4. work together to minimise disruption and give as much certainty as possible;
  5. pay attention in particular to the UK’s unique relationship with the Republic of Ireland and the importance of the peace process in Northern Ireland;
  6. begin technical talks on detailed policy areas as soon as possible, but prioritise the biggest challenges; and
  7. continue to work together to advance and protect shared European values.

There are several points of note:

There is confirmation that the UK will no longer be part of the single market, but the notification nevertheless repeats the Government’s desire for a comprehensive free trade agreement between the UK and the EU. The letter acknowledges that failure to reach agreement as to the future relationship prior to the UK’s departure would result in the UK and EU trading on WTO terms, but indicates that this would also result in weakened co-operation on issues of security.

The letter also states the UK’s intention that such agreement should be reached prior to the UK’s departure from the EU to avoid any ‘cliff-edge’. It calls for implementation periods to allow businesses ‘to adjust in a smooth and orderly way to new arrangements’. On this issue, there have recently been reports that the European Parliament would not agree to transitional arrangements lasting longer than three years. 

Separately, from a legal perspective, the notification letter reiterates the Government’s intention to convert the existing body of EU law into domestic law so as to ensure certainty for both UK citizens and those doing business in the UK – what the Government has elsewhere described as the Great Repeal Bill. Reference is also made to ‘several other pieces of legislation’ relating to the UK’s departure. The letter confirms that such legislation will only come into effect upon the UK’s departure and that the UK will honour its responsibilities as a Member State in the interim.

With regard to the future legal and regulatory framework, the letter acknowledges that UK companies trading with the EU post-Brexit will have to align with the rules of EU institutions. However, the Prime Minister also notes that as an existing Member State, the UK already has the same regulatory frameworks and standards as the EU – perhaps a reference to notions of equivalence and possible mutual recognition of standards. The letter goes on to urge that the UK and EU prioritise management of the evolution of regulatory frameworks both to ensure continued fair and open trading but also to resolve future disputes. This reflects the proposal in the Government’s earlier White Paper for a new dispute resolution mechanism to operate between the UK and the EU, perhaps akin to the dispute resolution provisions within CETA or similar international agreements. 

The European Council released an immediate response acknowledging receipt of the UK’s notification and stating that the first step will to adopt guidelines for the negotiations by the European Council. How the EU responds substantively to the UK’s initial proposals will become clearer in the coming weeks and months. 

Brexit: planning for the future as negotiations continue

We have created this Brexit blog to provide up to date analysis and legal commentary as the new Brexit landscape evolves, addressing key questions and topics of interest to our clients across the different industry sectors in which they operate.

Blog Network