European Commission publishes proposals for negotiation of withdrawal agreement

Posted in UK and EU legal framework

On 3 May 2017, the European Commission published its recommendations for negotiation of the UK’s withdrawal from the EU. 

The proposals seek to build on the draft guidelines previously published by the European Council and endorses the notion of a phased approach to negotiations as set out in our earlier blog post.

The Commission’s recommendations focus only on the terms of withdrawal, but set out firm and wide ranging objectives for the withdrawal agreement.

In particular, the Commission asserts that there should be a single financial settlement based on the principle that the UK “must honour its share of the financing of all obligations undertaken while it was a member of the [EU]”. 

Although no figure is mentioned, the proposal goes on to state that the withdrawal agreement should contain (amongst other things): “A calculation of the global amount that the United Kingdom has to honour in order to settle its financial obligations toward the [EU] budget, all institutions or bodies established by the Treaties, and other issues with a financial impact”.

Much of the rest of the Commission’s proposal is taken up with the question of citizen’s rights: an issue, which, along with that of any financial settlement, has generated a large amount of publicity. The passage which has attracted most attention is the Commission’s suggestion that an agreement protecting the rights of EU citizens should also cover “their family members who accompany them or join them at any point in time before or after the withdrawal date” (para.21 - emphasis added). It remains to be seen how the UK Government will approach this question.

The proposals also addressed the status of goods marketed across the EU. In the Commission’s view, the withdrawal agreement should provide that any goods lawfully placed on the market before the date of the UK’s withdrawal should remain available on the market or put into service after that date, both in the UK and the EU.

Finally, from a legal perspective, the proposals address several key issues. According to the Commission stipulate that:

  • The withdrawal agreement should ensure that the recognition and execution of decisions of national courts handed down before the withdrawal date remain governed by the relevant provisions of EU law (i.e. the Brussels Recast Regulation) applicable before the withdrawal The agreement should also ensure the continued application of the rules of EU law relating to choices of forum and choices of law made before the withdrawal date ; and
  • The CJEU should remain competent to determine proceedings pending before it as at the date of the UK’s departure – and its rulings binding on the UK. Indeed, the Commission goes on to state that the withdrawal agreement should provide for the possibility to commence proceedings before the CJEU after the date of withdrawal in respect of matters which occurred before the withdrawal date.

The above provisions are aimed at ensuring legal certainty for citizens and businesses during the process of withdrawal. However, in view of the UK Government’s stated desire to remove the UK from the jurisdiction of the CJEU, it remains to be seen whether the UK will accede to such proposals on the basis that they represent no more than a transitional arrangement, or whether the UK attempts to adopt a more hard-line approach to the forthcoming negotiations.

Perhaps of greatest significance, the Commission sets out proposals for settlement of disputes arising out of, and enforcement of, any withdrawal agreement and suggests that in this regard, the jurisdiction of the CJEU should be maintained. It adds that in relation to provisions of the withdrawal agreement other than those relating to EU law, an alternative dispute settlement should only be envisaged if it offers “equivalent guarantees of independence and impartiality” to the CJEU. This could turn out to be a particularly contentious issue, but one that will need to be addressed by the parties.

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