Francisco A. Laguna & Amy Turner
This week, we continue our series on Brexit looking at the withdrawal provisions of the Treaty on European Union. Article 50 controls the process for the exit of countries from the EU. Withdrawal under Article 50 is an untested procedure, and the UK’s decision has caused a debate throughout Europe as to how it should be invoked.
Article 50 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.
Notice of withdrawal under Article 50 is a formal, proactive act the British government should undertake. The Brexit vote on June 23, 2016 does not constitute Article 50 notice. On June 26, 2016, three days after the UK vote, the EU issued a statement regretting but respecting Britain’s decision and asking it to proceed quickly in accordance with Article 50, stating “We stand ready to launch negotiations swiftly with the United Kingdom regarding the terms and conditions of its withdrawal from the European Union.” On 28 June 2016, the EU Parliament passed a motion calling for the “immediate” triggering of Article 50. In contrast, in the UK, the growing consensus is that Article 50 notice should be given at, or near the end of, the end of the maximum two-year. Despite the pressure, however, the reality is that there is no mechanism to compel a state to withdraw from the European Union.
Newly appointed PM Theresa May has stated that negotiations with the EU required a “UK-wide approach”. “I have already said that I won’t be triggering article 50 until I think that we have a UK approach and objectives for negotiations – I think it is important that we establish that before we trigger article 50.” She has also stated “All of us will need time to prepare for these negotiations and the United Kingdom will not invoke article 50 until our objectives are clear.”
Although there are many questions that will need to be addressed, timing is the most important. Presently the European Commission is operating under the assumption that Article 50 notification may not be made before September 2017, a sign suggesting that the government of the UK may be regretting the vote. Next in the series, we will discuss the possible plans for withdraw.
Contact TransLegal with your questions concerning Brexit and how it may impact your business.