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Issue 49

Legal Brexit

Claudia Jelea
Avocat & Consilier in domeniul marcilor
@IP Boutique
OTHERS

As you well know, stormy clouds have recently swept across the European sky. The 23rd of June 2016 marked the Brexit referendum. Great Britain voted to leave the European Union (EU).

Upon hearing the news, several people expressed their shock and anger, which was quickly covered by the media, the social media, the Internet and on TV. As a result, the political, financial, economic and social implications of Great Britain’s exit from the EU started to unfold. All led to a bleak prognosis. The juridical implications soon followed.

It is provocative and risky to make predictions in terms of the juridical impact the Brexit will have on EU countries, but the uncertainty that has been going around shows that nobody really knows what will happen, when it will happen and how it will happen.

Why is this so? The EU does not really have any experience regarding the exit of member states. It is true that there is a legal text that sets the rules which could enable a member state “to leave” the EU, but, at the moment, - we do not know how the exit will actually take place.

However, until the exit, we would like to discuss what is happening at the moment and what might happen in the near future.

What changed on the 23rd of June?

Nothing has changed so far. Many of you have already found out that the result of the referendum has a consultative role and that it does not need to take legal effect. Nevertheless, the vote might be considered undemocratic if the opinion of the majority were ignored.

In practice, the process of negotiating a Brexit will start when the British government will notify the Council of Europe of its intention to withdraw, on the basis of Article 50 which is part of the EU Treaty (TUE/EUT – code version). The process should be finalized after 2 years have passed, following the notification date, but the duration can be extended if the consent of all EU member states is reached. In a report which tackles the entire exit process, the British Government estimates that up to a decade or more would be needed for a full EU exit and for agreements between the UK and the EU to be in place.

Therefore, until the official exit (meaning that the UK will cease to be an EU member state), the British are still EU citizens, the EU laws are still enforced and the commercial relations between the UK and the EU follow (almost) as before the referendum.

The message conveyed so far is: “business as usual”.

Nevertheless, we must ask ourselves what the Brexit might trigger in terms of the legal aspects that govern the UK’s relation with the EU member states that are left. Foreign experts believe that the answer to this question relies on the negotiations regarding the exit and the future agreements between the UK and the EU. For example, a solution might be for the UK to be part of the European Economic Space (EES), as Norway is.

What can change in the case of a Brexit?

Irrespective of the shape and form the Brexit will take, one thing is clear: the rights and obligations of economic agents from various domains and industries will be influenced by this “divorce”.

In addition to the social and political problems: the status of British residents in other EU member states or the status of EU citizens in the UK, the status of EU students in the UK, the EU budget resolution etc., there would be practical difficulties in the commercial relations between EU states and the UK.

Below, we will highlight only some of the many legal consequences that we should consider. However, if you wish to get deeper into the subject matter and find more information about the implications of the Brexit on various fields (finances, taxes, employee rights and employer rights, competitors, stock markets, insurance, aviation, etc.), you can consult the material that I gathered to write this article, material which you can find in the annexed bibliography.

Solutions can and must be found. One solution could be for Great Britain to join the EU again.

References

  1. Greenland (autonomous territory, part of the Danish Kingdom) left the European Community (EU’s predecessor) in 1985.
  2. Article issue date – 1st of July 2016.
  3. The Council of Europe includes: the presidents or the chiefs of the governments (the PMs) of the 28 member states, the president of the Council of Europe and the President of the European Commission.
  4. What does Article 50 state?

    1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.

    2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

    3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

    4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it. A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.

    5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.”

  5. This is the only entity which handles patents and which could handle court cases on Unified European Patents and the European patents issued on the basis of the laws of the European Patent Convention.
  6. General Data Protection Regulation GDPR direclty applies in all EU member states, without any national implementation law.
  7. European Patent Convention
  8. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/503908/54538_EU_Series_No2_Accessible.pdf
  9. http://www.nytimes.com/reuters/2016/06/24/world/europe/24reuters-britain-eu-procedure-factbox.html?_r=1

  10. http://www.eversheds.com/global/en/what/publications/brexit/index.page#.V2001RnJZNl.linkedin

  11. http://www.eversheds.com/global/en/what/articles/index.page?ArticleID=en/Data-Protection/brexit_impact_on_dataprotection_240616

  12. https://iapp.org/news/a/for-privacy-pros-brexit-nothing-to-panic-about-2/

  13. https://fullfact.org/europe/how-eu-works-leaving-eu/

  14. http://blogs.wsj.com/law/2016/06/24/legal-implications-of-brexit-are-vast-and-uncertain/

  15. http://ukandeu.ac.uk/legal-implications-of-renegotiation-and-withdrawal/

  16. http://www.cms-lawnow.com/brexit

  17. http://www.allenovery.com/news/en-gb/articles/Pages/Brexit.aspx

  18. http://f.datasrvr.com/fr1/416/29139/AO_Brexit_call_24_June_2016_-_summary.pdf

  19. http://www.eversheds.com/global/en/what/publications/brexit/decision.page

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