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ECJ Rules UK Can Unilaterally Ditch Brexit Plans

by Ulrika Lomas, Tax-News.com, Brussels

14 December 2018


The European Court of Justice has ruled that the UK can unilaterally abandon the process of leaving the European Union, providing parliament approves the move.

In its December 10 judgment, the ECJ ruled that, when a member state has notified the European Council of its intention to withdraw from the European Union, as the UK has done, that member state is free to revoke that notification unilaterally – i.e. without the approval of the European Union.

The Court said: "That possibility exists for as long as a withdrawal agreement concluded between the EU and that Member State has not entered into force or, if no such agreement has been concluded, for as long as the two-year period from the date of the notification of the intention to withdraw from the EU, and any possible extension, has not expired."

The ruling means that, if parliament approves such, the UK Government could end the process by which it will no longer be an EU member state from March 29, 2019, or at a later date if a transition period is agreed.

On December 19, 2017, a petition for judicial review was lodged in the Court of Session, Inner House, First Division (Scotland, United Kingdom) by members of the UK Parliament, the Scottish Parliament and the European Parliament to determine whether the notification referred to in Article 50 can be revoked unilaterally before the expiry of the two-year period, with the effect that such revocation would result in the United Kingdom remaining in the EU.

On October 3, 2018, the Court of Session referred this question to the Court of Justice for a preliminary ruling, pointing out that the response would allow members of the House of Commons to know, when exercising their vote on a withdrawal agreement, whether there are not two options, but three, namely withdrawal from the European Union without an agreement, withdrawal from the European Union with an agreement, or revocation of the notification of the intention to withdraw and the United Kingdom's remaining in the European Union.

The Court ruled that Article 50 of the Treaty of the European Union (TEU) does not explicitly address the subject of revocation. It neither expressly prohibits nor expressly authorizes revocation. That being so, the Court noted that Article 50 TEU pursues two objectives, namely, first, that of enshrining the sovereign right of a member state to withdraw from the European Union and, second, that of establishing a procedure to enable such a withdrawal to take place in an orderly fashion. According to the Court: "The sovereign nature of the right of withdrawal supports the conclusion that the member state concerned has a right to revoke the notification of its intention to withdraw from the EU for as long as a withdrawal agreement has not entered into force or, if no such agreement has been concluded, for as long as the two-year period, and any possible extension, has not expired."

The Court added: "In the absence of an express provision governing revocation of the notification of the intention to withdraw, that revocation is subject to the rules laid down in Article 50(1) TEU for the withdrawal itself, with the result that it may be decided unilaterally, in accordance with the constitutional requirements of the Member State concerned."

"The revocation by a Member State of the notification of its intention to withdraw reflects a sovereign decision to retain its status as a Member State of the European Union, a status which is neither suspended nor altered by that notification."

Also on December 10, UK Prime Minister Theresa May announced a delay to a vote on whether to adopt the agreement negotiated with the EU on an orderly withdrawal from the EU. If UK lawmakers approve the deal, the UK would be offered a transitional period during which the UK would continue to be treated as though it were an EU state, until at least 2020, to allow time for the two parties to negotiate the future relationship between the UK and the bloc and a solution to the border issue in Ireland. May said that the current proposal would have been voted down by a significant margin had it been put to a vote as scheduled on December 11, 2018. She is planning to engage with lawmakers concerning the agreement's provisions on the "backstop," which would in particular involve Northern Ireland being included in the EU customs area for as long as there is no workable solution to avoid a hard border between Northern Ireland and the Republic of Ireland to its south.

TAGS: expatriates | tax | value added tax (VAT) | Ireland | law | United Kingdom | European Union (EU) | Expats | Europe | Scotland

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