There has been an enormous amount of press coverage of Article 50, in particular how it is to be interpreted and used. Like the Brexit process itself, Article 50 has a number of uncertain elements. Below we set out what is clear and what is not.
We also look at a key political issue: when should the UK serve its notice under Article 50?
- Overview of Article 50
Article 50 came into force via the Lisbon Treaty. It states:
- “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
- 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.
- 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.
- 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.
- If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.”
From the above language we can see that:
- a Member State may decide to withdraw for whatever reasons it sees fit. It is not required, in contrast to other systems (e.g. Article 64 of the Vienna Convention) to show any adverse change in circumstances;
- the power to invoke and operate the procedure appears lie with the Member State seeking to withdraw, and generally with the Member States collectively acting through the European Council or Council of Ministers. The agreement requires the approval of the European Parliament It is possible to argue that while the Commission might be consulted, the Article 50 process does not require any other input from the Commission, since the Council is not required to use the Commission for negotiations under Article 218(3);
- in principle, once the process begins, it has to conclude within 2 years unless that period is extended by all Member States;
- the withdrawing Member State is not party to the discussions in the European Council or Council of Ministers about that Member States withdrawal, and so cannot see into the negotiating position of the remaining Member States;
- the discussions about withdrawal shall take “ account of the framework for its future relationship with the Union ” Therefore, two separate negotiations are envisaged: for ease of reference, we will refer to these as the “withdrawal” and the “what next” discussions; and
- there does not appear to be any process for withdrawing any notice served under Article 50, although a member State that has withdrawn can apply to rejoin. Rejoining is a deeply unattractive option for the UK, since the UK would lose a number of its current opt outs from EU measures, and would, in principle, be required to join the € and the Schengen Agreement.
- What domestic process needs to be followed to serve the Article 50 Notice (and to accept any agreements)?
Article 50 makes it clear only that the withdrawal has to be in accordance with that member States own constitutional procedure. There has been a great deal of ink spilt on this issue in the UK. While it seemed as if Mr Cameron envisaged the notice to be able to be served by the Government (acting in its executive capacity), the better view is that Parliament needs to be consulted, and a vote taken. There are open questions as to whether both Houses need to be consulted and as to whether any special procedures or level of votes (i.e., not simple majority) are required. Consulting both Houses would avoid any challenge to the procedure. A UK law firm has begun a legal action to ensure that Parliament is consulted, but we think it likely that when consulted, and in the absence of any material change in circumstances (e.g. a General Election), MPs will vote to proceed with Article 50 discussions even though many of them voted on the Remain side.
- What happens to the EU once an Article 50 Notice is served?
In principle, nothing. While the EU-27 can exclude the withdrawing Member State from discussions about its withdrawal, when considering any other matters, the EU and its institutions should proceed normally. It is therefore interesting that the Commission, and certain Member States have said that no informal discussions about the UK withdrawal will take place until the Article 50 notice has been served. If this is correct, it is difficult for the EU-27 to meet prior to that notice, and to use the European Council, minus the UK, as the vehicle for those meetings.
- Can the UK negotiate the withdrawal agreement at the same time as the “what next” agreement?
In our view yes it can. We have written a more detailed blog post on this issue here, but just to reiterate that Article 50 states withdrawal shall take “ account of the framework for its future relationship with the Union ” and so is hard to see how this can be done if the two negotiations are required to be sequential, and not concurrent. It is also the case that requiring sequential discussions would almost certainly result in application of MFN treatment on trade between the UK and EU-27 which is in neither party’s interests. While we understand that the Commission is seeking to put pressure on the UK as part of the withdrawal discussions, it does not seem helpful to insist on sequential discussions that will lead to problems for both parties. It is of course the case that if the “what next” discussions are undertaken at the same time as the withdrawal discussions, this may require additional negotiating resources on the part of the UK, and the EU-27. This may be a practical limitation on what is possible.
- Can a notice under Article 50 be revoked?
The wording of Article 50 does not anticipate revocation, but if all parties to the Article 50 process agreed that it could be withdrawn, then, subject to any challenge, it appears possible to agree such a withdrawal.
- Can the EU force us to serve an Article 50 Notice?
In our view, Article 50 does not permit the EU-27, as a legal matter, to insist on the submission of an Article 50 notice. The EU system does contain a provision for the suspension of a Member State for certain types of conduct, but a withdrawal based on a democratic decision of a Member States electorate is not one of them. Of course the EU-27 could find other ways to put pressure on the UK. However it must not be forgotten that until the UK in fact withdraws from the EU, its status generally and role in all procedures is unaffected and so the EU-27 could not, as some have suggested, start passing legislative measures designed to upset or otherwise put pressure on the UK.
- In what circumstances (when) should the UK serve its Notice?
This is potentially the most important issue. The timing of the Article 50 notice is one of the few negotiating tools the UK has. Once the notice is served, unless those negotiations proceed to the satisfaction of all participants, the UK will withdraw from the EU within a period of 2 years, and may not have a full withdrawal agreement and no “what next” agreement with the EU-27. This is as close to expulsion as the EU treaty system comes. Therefore, in order to be certain that the UK does not withdraw at the end of the 2 years without these agreements, the UK needs to be as prepared as it can be before serving the Article 50 notice which starts the clock.
Is the UK currently in this position? No it is not. As of the time of writing, there are three majors issues facing the UK in its negotiations with the EU-27.
First, the UK does not have clear understanding of what it and its businesses want as part of those negotiations. At the moment, the UK Government is considering what type of arrangement might be possible, and how any such arrangement would preserve a high degree of access to the EU (but obviously not full access to the single market) while limiting certain free movement of at least persons. Until this process has completed, it does not seem helpful to start a negotiation.
Second, even if the UK Government has a clear plan as to what it wants to negotiate, and how it wishes to do that (including any “red lines”), the UK does not have a significant number of skilled and experienced trade negotiators, and will need to hire or second such negotiators from other Governments or from industry.
Finally, both France and Germany have presidential elections in 2017 (June and no later than October respectively). While the presidential campaigns are underway, both President Hollande and Chancellor Merkel will not be able to give negotiations with the UK their full attention. After they have been re-elected (or their successors are in place), then they will be able to do so. This does not mean that the UK cannot serve an Article 50 notice until both have been re-elected, since the UK can negotiate technical issues with counterparts in the EU-27 in the meantime. However it is clear that no political decision is likely to be taken until after the French and German elections.
Adding all these issues together implies that the UK should serve its Article 50 notice in Q1 or Q2 of 2017.