The United Kingdom Is Leaving The European Union

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The United Kingdom Is Leaving The European Union

Transcript Of The United Kingdom Is Leaving The European Union

THE UNITED KINGDOM IS LEAVING THE EUROPEAN UNION: ANALYZING THE CONTRACTUAL AND LEGAL IMPLICATIONS FOR A MEMBER LEAVING
Duncan A. Taylor*
I. INTRODUCTION
On June 23, 2016, the United Kingdom, consisting of England, Scotland, Wales, and Northern Ireland, participated in a referendum to determine whether the bloc of countries would maintain membership and remain in the European Union or withdraw.1 Seventy-two percent of 46,501,241 eligible voters voted in this referendum, with “Leave” receiving 51.9% of the votes and “Remain” receiving 48.1% of the votes.2 Despite the overall national results, very different results were seen throughout the countries of the United Kingdom.3 England and Wales narrowly voted to leave the European Union, while an overwhelming majority of voters in Scotland and Northern Ireland chose to remain.4 This significant historic event in the United Kingdom, now termed “Brexit,” was influenced by two distinct ideologies and groups; “Britain Stronger in Europe” and “Vote Leave,”5 each of which attracted the involvement of other groups, entities, and individuals.6
Part I of this Comment provides a history of the United Kingdom as it relates to membership in the European Union, the abilities for the countries
* Duncan A. Taylor is a third-year law student at Southern Illinois University School of Law, expecting his Juris Doctor in May of 2018. He would like to thank his faculty advisor, Professor Cindy Buys, for his continued guidance and feedback throughout the writing process. He would also like to thank his friends and family for their substantial support and encouragement.
1. Alex Hunt & Brian Wheeler, Brexit: All you need to know about the UK leaving the EU, B.B.C. NEWS (Oct. 2, 2016), http://www.bbc.com/news/uk-politics-32810887.
2. EU Referendum Results, B.B.C. NEWS (June 23, 2016), http://www.bbc.com/news/ politics/eu_referendum/results.
3. Id. 4. Id. (explaining the first vote outcomes as such: in England, 53.4% of voters choose to leave the
European Union; in Wales, 52.5% of voters chose to leave; in Scotland, 62% of voters chose to remain in the European Union; in Northern Ireland, 55.8% of voters chose to remain.). 5. Hunt & Wheeler, supra note 1. 6. Id. (Theresa May and the United Kingdom officially began the process of leaving the European Union on June 19, 2017, following “Brexit” officially being triggered on March 29, 2017 before the European Council. The talks began following a general election on June 8, 2017, in which Theresa May and the Conservative Party lost the majority, but were able to create a coalition with the Democrat Unionist Party to ensure an exit from the European Union would still occur for the United Kingdom.).
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in the United Kingdom to gain membership in the European Union, and the factors surrounding the United Kingdom desire to leave the European Union. This section also discusses the European Union, the interconnectedness of the treaties forming this organization, and the process of leaving the bloc of nations. The 1972 European Communities Act, the Lisbon Treaty, the Treaty of the European Union, and the Treaty on the Functioning of the European Union will be specific areas of focus because of their impacts on membership in the European Union and process of withdrawing membership. This section concludes by discussing the Norway and Liechtenstein Plans, both of which helped the country negotiate a limited relationship with the European Union. Part II analyzes the information related to the United Kingdom leaving the European Union domestically and internationally and attempts to identify the pertinent and related contractual and legal obligations that will impact leaving the European Union. Part III offers solutions to the difficulties that the United Kingdom will encounter as a result of leaving the European Union and offers amendments that the European Union could enact to more directly address a Member-State leaving.

II. BACKGROUND

The United Kingdom applied to join the European Economic Community (EEC), a predecessor of the European Union, on August 1, 1961, but did not become a member of the Community until January 1, 1973.7 This eleven-year delay between the United Kingdom’s application and accession to the EEC was due to French President Charles De Gaulle.8 De Gaulle was concerned that allowing the United Kingdom and other Atlantic nations into the EEC would eventually allow the United States to play a vital role in the organization’s domestic and foreign affairs.9 This initial contention between the United Kingdom and the EEC would foreshadow the subsequent problems between the United Kingdom and the European Union. To better understand the United Kingdom as it relates to the European Union, it is first important to discuss the European Union, the treaties associated with the organization and membership, and process for leaving the European Union.

A. The European Union

On March 25, 1957, Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands entered into the Treaty Establishing the

7. A timeline of Britain’s EU membership, THE GUARDIAN (June 25, 2016), https://www.theguardian.com/politics/2016/jun/25/a-timeline-of-britains-eu-membership-inguardian-reporting.
8. Id. 9. Id.

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European Economic Community, informally referred to as the Treaty of Rome.10 This treaty not only established the EEC, but created the common market envisioned by members and laid groundwork for the creation of the European Union.11 All members of the European [Economic] Community subsequently signed the Maastricht Treaty, also known and currently in force as the amended Treaty on the European Union.12 This treaty became effective on November 1, 1993, which established the European Union and granted European Union citizenship to all people residing in a member state.13
Further, the agreement encouraged all countries to implement common foreign, security, and banking policies.14 The Treaty of Lisbon Amending the Treaty on the European Union and the Treaty Establishing the European Community, effective as of December 1, 2009, amended the Maastricht Treaty and the Treaty of Rome, simplifying the European Union’s governing documents by amending the Treaty on the European Union and the Treaty on the Functioning of the European Union.15 These treaties helped create the current European Union system and contain all provisions that member states must abide by to maintain membership.16 Therefore, these provisions are crucial for the purpose and function of the European Union.

B. Purpose and Function of the European Union

Initially, the European Union originated as an economic association and it has continued to evolve and encompass other governmental aspects, such as creating common policies and a common currency, and enabling the free movement of all people in Member-States.17 With the integration of some European States under a common union, strong language has been written into the constitutional treaty to protect human rights, reduce poverty, protect the environment, and promote the common internal market.18 These ideas, most notably the common market allowing the free movement of people and

10. Treaty Establishing the European Economic Community, Mar. 25, 1957, 11. 57E/AFI/CNF [hereinafter TEEC].
11. Id. 12. Id.; Treaty on European Union, July 29, 1992, 1992 O.J. (C 191) 4 [hereinafter Maastricht Treaty]. 13. Maastricht Treaty, supra note 12. 14. Id. 15. Treaty of Lisbon Amending the Treaty on European Union and the Treaty Establishing the
European Community, Dec. 13, 2007, 2007 O.J. (C 306) 1 [hereinafter Treaty of Lisbon]. 16. See generally id. (explaining how the creation of the Treaty of Lisbon essentially worked to
combine the numerous powers into a single document). 17. The EU in Brief, EUROPA (Oct. 21, 2016), https://europa.eu/european-union/about-eu/eu-in-
brief_en. 18. The founding principles of the Union, EUROPA (Oct. 21, 2016), http://europa.eu/scadplus/
constitution/objectives_en.htm.

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goods among Member-States, were essential in the creation of the European Union, and are critical for its stability, function, and future.19
These objectives have largely been accomplished through the creation of quasi-political bodies.20 Such quasi-political bodies include the European Institutions, separately known as the European Parliament, led by elected Members of European Parliament; the Council of the European Union, led by the rotating European President; and the European Commission, led by life-long bureaucrats.21
The European Parliament is comprised of 751 members elected every five years, based on political affiliation, from Member-States based proportionately on population and by political affiliation.22 The main purposes of European Parliament are to implement legislation impacting all Member-States, formulate international agreements, supervise all European Union institutions, and to establish a proper and feasible budget for the European Union and its institutions.23
The Council of the European Union is comprised of multiple government ministers from all Member-States.24 These ministers periodically meet in Summits to discuss laws and policies related to the following matters: Agriculture and fisheries; Competitiveness; Economic and financial affairs; Education, youth, culture, and sport; Employment; Social policy; Health and consumer affairs; Environment; Foreign affairs; General affairs; Justice and home affairs; and Transportation, telecommunications and energy.25 Each policy area is chaired by the government minister representing the area holding the rotating Presidency of the Council of the European Union.26 Additionally, the Council of the European Union works closely with European Parliament to adopt binding European Union laws and implement an annual budget through a qualified majority, while also coordinating policies among Member-States.27

19. Michael Wilkinson, What is the EU, why was it created and when was it formed?, THE TELEGRAPH (June 22, 2016), http://www.telegraph.co.uk/news/2016/06/20/what-is-the-eu-why-was-it-createdand-when-was-it-formed1/.
20. Id. (explaining how the institutions of the European Union are largely tasked with creating and implementing new policy, deemed to be most beneficial for the citizens of the bloc).
21. See What does the European Union do? B.B.C. NEWS (Jan. 23, 2013), http://www.bbc.co.uk/newsround/21168839.
22. European Parliament, EUROPA (Oct. 21, 2016), https://europa.eu/european-union/abouteu/institutions-bodies/european-parliament_en.
23. Id. 24. Council of the European Union, EUROPA (Oct. 21, 2016), https://europa.eu/european-union/about-
eu/institutions-bodies/council-eu_en. 25. See Council Configurations, EUROPEAN UNION (Aug. 31, 2016), http://www.consilium.europa.eu/
en/council-eu/configurations/. 26. Id.; see also The Presidency of the Council of the EU, EUROPEAN UNION (Oct. 21, 2016),
http://www.consilium.europa.eu/en/council-eu/presidency-council-eu/ (further explaining how the presidency of the Council of the European Union rotates among all Member-states every six months). 27. Council Configurations, supra note 25. (For purposes of the Council of the European Union, a qualified majority requires 55% of the countries (16) representing 65% of the European Union

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The final institution of the European Union is the European Commission, which is the purely apolitical institution tasked with proposing and presenting new legislation to the other institutions.28 The European Commission is also responsible for enforcing the laws of the European Union and representing the European Union in all international agreements and organizations.29 The European Commission is comprised of one Commissioner representing each Member-State and led by an elected Commission President.30 However, the day-to-day operations of the Commission are performed by lifelong bureaucrats organized into separate Directorates-General, which are the departments responsible for implementing a particular policy area.31 Through each of these institutions, the European Union is able to function on a day-to-day basis, significantly impacting the lives of all people residing in the Member-States of the European Union. These institutions have also played a significant role in creating the governing documents of the European Union and have worked together in providing the framework for leaving the transnational organization.

C. How to Leave the European Union

A major issue any Member-State would encounter if choosing to disassociate from the European Union is the lack of guidance existing within the treaties, governing documents, and other provisions related to leaving the economic and political union. The procedure for a Member-State to leave the European Union is discussed in Article 50 of the Treaty of the European Union, which states the following:

(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

population to pass. This can be blocked by four countries representing 35% of the European Union Population.). 28. Id. 29. European Commission, EUROPA (Oct. 21, 2016), https://europa.eu/european-union/abouteu/institutions-bodies/european-commission_en. 30. Id. 31. Id.; see generally Jean-Claude Juncker, EUROPEAN UNION (Oct. 21, 2016), http://ec.europa.eu/commission/2014-2019/president_en (Jean-Claude Juncker is the current President of the Commission.).

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negotiated in accordance with Article 218(3)32 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)33 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 49.34

Accordingly, Article 50 of the Treaty of the European Union contains the legal mechanism for a country to leave the European Union.35 This Article also contains the provision governing the negotiation of the departure process and lays groundwork for working towards enacting future deals with the European Union.36 Any Member-State wishing to leave the European Union must formally notify the Council of the European Union of its intent to leave.37 This triggers a two-year process of negotiating a leaving agreement between the country leaving the European Union and the European Union member-states.38 After the leaving agreement is reached with the Council of the European Union, the Member-State must then obtain consent from the European Parliament, with a qualified majority being

32. Consolidated Version of the Treaty on the Functioning of the European Union art. 218(3), May 9, 2008, 2008 O.J. (C 115) 47 [hereinafter TFEU] (“The Commission, or the High Representative of the Union for Foreign Affairs and Security Policy where the agreement envisaged relates exclusively or principally to the common foreign and security policy, shall submit recommendations to the Council, which shall adopt a decision authorizing the opening of negotiations and, depending on the subject of the agreement envisaged, nominating the Union negotiator or the head of the Union's negotiating team.”).
33. Id. art. 238(3)(b) (“By way of derogation from point (a), where the Council does not act on a proposal from the Commission or from the High Representative of the Union for Foreign Affairs and Security Policy, the qualified majority shall be defined as at least 72 % of the members of the Council representing the participating Member States, comprising at least 65 % of the population of these States.”).
34. Consolidated Version of the Treaty on European Union art. 50, June 10, 2012, 2012 O.J. (C 326) 13 [hereinafter TEU].
35. Id. 36. See generally Gavin Barrett, The Era of Article 50: How the UK Will Leave the EU if it Opts for
Brexit in its 23 June, 2016 Vote, U. C. DUBLIN (May 25, 2016), http://ssrn.com/abstract=2784214. 37. Id. 38. See TEU, supra note 34, art. 50(2).

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required to approve the agreement between the parties.39 In the event a final agreement cannot be reached between the State invoking Article 50 and the Council of the European Union within two years, or if the European Parliament or Council of the European Union choose not to ratify the agreement, all treaties between the State and the European Union will cease to exist and the two parties will no longer have a diplomatic relationship.40 However, because this process has never been enacted, there is no precedent to understand the negotiations or ramifications.41 To better understand the organization of the European Union, it is helpful to evaluate the treaties establishing the bloc.

D. Interconnectedness of Treaties

There are multiple treaties that laid the groundwork for establishing the European Union, implementing its values and objectives, and allowing for the transnational organization to function. The common market and institutions, now enjoyed by European Union Member-States, began in 1951 with the Treaty of Paris, formally known as the Treaty Establishing the European Coal and Steel Community.42 The Treaty of Paris was effective for fifty years, during which time it created the European Coal and Steel Community.43 This treaty has since expired and is not binding on European Union Members-States, per provisions of the agreement.44
The Treaty of Rome, formally known as the Treaty Establishing the European Economic Community, furthered the ideals found in the Treaty of Paris; still in force today, it established the European Atomic Energy Community and has been integrated into subsequent treaties impacting the European Union.45 The Brussels Treaty, more commonly known as the Merger Treaty, became effective on July 1, 1967, and combined the executive powers of the European Steel and Coal Community, European Economic Community, and the European Atomic Energy Commission into the Commission of the European Economic Community and the Council of the European Economic Community.46 Further, this treaty combined all European Communities, but was repealed by the Treaty of Amsterdam in

39. Id. 40. Id. art. 50(3). 41. Id. 42. Treaty establishing the European Coal and Steel Community art. 1, Apr. 18, 1951, 1 [hereinafter
Treaty of Paris]. 43. Id. 44. Id. art. 97. 45. TEEC, supra note 10; see also EU Treaties, EUROPA (Oct. 21, 2016), https://europa.eu/european-
union/eu-law/decision-making/treaties_en. 46. The History of the European Union–1967, EUROPA (Oct. 21, 2016), https://europa.eu/european-
union/about-eu/history/1960-1969/1967_en.

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1999.47 The Treaty of Amsterdam facilitated Member-States devolving domestic powers to the European Parliament in a variety of policy areas.48
The Single European Act amended the Treaty of Rome in 1987 and aimed to streamline the decision-making process critical for implementation of a single and common market, while replacing previous voting mechanisms with the idea of a qualified majority vote.49 The Maastricht Treaty paved the way for the European Monetary Union, introduced common domestic and foreign policies, and revamped the European Parliament.50 The Treaty of Amsterdam updated the Brussels Treaty with few changes and reformed the institutions of the European Union to be better effective in the future when more Member-States joined.51
Similar to the Treaty of Amsterdam, the Treaty of Nice was implemented to correct potential current and future issues foreshadowed by the current Member-States; this was accomplished by modifying the European Commission, changing voting procedures and requirements for the Council of the European Union, and creating the opportunity for new and increased membership in the European Union.52 The final relevant treaty for the European Union is the Treaty of Lisbon, implemented in 2007, which clarified the rights and responsibilities of the European Union and its Member-States and worked toward uniting the European Union under a more unified political voice.53 The Treaty of Lisbon combined the operating procedures and guidelines of the European Union54 into two vitally important documents: the Treaty of the European Union and the Treaty on the Functioning of the European Union.55

E. Previous Plans for Leaving the European Union

Though a Member-State of the European Union has not previously attempted to disassociate membership, the individual States and the European Union provide loose guidance on the issue. For example, Norway

47. See generally id.; see also EU treaties, supra note 45. 48. Treaty of Amsterdam Amending the Treaty on the European Union, the Treaties Establishing the
European Communities and Certain Related Acts, Oct. 2, 1997, 1997 O.J. (C 340) 1 [hereinafter Treaty of Amsterdam]. (These powers Member-States allowed the European Union jurisdiction in included immigration, common laws, and a common security policy.). 49. Id.; see also The EEC and the Single European Act, U.K. PARLIAMENT (Apr. 2013), http://www.parliament.uk/about/living-heritage/evolutionofparliament/legislativescrutiny/ parliament-and-europe/overview/britain-and-eec-to-single-european-act/ (explaining how the implementation of the qualified majority vote prevents individual States from asserting veto power in decision-making). 50. Maastricht Treaty, supra note 12. 51. Treaty of Amsterdam, supra note 48. 52. Id. 53. Treaty of Lisbon, supra note 15. 54. See the discussion supra Section II(a) for a more thorough analysis. 55. Treaty of Lisbon, supra note 15.

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has continually expressed its desire not to join the European Union through referendums in 1972 and 1994, but chose to be associated through membership in the EEA instead.56 With this arrangement, Norway is given full access to the internal market of the European Union but is required to implement all European Union laws thereby associated.57
In addition to implementing European Union laws, Norway is also required to contribute to the yearly budget of the European Union in an amount comparable to Member-State contributions.58 However, Norway is not involved in creating European Union laws and regulations because it is granted only the ability to participate, not vote, in programs created by the European Union.59 This plan, commonly referred to as the Norway Plan, has allowed Norway to be free from some directives and rules of the European Union.60 Nonetheless, with the demands imposed by the EEC, Norway still loses some of its autonomy to the European Union.61 Two other States, Iceland and Liechtenstein, have arrangements similar to Norway’s based on their membership in the EEC, and are similarly allowed to participate in the internal market.62
Additionally, a relationship similar to that between Switzerland and the European Union makes it possible for a Member-State to leave despite the difficulty created by this type of arrangement.63 After rejecting membership to the EEA in 1992, Switzerland has agreed to over 120 bilateral agreements with various States, which allows for the State to participate in the common market, while contributing less than Norway to the European Union’s budget.64
Under a plan like Switzerland’s, a former Member-State would still be required to abide by certain areas of European Union laws and contribute to the European Union’s budget, but would not have the ability to participate in decision-making.65 Furthermore, Switzerland’s agreements do not allow the free movement of services, including financial services, which is vital to the economies of many European Union Member-States.66

56. Damien Gayle, The Norway Option: What Is It and What Does It Mean for Britain?, THE GUARDIAN (Oct. 28, 2015), https://www.theguardian.com/politics/2015/oct/28/the-norway-optionwhat-is-it-and-what-does-it-mean-for-britain?CMP=share_btn_link.
57. Id. (explaining that Norway is required to implement all legislation related to the internal market, leading to approximately 75% of all European Union legislation being enacted in Norway).
58. Id. 59. Id. (listing some of the organizations Norway has participation rights in: the European Defence
Agency, Frontex, Europol, and the European Monitoring Centre for Drugs and Drug Addiction). 60. Id. 61. See generally id. (explaining that the European Union and the European Economic Community are
separate organizations, established under different treaties.). 62. Id. 63. See generally id. 64. Id. 65. Id. 66. Id.

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F. The United Kingdom

The United Kingdom secured membership in the EEC, the European Coal and Steel Community, and the European Atomic Energy Community in 1973, after the United Kingdom Parliament passed the European Communities Act in 1972.67 This Act of Parliament approved the formal relationship between the two parties, gave direct legal effect to the laws of the European Community, and allowed for the European Court of Justice to have direct jurisdiction in interpreting the applicability of European Union laws.68 Further, this Act has played an important role in the United Kingdom, as it gave a certain amount of parliamentary sovereignty to the European Community.69
The new relationship between the European Community and the United Kingdom began with difficulties, as the United Kingdom chose to hold a referendum on membership in the EEC in 1975, with 67% of votes choosing to remain in the community.70 More issues became apparent with the passage of the Single European Act of 1986.71 Many protested Prime Minister Margaret Thatcher’s proposal of implementing a unified currency for the single internal market and opposed increased integration of the Community and of Member-States.72 The United Kingdom’s dissatisfaction with the idea of a European community has continued and has been demonstrated by the multiple opt-outs that have been secured since the Maastricht Treaty of 1992, which formally created the European Union.73
The United Kingdom negotiated special exceptions into European Union law, specifying explicit areas where European Union laws are not binding in the United Kingdom.74 In relation to the economic and monetary union associated with the European Union, the United Kingdom maintains control over domestic banks and relevant economic and monetary policies.75 This control is maintained because there is no requirement for a MemberState to join the monetary union or use the euro and the State cannot be punished related to the Economic and Monetary Union.76

67. Clive Coleman, Reality Check: Did the UK Lose Its Sovereignty in 1972?, B.B.C. NEWS (Mar. 10, 2016), http://www.bbc.com/news/business-35766434.
68. Id. 69. Id. (stating an important principle of the United Kingdom’s constitution: “Parliament [is] the
supreme legal authority in the UK, which can create or end any law.”). 70. Daniel Kenealy, How Did We Get Here? A Brief History of Britain’s Membership of the EU,
EUROPEAN FUTURES (May 24, 2016), http://www.europeanfutures.ed.ac.uk/article-3278. 71. Id. 72. Id. 73. Id. 74. Rights and Obligations of European Union Membership, p. 14, (Apr. 2016),
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/516501/Rights_and _obligations_of_European_Union_membership_web_version.pdf. 75. Id. 76. Id.
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