12 april 2017
Brexit, what it means for our clients
Houthoff Buruma is closely monitoring the consequences of the Brexit for its clients. Areas that are expected to be affected include trade, competition, intellectual property, data protection, dispute resolution and financial services. An intensive period of negotiations is expected to determine the UK's future relationship with the EU and its Member States. Would you like to speak to a Houthoff representative in regard to Brexit related EU issues, our team of "Brexperts" can be reached via brexperts@houthoff.com for all your questions.
European Parliament approves principles for withdrawal agreement
On 5 April 2017 the European Parliament adopted a resolution officially laying down the European Parliament’s key principles and conditions for its approval of the withdrawal agreement to be concluded between the European Union and the United Kingdom. Any such agreement at the end of the negotiations will need to be approved by the European Parliament. Securing equal and fair treatment for EU citizens living in the UK and British citizens living in the EU is one of those key principles. The resolution warns against any trade-off between security and the future EU-UK economic relationship, opposes any sort of cherry picking or a piecemeal economic relationship based on sector-specific deals, and reiterates the indivisibility of the four freedoms of the single market - free movement of goods, capital, services, and people. Finally, the resolution says that only when “substantial progress” has been made in talks on how the UK is to leave the EU discussions can begin on possible transitional arrangements. These arrangements must not last longer than three years, while an agreement on a future relationship can only be concluded once the UK has left the EU.
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European Council guidelines for negotiations
For the next meeting of the European Council on 29 April 2017 the draft version of the guidelines for the coming negotiations has become public. These guidelines define the framework for negotiations under Article 50 TEU and set out the overall positions and principles that the Union will pursue throughout the negotiations. Core principle is that the EU wants the UK to be a close partner but without any "cherry-picking". A non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member. There will be no separate negotiations between individual Member States and the UK on matters pertaining to the withdrawal of the UK. Transitional arrangements are allowed, as long as they are in the interest of the Union and providing bridges towards the foreseeable framework for the future relationship.
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Legal and Procedural Issues of the UK withdrawal
On 27 March 2017, two days before the UK gave its official notification of withdrawal, the think tank of the European Parliament published a report on the legal and procedural issues of the UK withdrawal from the European Union. Although the process of withdrawing from the EU is outlined by Article 50 of the Treaty on European Union, a number of issues remain unclear in practice, all the more so since there is no precedent of a Member State withdrawing from the Union. This in-depth analysis considers the legal and procedural issues surrounding the UK withdrawal, focusing in particular on the formal exit process under Article 50 TEU and the EU institutions' preparations for negotiations. It also sets out some possible templates for future EU-UK relations, as well as the details of existing frameworks for cooperation between the EU and third countries.
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Competition law: Changes for merger control
After the official notification for withdrawal given by the UK Government on 29 March 2017 a period of transition has started. This current transitional period gives rise to many questions in the field of competition law. For example, what will happen with pre-Brexit infringements or merger notifications that continue until post-Brexit? What will be the effect of decisions taken by authorities in this transitional period and how can they be enforced post-Brexit? In the field of competition law, Brexit will have the deepest impact on merger control. The current "one-stop-shop" regime for merger control will come to end for the UK. This regime will turn into a "two-stop-shop" system if there are parallel proceedings with both the European Commission and the Competition and Markets Authority ("CMA"). Consequence might be conflicting decisions by the two authorities and the risk of two fines or penalties. Future close cooperation between the Commission and the CMA will therefore be essential. After Brexit the EU competition laws will no longer apply in the UK and the CMA is no longer bound by decisions of the Commission and the Court of Justice of the European Union. It could very well be that in due course British competition law will evolve in a different direction than its EU counterpart. However, it seems unlikely that UK competition law will fundamentally change in the short term.
The Houthoff EU team is available at eu-office@houthoff.com or +32 (0)2 507 98 00.
