Concept and Legal Background of Brexit
The term Brexit describes the withdrawal of the United Kingdom of Great Britain and Northern Ireland (UK) from the European Union (EU). The term is a portmanteau of “Britain” and “Exit.” Brexit is a significant legal, political, and economic event that has influenced both the British and EU legal systems in essential areas. The legal complexity surrounding Brexit stems from the interplay between international law mechanisms, EU law requirements, and national implementation.
Legal Basis: Art. 50 EU Treaty and the Withdrawal Procedure
Article 50 of the Treaty on European Union (TEU)
The legal framework for a member state’s withdrawal from the European Union was first incorporated into the Treaty on European Union with the Treaty of Lisbon (2009). Article 50 TEU regulates the withdrawal of a member state and stipulates a specific procedure:
- Notification obligation: A member state wishing to withdraw notifies the European Council of its intention.
- Negotiation framework: The Union then negotiates an agreement setting out the withdrawal arrangements and future relations.
- Two-year deadline: The withdrawing country leaves the EU two years after notifying its intention, unless this period is extended by mutual agreement.
- Contractual consequences: After withdrawal, the EU Treaties no longer apply to the exiting country.
Brexit was the first practical application of this article and served as a precedent for future withdrawals.
International Law Dimensions
The withdrawal of a state from an international treaty is generally governed by the Vienna Convention on the Law of Treaties (VCLT). However, since the TEU contains a specific withdrawal clause, it takes precedence over the general provisions of international law.
The Withdrawal Agreement and Its Legal Implications
Structure and Content of the Withdrawal Agreement
The withdrawal agreement ratified on January 24, 2020, between the United Kingdom and the European Union governed key aspects of the withdrawal:
- Citizens’ rights: Legal status of EU citizens in the United Kingdom and vice versa.
- Financial settlement: United Kingdom’s obligations regarding outstanding payments to the EU budget (“Brexit Bill”).
- Transition period: Until December 31, 2020, EU law largely continued to apply in the United Kingdom, despite formal withdrawal, to enable an orderly transition.
- Northern Ireland Protocol: Special arrangements regarding the border question between Northern Ireland (UK) and Ireland (EU), to protect the Good Friday Agreement and avoid a ‘hard’ border
Legal binding force and obligations
The Withdrawal Agreement is an international treaty. It is binding and, on the EU side, is subject to the continuing jurisdiction of the European Court of Justice (ECJ) with regard to its application on citizens’ rights and financial obligations.
The Follow-up Agreements: Trade and Cooperation Agreement
Trade and Cooperation Agreement (TCA)
On January 1, 2021, the “Trade and Cooperation Agreement between the European Union and the United Kingdom” (TCA) entered into force. This agreement governs future relations, in particular regarding:
- Trade in goods and services: Customs duties, rules of origin, technical standards, accreditations.
- Fisheries: Transitional access to fishing grounds.
- Cooperation in justice, security, and policing
- Level playing field clauses: Ensuring equal competition conditions.
The application of EU law was thereby significantly restricted; the United Kingdom is now a third country under the EU Treaties.
Impacts on EU Law
Adjustment of EU Secondary Law
The relevant adjustments primarily affected freedom of movement, the single market, and member state competences. Upon leaving, the United Kingdom lost all EU membership rights and obligations, such as voting rights in the Council of Ministers, representation in the European Parliament, and access to EU agencies.
Special cases and transitional arrangements
- Safeguarding existing rights: Citizens’ rights, pension entitlements, and accrued social security periods are explicitly protected.
- Border arrangements: The so-called “Northern Ireland Protocol” provides for continued uniform regulation of goods controls on the island of Ireland.
National Implementation: The EU (Withdrawal) Act
Legal situation in the United Kingdom
The “European Union (Withdrawal) Act 2018” provided the legal basis for Brexit in the United Kingdom. It transferred existing EU law into national law (“Retained EU Law”), enabled adjustments, and regulated the relationship between UK law and still applicable EU rules during the transition period.
Implications for Private International Law and Economic Law
Recognition and Enforcement
As a result of its withdrawal, the United Kingdom lost automatic recognition and enforcement of decisions based on several EU regulations (e.g., Brussels Ia, Rome I and II). This made it necessary to provide for specific regulation via bilateral or multilateral agreements.
Customs and VAT law
At the end of the transition period, the United Kingdom became a third country in customs and VAT matters. This has far-reaching implications for trade in goods, rules of origin, tax rates, as well as documentation and declaration of goods.
Conclusion
The term Brexit refers not only to the process of the UK’s withdrawal from the EU but also stands for a comprehensive legal reorganization of numerous issues. The legal implications affect contract law, international law, European law, national law, and various fields such as residence law, tax law, and economic cooperation. The example of the UK and the Brexit mechanism under Art. 50 TEU provides a long-term framework for possible withdrawal procedures of other states from the European Union.
Frequently Asked Questions
What legal provisions apply to existing contracts between companies from the United Kingdom and the EU after Brexit?
Existing contracts between companies from the United Kingdom (UK) and the European Union (EU) remain generally valid after Brexit, as civil law contractual relationships are not automatically terminated by a state’s exit from the EU. However, significant adjustments may be required in terms of contract interpretation and termination, particularly with regard to jurisdiction clauses, the application of the UN Convention on Contracts for the International Sale of Goods (CISG), and the enforceability of judgments. The law chosen in the contract (choice of law clause) continues to apply unless it is explicitly limited to EU Member States. New risks arise due to potential customs controls, trade barriers, delivery delays, as well as uncertainties regarding data protection requirements and product standards, since the UK is no longer part of the harmonized single market. Companies should analyze and, if necessary, adapt existing contracts in terms of force majeure clauses, customs clauses, adjustment obligations, and termination rights.
How does Brexit affect data protection and the transfer of personal data between the EU and the United Kingdom?
Since January 1, 2021, the United Kingdom is considered a ‘third country’ under the General Data Protection Regulation (GDPR). The transfer of personal data from the EU to the UK has been legally secured since June 28, 2021, by an adequacy decision of the European Commission. As a result, the level of data protection in the UK is recognized as equivalent to that in the EU. If this decision is absent in the future, companies must implement additional data protection measures such as standard contractual clauses or binding corporate rules. Moreover, UK companies are no longer directly bound by the GDPR and must adapt their processing activities to UK data protection law, although this has so far remained closely aligned with the GDPR.
What are the consequences of Brexit for the mutual recognition and enforcement of court judgments between the United Kingdom and EU Member States?
As a result of the United Kingdom’s withdrawal, the automatic mutual recognition and enforcement of judgments under the Brussels Ia Regulation and the European Enforcement Order no longer applies. The UK has acceded to the 2005 Hague Convention on Choice of Court Agreements, so judgments based on exclusive choice of court agreements can still be recognized and enforced. However, if there is no such agreement, recognition and enforcement are governed by the national law of the respective third country, which can lead to delays and uncertainties. European companies should therefore explicitly regulate the competent courts and enforcement provisions in new contracts.
What legal consequences result for free movement of workers and residence rights between the United Kingdom and the EU?
Brexit ended the mutual free movement of workers between the UK and the EU. For British nationals who were already resident in an EU country before December 31, 2020, and vice versa, transitional arrangements under the Withdrawal Agreement apply: they retain their rights to residence, employment, and social benefits, provided they have registered and submitted the relevant applications in time. For new immigrants, the national residence law of the respective state applies. The UK has also introduced a points-based immigration system, making access to the UK labor market significantly more difficult for EU citizens. Recognition of foreign professional qualifications is now subject to separate regulations.
What legal conditions apply to trade in goods and customs formalities between the EU and the United Kingdom since Brexit?
Since January 1, 2021, the United Kingdom is a third country for customs purposes. Despite the partnership agreement that largely provides tariff-free trade for goods of origin, customs declarations must be submitted and proof of origin provided for every shipment. Companies are obliged to have export and import documents, as well as any necessary customs authorizations. Import VAT and further regulatory checks (for example, for plants, animals, or certain technical products) are now subject to national law. If rules of origin are not met, standard tariffs apply. Product liability and CE marking are also now subject to additional country-specific requirements after Brexit.
How has the legal protection of intellectual property (trademarks, patents, designs) changed in connection with Brexit?
With Brexit, the simultaneous validity of EU trademarks, Community designs, and certain EU patent rights in the United Kingdom came to an end. At the conclusion of the transition period, the UK created equivalent national rights for all EU trademarks and Community designs registered in the UK at that time, automatically entered them into the British register. A comparable solution was found for international registrations. New EU-granted rights after January 1, 2021, have no effect in the United Kingdom; a separate UK right must be applied for. Patents under the European Patent Convention are not affected as this is not part of EU law.
What changes have there been with regard to the recognition of professional qualifications for EU citizens in the United Kingdom and for Britons in the EU?
Since Brexit, the automatic recognition of professional qualifications, as provided for by EU Directive 2005/36/EC, no longer applies. Both sides now only make provisions for mutual recognition within the framework of bilateral or national regulations. This means that EU citizens seeking recognition of their professional qualifications in the United Kingdom, and vice versa, must undergo a separate recognition process determined by the competent authority of the respective country. For certain sectors, simplifications may be created by specific agreements, but this is no longer the general rule, so potentially longer recognition procedures and increased evidence requirements are to be expected.
