EU-Afghanistan “Joint Way Forward on migration issues”: another “surrealist” EU legal text ?

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by Luigi LIMONE (*)

It may be a coincidence but this year we are not only celebrating the 50th anniversary of Rene’ MAGRITTE painter’s death but also witnessing his surrealist approach spreading also in the EU Institutions and Member States legal practice.

We already know already that the core of 90% of legislative interinstitutional negotiations takes place in a confidential “informal” framework (the so called “trilogues” procedure) which run against the Treaties grounded obligation of legislative debates to be held in public.

Thanks to the Court of Justice (Cases T-192/16, T-193/16 and T-257/16) we have also recently discovered that the EU-Turkey “deal” on migration which was trumpeted as an EU achievement by the European Council President was not in fact an EU agreement because “neither the European Council nor any other institution of the EU decided to conclude an agreement with the Turkish Government on the subject of the migration crisis.”  According to the CJEU press release “In the absence of any act of an institution of the EU, the legality of which it could review under Article 263 TFEU, the Court has declared that it lacked jurisdiction to hear and determine the actions brought by the three asylum seekers. For the sake of completeness, with regard to the reference in the ‘EU-Turkey statement’ to the fact that ‘the EU and [the Republic of] Turkey agreed on … additional action points’, the Court has considered that, even supposing that an international agreement could have been informally concluded during the meeting of 18 March 2016, something which has been denied by the European Council,  the Council  of  the European Union  and the  European Commission in the  present  cases, that agreement would have been an agreement concluded by the Heads of State or Government of the Member States of the EU and the Turkish Prime Minister. In an action brought under Article 263 TFEU, however, the Court does not have jurisdiction to rule on the lawfulness of an international agreement concluded by the Member States.”

 

Now a third example of legal surrealist approach is offered to us by the Joint Way Forward (JWF) declaration on migration issues with Afghanistan and the EU. It was signed during the Afghanistan donor conference which took place in Brussels on 4 and 5 October 2016 and brought together representatives from 75 countries and 26 international organizations, with the ultimate aim of finding new funding solutions to end violence and introduce a political process towards lasting peace and reconciliation in Afghanistan.

Unlike for the EU-Turkey “deal” this time the EU Institutions recognize to be responsible of this text.  Intervening before the European Parliament competent committee (LIBE)  Simon Mordue, Deputy Director-General for Migration, DG Migration and Asylum (DG HOME), this declaration aims to facilitate the return process of irregular Afghans and to support their sustainable reintegration in the Afghan society, while fighting the criminal network of smugglers and traffickers at the same time. The objective, as stated in the document, is “to establish a rapid, effective and manageable process for a smooth, dignified and orderly return of Afghan nationals who do not fulfill the conditions in force for entry to, presence in, or residence on the territory of the EU, and to facilitate their reintegration in Afghanistan in a spirit of cooperation”. The document also clarifies that “in their cooperation under this declaration, the EU and Afghanistan remain committed to all their international obligations, in particular: a) respecting the provisions of the 1951 Convention relating to the Status of Refugees and its 1967 New York Protocol; b) upholding the rights and freedoms guaranteed in the International Covenant on Civil and Political rights and the EU Charter on Fundamental Rights and the Universal Declaration on Human Rights; c) respecting the safety, dignity and human rights of irregular migrants subject to a return and readmission procedure”.

The little detail is that even if the wording of the text looks like an international agreement  the Commission has clearly stated also before the EP plenary that the text is not.. binding even if, its wording, objective and content, is the same of a formal readmission agreement like the ones that the European Union has so far concluded with 17 non-EU countries an which have approved by the European Parliament following art. 79 par 3 of the TFEU. (SEE NOTE BELOW)

According to the Commission the Joint Way Forward  should instead be considered a simple “joint statement”,  not legally enforceable wich simply “paves the way for a structural dialogue and cooperation on migration issues, based on a commitment to identify effective ways to address the needs of both sides”.  However, as noted by Tony Bunyan, director of Statewatch, also the readmission agreement with Turkey of 18 March 2016 originated in the form of two letters and of an informal declaration and the European Union. Now the EU has adopted the same approach with Afghanistan.

Is the joint declaration with Afghanistan, in fact, representing  another attempt to conclude a readmission agreement, while bypassing the rules (art.79 p 3 and 218 of the TFEU)   laid down in the EU Treaties for the conclusion of international readmission agreements and notably the approbation by the the European Parliament?

 

The Joint Way Forward (JWF) declaration is in line with the recent political shift in EU foreign policy, which now primarily focuses on curbing migration and making deterrence and expulsion the main objectives of its relationships with third countries. The shift towards the externalization of migration management and control is exemplified by the new Partnership Framework, which was proposed by the European Commission in June 2016 under the European Agenda on Migration. The ultimate aim of the Partnership Framework is “a coherent and tailored engagement where the Union and its Member States act in a coordinated manner putting together instruments, tools and leverage to reach comprehensive partnerships (“compacts”) with third countries to better manage migration in full respect of our humanitarian and human rights obligations”.

In practice, the Partnership Framework has introduced an alternative approach with regards to readmission agreements, which are now concluded in the form of informal agreements by means of “informal” swift procedures.

This is done  , under pressure from some Member States, in particular Germany. It was already the case for the “non-EU” agreement with Turkey on March 2016, and also now Germany has hardly fought for a rapid adoption of an “informal” agreement with Afghanistan. Faced with the rise in arrivals form Afghanistan, in October 2015 the German Ministry of Interior Thomas de Maizières had already announced that Germany wanted to return to Afghanistan all the Afghan nationals who were not eligible for asylum, including those who had lived in Iran or Pakistan and, consequently, had no link to Afghanistan itself, and that to do so he would have urged the European Union to negotiate an agreement with the government of Kabul.  By invoking the need urgently facing the migration crisis, the political priorities of the Member States are now “deterrence” and “expulsion” and this has also gained the support of  EU Commission which is increasingly moving towards packaging these priorities in a format which  bypass the European Parliament and the lengthy formal procedures with a high risk of  human rights violations.  In fact, this new fast-track approach not only prevents any form of democratic scrutiny but also ignores the concerns of the civil society about the situation in Afghanistan and about the major risks of rights violations, such as the principle of non-refoulement, exposure to inhuman and degrading treatment, protection against collective expulsions and the right to asylum.

Afghans constitute the second-largest group of asylum seekers in Europe, with 196,170 applying in 2015. The country is experiencing ongoing and escalated conflict, despite the efforts of the EU to present it as a country that is safe for returnees and able to reintegrate them successfully. The conflict has left more than 1.2 million people without permanent homes and has resulted in three million refugees fleeing to Pakistan and Iran. Since January 2015, around 242,000 Afghans have fled to the EU. Furthermore, the country is already facing a large number of returnees from the region. In 2015, more than 190,000 Afghan documented refugees have returned from neighbouring countries. People are exposed to a deeply deteriorating security situation, as provinces such as Helmand and Kunduz fall in to the hands of armed groups yet again.

Despite this situation, the Joint Way Forward declaration gives clear signals that the European Union will once again engage in a conduct that puts into question its obligation to protect those fleeing conflicts or persecution and to safeguard the human rights of all persons as required by the EU Charter. The declaration provides for measures to facilitate the return and readmission of Afghan nationals, such as the use of non-scheduled flights to Kabul, joint flights from several EU Member States organized and coordinated by the European Border and Coast Guard Agency (Frontex), including the possibility to build a dedicated terminal for return in Kabul airport. The Joint Way Forward declaration also opens up the return of women and unaccompanied children and no mention is made to the best interest of the child. The document, in fact, states that “special measures will ensure that such vulnerable groups receive adequate protection, assistance and care throughout the whole process”.

It has to be acknowledged that some Members of the European Parliament have already raised several concerns on the legitimacy of the Joint Way Forward declaration as well as on its content. They have criticized the approach of the European Commission with regard to the adoption of informal readmission agreements as well as the conditionality imposed to third countries. In fact, the format introduced by the Partnership Framework implies a kind of connection between development aid and the third country’s willingness to cooperate for the management of migration flows. It is clear that countries like Afghanistan which are strongly dependent on foreign aid for their revenues might have no other choice but to forcibly accept to cooperate in order to receive development and financial support in exchange.

The European Union must comply with the provisions of the Treaties as well as with its democratic principles and protection of human rights, in order to avoid the replication of the EU-Turkey “statement” and the EU-Afghanistan Joint Way Forward “declaration” with other third countries, in primis Libya and Sudan which have already been identified as “interesting partners” by Italy.

 

ANNEX EU-Legal Framework on readmission agreements

EU Readmission Agreements (EURAs) are based on reciprocal obligations and are concluded between the European Union and non-EU countries to facilitate the return of people residing irregularly in a country to their country of origin or to a country of transit. The EU has stated that readmission agreements with third countries of both origin and transit constitute a cornerstone for effective migration management and for the efficient return of third country nationals irregularly present in the EU. The objective of these agreements for the EU Member States is to facilitate the expulsion of third country nationals either to their country of origin or to a country through which they transited on route to the EU. As such, they are crucial to the EU return policy, as defined in the Return Directive (Directive 2008/115/EC).

Readmission agreements are negotiated in a broader context where partner countries are usually granted visa facilitation, which means simpler procedures for their nationals to obtain shorter stay visas to come to EU Member States, and other incentives such as financial support for implementing the agreement or special trade conditions in exchange for readmitting people residing irregularly in the EU.

The legal basis for the conclusion of readmission agreements with third countries is Article 79(3) TFEU which states that “the Union may conclude agreements with third countries for the readmission to their countries of origin or provenance of third-country nationals who do not or who no longer fulfil the conditions for entry, presence or residence in the territory of one of the Member States”. These agreements are negotiated with the partner country on the basis of a negotiating mandate grated by the Council to the Commission and they are then concluded after the European Parliament has given its consent. According to article 218(6) TFEU the European Parliament must, in fact, give its consent prior to the conclusion of association and similar agreements. Moreover, according to article 210(10) TFEU the European Parliament shall be immediately and fully informed at all stages of the procedure.

 

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Legal Frameworks for Hacking by Law Enforcement: Identification, Evaluation and Comparison of Practices

EXECUTIVE SUMMARY OF A STUDY FOR THE EP LIBE COMMITEE.

FULL TEXT ACCESSIBLE  HERE  

by Mirja  GUTHEIL, Quentin  LIGER, Aurélie  HEETMAN, James  EAGER, Max  CRAWFORD  (Optimity  Advisors)

Hacking by law enforcement is a relatively new phenomenon within the framework of the longstanding public policy problem of balancing security and privacy. On the one hand, law enforcement agencies assert that the use of hacking techniques brings security, stating that it represents a part of the solution to the law enforcement challenge of encryption and ‘Going Dark’ without systematically weakening encryption through the introduction of ‘backdoors’ or similar techniques. On the other hand, civil society actors argue that hacking is extremely invasive and significantly restricts the fundamental right to privacy. Furthermore, the use of hacking practices pits security against cybersecurity, as the exploitation of cybersecurity vulnerabilities to provide law enforcement with access to certain data can have significant implications  for  the security of the internet.

Against this backdrop, the present study provides the LIBE Committee with relevant, actionable insight into the legal frameworks and practices for hacking by law enforcement. Firstly, the study examines the international and EU-level debates on the topic of hacking by law enforcement (Chapter 2), before analysing the possible legal bases for EU intervention in the field (Chapter 3). These chapters set the scene for the primary focus of the study: the comparative analysis of legal frameworks and practices for hacking by law enforcement across six selected Member States (France, Germany, Italy, the Netherlands, Poland and the UK), with further illustrative examples from three non-EU countries (Australia, Israel and the US) (Chapter 4). Based on these analyses, the study concludes (Chapter 5) and presents concrete recommendations and policy proposals for  EU  action  in  the field (Chapter 6).

The international and EU-level debates on the use of hacking techniques by law enforcement primarily evolve from the law enforcement challenge posed by encryption – i.e. the  ‘Going  Dark’  issue.

Going Dark is a term used to describe [the] decreasing ability [of law enforcement agencies] to lawfully access and examine evidence at rest on devices and evidence in motion across   communications   networks.1

According to the International Association of Chiefs of Police (IACP), law enforcement agencies are not able to investigate illegal activity and prosecute criminals without this evidence. Encryption technologies are cited as one of the major barriers to this access. Although recent political statements from several countries (including France, Germany, the UK and the US) seemingly call for ‘backdoors’ to encryption technologies, support for strong encryption at international and EU fora remains strong. As such, law enforcement agencies across the world started to use hacking techniques to bypass encryption. Although the term ‘hacking’ is not used by law enforcement agencies, these practices essentially mirror the techniques used by hackers (i.e. exploiting any possible vulnerabilities – including technical, system  and/or human  vulnerabilities  – within  an  information  technology  (IT) system).

Law enforcement representatives, such as the IACP and Europol, report that access to encrypted and other data through such hacking techniques brings significant investigative benefits. However, it is not the only possible law enforcement solution to the ‘Going Dark’ issue. Outside of the scope of this study, the other options include: requiring users to provide their password or decrypt their data; requiring technology vendors and service providers to bypass   the   security   of   their   own   products   and   services;   and   the    systematic   weakening   of encryption through the mandated introduction of ‘backdoors’ and/or weakened standards for encryption.

With the benefits of hacking established, a 2016 Joint Statement published by the European Union Agency for Network and Information Security (ENISA) and Europol2 noted that the use of  hacking  techniques also brings  several   key  risks.

The primary risk relates to the fundamental right to privacy and freedom of expression and information, as enshrined in international, EU and national-level law. Hacking techniques are extremely invasive, particularly when compared with traditionally intrusive investigative tools (e.g. wiretapping, house searches etc.). Through hacking, law enforcement can gain access to all data stored or in transit from a device; this represents a significant amount of data (e.g. a recent investigation by Dutch law enforcement collected seven terabytes of data, which translates into around 86 million pages of Microsoft Word documents3), as well as extremely sensitive data (e.g. a person’s location and movements, all communications, all stored data etc.). Consequently, the use of hacking techniques will inherently restrict the fundamental right to privacy.

Therefore, current debates at international and EU fora focus on assessing and providing recommendations on the current legal balances and safeguards for the restriction of the right to privacy by hacking techniques. However, these debates have assumed that hacking practices are necessary for law enforcement and simply require governing laws; they have not discussed whether the use of hacking techniques by law enforcement is necessary and proportional. The law enforcement assertions regarding the necessity of these invasive tools have  not   been  challenged.

The second key risk relates to the security of the internet. Law enforcement use of hacking techniques has the potential to significantly weaken the security of the internet by “[increasing] the attack surface for malicious abuse”4. Given that critical infrastructure and defence organisations, as well as law enforcement agencies themselves, use the technologies targeted and potentially weakened by law enforcement hacking, the potential ramifications reach  far  beyond  the intended  target.

As such, debates at international and EU fora focus on the appropriate balances between security and privacy, as well as security and cybersecurity. Regarding security v. privacy, the debates to date have assessed and provided recommendations on the legislative safeguards required to ensure that hacking techniques are only permitted in situations where a restriction of the fundamental right to privacy is valid in line with EU legislation (i.e. legal, necessary and proportional). Regarding security v. cybersecurity, the debates have been limited and primarily centre around the use and/or reporting of zero-day vulnerabilities discovered  by  law enforcement agencies.

Further risks not discussed in the Joint Statement but covered by this study include: the risks to territorial sovereignty – as law enforcement agencies may not know the physical location of the target data; and the risks related to the supply and use of commercially-developed hacking tools by governments with poor consideration for human rights.

Alongside the analysis of international and EU debates, the study presents hypotheses on the legal  bases  for  EU  intervention  in  the  field. Although  possibilities for  EU  legal  intervention  in several areas are discussed, including mutual admissibility of evidence (Art. 82(2) TFEU), common investigative techniques (Art. 87(2)(c) TFEU), operational cooperation (Art. 87(3) TFEU) and data protection (Art. 16 TFEU, Art. 7 & 8 EU Charter), the onus regarding the development of legislation in the field is with the Member States. As such, the management of the risks associated with law enforcement activities is governed at the Member State level.

As suggested by the focus of the international and EU discussions, concrete measures need to be stipulated at national-level to manage these risks. This study presents a comparative analysis of the legal frameworks for hacking by law enforcement across six Member States, as well as certain practical aspects of hacking by law enforcement, thereby providing an overview of the primary Member State mechanisms for the management of these risks. Further illustrative examples are provided from research conducted in three non-EU countries.

More specifically, the study examines the legal and practical balances and safeguards implemented at national-level to ensure: i) the legality, necessity and proportionality of restrictions to the fundamental  right  to  privacy;   and ii) the security  of  the internet.

Regarding restrictions to the right to privacy, the study first examines the existence of specific legal frameworks for hacking by law enforcement, before exploring the ex-ante and ex-post conditions and mechanisms stipulated to govern restrictions of the right to privacy and ensure they are legal, necessary  and  proportional.

It is found that hacking practices are seemingly necessary across all Member States examined, as four Member States (France, Germany, Poland and the UK) have adopted specific legislative provisions and the remaining two are in the legislative process. For all Member States except Germany, the adoption of specific legislative provisions occurred in 2016 (France, Poland and the UK) or will occur later (Italy, the Netherlands).  This  confirms the  new  nature  of these investigative techniques.

Additionally, law enforcement agencies in all Member States examined have used, or still use, hacking techniques in the absence of specific legislative provisions, under so-called ‘grey area’ legal provisions. Given the invasiveness of hacking techniques, these grey areaprovisions are considered  insufficient  to adequately  protect the right to privacy.

Where specific legal provisions have been adopted, all stakeholders agree that a restriction of the right to privacy requires the implementation of certain safeguards. The current or proposed legal frameworks of all six Member States comprise a suite of ex-ante conditions and ex-post mechanisms that aim to ensure the use of hacking techniques is proportionate and necessary. As recommended by various UN bodies, the provisions of primary importance include judicial authorisation of hacking practices, safeguards related to the nature, scope and duration of possible measures (e.g. limitations to crimes of a certain gravity and the  duration  of  the hack,  etc.) and  independent   oversight.

Although many of these types of recommended conditions are common across the Member States examined – demonstrated in the below table – their implementation parameters differ. For instance, both German and Polish law permit law enforcement hacking practices without judicial authorisation in exigent circumstance if judicial authorisation is achieved in a specified timeframe. However, the timeframe differs (three days in Germany compared with five days in Poland). These differences make significant difference, as the Polish timeframe was criticised  by the Council  of  Europe’s  Venice Commission  for being  too long.5

Furthermore, the Member States examined all accompany these common types of ex-ante and ex-post conditions with different, less common conditions. This is particularly true for ex-post oversight mechanisms. For instance, in Poland, the Minister for internal affairs provides macro-level information to the lower (Sejm) and upper (Senat) chambers of Parliament;6 and in the UK, oversight is provided by the Investigatory Powers Commissioner, who reviews all cases of hacking by law enforcement, and the Investigatory Powers Tribunal, which  considers disputes or  complaints surrounding  law enforcement  hacking.7

Key ex-ante considerations
Judicial authorisation The    legal    provisions    of    all    six    Member    States    require    ex-ante judicial        authorisation        for        law        enforcement        hacking.        The information  to  be  provided  in  these requests differ.

Select     Member     States     (e.g.     Germany,     Poland,     the     UK)     also provide for hacking without prior judicial authorisation in exigent circumstances  if  judicial  authorisation  is subsequently  provided. The timeframes  for  ex-post authorisation  differ.

Limitation by crime and  duration All  six Member  States  restrict  the  use  of  hacking  tools  based  on the   gravity   of   crimes.    In    some    Member   States,    the    legislation presents  a  specific  list  of  crimes  for  which  hacking  is permitted; in     others,     the    limit    is    set     for    crimes    that    have    a    maximum custodial    sentence   of   greater   than    a   certain   number    of   years. The lists and numbers  of years required differ by Member   State.

Many Member States also restrict the duration for which hacking may   be   used.   This   restriction   ranges   from   maximum   1   month (France, Netherlands) to a maximum of 6 months (UK), although extensions     are     permitted     under     the     same     conditions     in     all Member States.

Key ex-post considerations
Notification and effective remedy Most    Member    States    provide    for    the    notification    of    targets    of hacking  practices and  remedy  in  cases  of unlawful   hacking.
Reporting and oversight Primarily, Member States report at a micro-level through logging hacking  activities and  reporting them  in  case  files.

However,   some   Member   States   (e.g.   Germany,   Poland   and   the UK) have macro-level  review  and  oversight mechanisms.

Furthermore, as regards the issue of territoriality (i.e. the difficulty law enforcement agencies face obtaining the location of the data to be collected using hacking techniques), only one Member States, the Netherlands, legally permits the hacking of devices if the location is unknown. If the device turns out to be in another jurisdiction, Dutch law enforcement must apply  for Mutual  Legal  Assistance.

As such, when aggregated, these provisions strongly mirror Article 8 of the European Convention on Human Rights, as well as the UN recommendations and paragraph 95 of the ECtHR  judgement  in  Weber and  Saravia  v.  Germany.  However,   there are  many,  and  varied, criticisms when the Member State conditions are examined in isolation. Some of the provisions criticised include: the limits based on the gravity of crimes (e.g. the Netherlands, France and Poland); the provisions for notification and effective remedy (e.g. Italy and the Netherlands); the process for screening and deleting non-relevant data (Germany); the definition of devices that can be targeted (e.g. the Netherlands); the duration permitted for hacking (e.g. Poland); and a lack of knowledge amongst the judiciary (e.g. France, Germany, Italy and the Netherlands).With this said, certain elements, taken in isolation, can be called good  practices. Such  examples  are  presented below.

Select  good practice: Member State legislative frameworks

Germany: Although they were deemed unconstitutional in a 2016 ruling, the provisions for the screening and deletion of data related to the core area of private life are a positive step. If the provisions are amended, as stipulated in the ruling, to ensure screening by an independent body, they would provide strong protection for the targeted individual’s private data.

Italy: The 2017 draft Italian law includes a range of provisions related to the development and monitoring of the continued use of hacking tools. As such, one academic stakeholder remarked that the drafting of the law must have been driven by technicians. However, these provisions bring significant benefits to the legislative provisions in terms of supervision and oversight of the use of hacking tools. Furthermore, the Italian draft law takes great care to separate the functionalities of the hacking tools, thus protecting against the overuse or abuse of a  hacking tool’s  extensive  capabilities.

Netherlands: The Dutch Computer Crime III Bill stipulates the need to conduct a formal proportionality assessment for each hacking request, with the assistance of a dedicated Central Review Commission (Centrale Toetsings Commissie). Also, the law requires rules to be laid down on the authorisation and expertise of the investigation officers that can perform hacking.

With these findings in mind, the study concludes that the specific national-level legal provisions examined provide for the use of hacking techniques in a wide array of circumstances. The varied combinations of requirements, including those related to the gravity of crimes, the duration and purpose of operations and the oversight, result in a situation where the law does not provide for much stricter conditions than are necessary for less  intrusive  investigative activities such  as interception.

Based on the study findings,  relevant  and actionable policy proposals and recommendations have been developed under the two key elements: i) the fundamental right  to  privacy;  and  ii) the security  of the internet.

Recommendations and policy proposals: Fundamental  right  to  privacy

It is recommended that the use of ‘grey area’ legal provisions is not sufficient to protect the fundamental right to privacy. This is primarily because existing legal provisions do not provide for the more invasive nature of hacking techniques and do not provide for the legislative precision  and  clarity  as  required  under  the  Charter and the  ECHR.

Furthermore, many of these provisions have only recently been enacted. As such, there is a need for robust evidence-based monitoring and evaluation of the practical application of these provisions. It is therefore recommended that the application of these new legal provisions is evaluated regularly at national level, and that the results of these evaluations are  assessed at  EU-level.

If specific legislative provisions are deemed necessary, the study recommends a range of good practice, specific ex-ante and ex-post provisions governing the use of hacking practices by  law  enforcement  agencies. These are detailed  in  Chapter 6.

Policy proposal 1: The European Parliament should pass a resolution calling on Member States to conduct a Privacy Impact Assessment when new laws are proposed to permit and govern the use of hacking techniques by law enforcement agencies. This Privacy Impact Assessment should focus on the necessity and proportionality of the use of hacking tools and should  require input  from  national  data protection  authorities.

Policy proposal 2: The European Parliament should reaffirm the need for Member States to adopt a clear and precise legal basis if law enforcement agencies are to use hacking techniques.

Policy proposal 3: The European Parliament should commission more research or encourage the European Commission or other bodies to conduct more research on the topic. In response to the Snowden revelations, the European Parliament called on the EU Agency for Fundamental Rights (FRA) to thoroughly research fundamental rights protection in the context of surveillance. A similar brief related to the legal frameworks governing the use of hacking techniques by law enforcement across all EU Member States would act as an invaluable piece  of  research.

Policy proposal 4: The European Parliament should encourage Member States to undertake evaluation and monitoring activities on the practical application of the new legislative provisions  that  permit  hacking  by  law  enforcement  agencies.

Policy proposal 5: The European Parliament should call on the EU Agency for Fundamental Rights (FRA) to develop a practitioner handbook related to the governing of hacking by law enforcement. This handbook should be intended for lawyers, judges, prosecutors, law enforcement officers and others working with national authorities, as well as non­governmental organisations and other bodies confronted with legal questions in the areas set out by the handbook. These areas should cover the invasive nature of hacking techniques and relevant safeguards as per international and EU law and case law, as well as appropriate mechanisms for supervision  and   oversight.

Policy proposal 6: The European Parliament should call on EU bodies, such as the FRA, CEPOL and Eurojust, to provide training for national-level members of the judiciary and data protection authorities, in collaboration with the abovementioned handbook, on the technical means for hacking in use across the Member States, their potential for invasiveness and the principles of  necessity  and  proportionality in  relation  to these  technical  means.

Recommendations and policy proposals: Security of  the  internet

The primary recommendation related to the security of the internet is that the position of the EU against the implementation of ‘backdoors’ and similar techniques, and in support of strong encryption standards, should be reaffirmed, given the prominent role encryption plays in our society and its importance to the EU’s Digital Agenda. To support this position, the EU should ensure continued engagement with global experts in computer science as well as civil society privacy and  digital  rights groups.

The actual impacts of hacking by law enforcement on the security of the internet are yet unknown. More work should be done at the Member State level to assess the potential impacts such that these data can feed in to overarching discussions on the necessity and proportionality of law enforcement hacking. Furthermore, more work should be done, beyond understanding the risks to the security of the internet, to educate those involved in the authorisation and use of  hacking  techniques by law enforcement.

At present, the steps taken to safeguard the security of the internet against the potential risks of hacking are not widespread. As such, the specific legislative provisions governing the use of hacking techniques by law enforcement, if deemed necessary, should safeguard the security of the internet and the security of the device, including reporting the vulnerabilities used to gain access to a device to the appropriate technology vendor or service provider; and  ensure  the  full  removal  of  the software  or hardware from the targeted  device.

Policy proposal 7: The European Parliament should pass a resolution calling on Member States to conduct an Impact Assessment to examine the impact of new or existing laws governing  the  use  of hacking  techniques by  law  enforcement on  the  security  of  the internet.

Policy proposal 8: The European Parliament, through enhanced cooperation with Europol
and the European Union Agency for Network and Information Security (ENISA), should
reaffirm its commitment to strong encryption considering discussions on the topic of hacking by law enforcement. In addition, the Parliament should reaffirm its opposition to the implementation of  
backdoors and  similar techniques in information technology infrastructures or  services.

Policy proposal 9: Given the lack of discussion around handling zero-day vulnerabilities, the European Parliament should support the efforts made under the cybersecurity contractual Public-Private Partnership (PPP) to develop appropriate responses to handling zero-day vulnerabilities, taking into consideration the risks related to fundamental rights and the security  of the internet.

Policy proposal 10: Extending policy proposal 4, above, the proposed FRA handbook should also cover the risks  posed  to  the  security  of the  internet  by  using hacking  techniques.

Policy proposal 11: Extending policy proposal 5, training provided to the judiciary by EU bodies such as FRA, CEPOL and Eurojust should also educate these individuals on the risks posed  to  the security  of  the internet  by  hacking  techniques.

Policy proposal 12: Given the lack of discussion around the risks posed to the security of the internet by hacking practices, the European Parliament should encourage debates at the appropriate fora specific to understanding this risk and the approaches to managing this risk. It is encouraged that law enforcement representatives should be present within such discussions.

The 2016 EU Justice Scoreboard

NOTA BENE : THE FULL REPORT IS ACCESSIBLE HERE 

The 2016 EU Justice Scoreboard was adopted by the European Commission on 10 April 2016 under reference number COM(2017) 167.

THE 2017 EU JUSTICE SCOREBOARD

(…) Introduction

‘Effective justice systems support economic growth and defend fundamental rights. That is why Europe promotes and defends the rule of law (1).’ This role of Member States’ justice systems underlined by Jean-Claude Juncker, President of the European Commission, is crucial for ensuring that individuals and businesses can fully enjoy their rights, for strengthening mutual trust and for building a business and investment-friendly environment in the single market.

Moreover, as underlined by Frans Timmermans, First Vice-President of the European Commission, effective justice systems also underpin the application of EU law: ‘The European Union is built on a common set of values, enshrined in the Treaty. These values include respect for the rule of law. That is how this organisation functions, that is how our Member States ensure the equal application of EU law across the European Union (2).’ For these reasons, improving the effectiveness of national justice systems is a well-established priority of the European semester — the EU’s annual cycle of economic policy coordination.

Independence, quality and efficiency are the key elements of an effective justice system. The 2017 EU Justice Scoreboard (‘the Scoreboard’) helps Member States to achieve this priority by providing an annual comparative overview of the independence, quality and efficiency of national justice systems. Such a comparative overview assists Member States in identifying potential shortcomings, improvements and good practices as well as trends in the functioning of national justice systems over time. It is also crucial for the effectiveness of EU law (3).

When applying EU law, national courts act as EU courts and ensure that the rights and obligations provided under EU law are enforced effectively. For this reason, the Scoreboard looks closely at the functioning of courts when applying EU law in specific areas.

The 2017 edition further develops this overview and examines new aspects of the functioning of justice systems:

– to better understand how consumers access the justice system, it examines which channels they use to submit complaints against companies (e.g. courts, out of court methods), how legal aid and court fees influence access to justice, particularly for persons at-risk-of-poverty, the length of court proceedings and before consumer authorities and how many consumers are using the online dispute resolution (ODR) platform which became operational in 2016.

–  to keep track of the situation of judicial independence in Member States, this edition presents the result of a new survey on the perception of citizens and companies; it shows new data on safeguards for protecting judicial independence.

– this edition continues to examine how national justice systems function in specific areas of EU law relevant for the single market and for an investment-friendly environment.

It presents a first overview of the functioning of national justice systems when applying EU anti-money laundering legislation in criminal justice. It also examines the length of proceedings for provisional measures to prevent imminent damages in certain areas of law.

– in order to have a clearer picture of the current use of information and communication technologies (ICT) in justice systems, this edition presents the results from a survey of lawyers on how they communicate with courts and for which reasons they use ICT.

– as standards on the functioning of courts can drive up the quality of justice systems, this edition examines in more detail standards aiming to improve the court management and the information given to parties on progress of their case.

As this is the fifth edition, the Scoreboard also takes stock of the progress achieved over time.

Although data are still lacking for certain Member States, the data gap continues to decrease, in particular for indicators on the efficiency of justice systems.

The fruitful cooperation with Member States’ contact points on national justice systems (4) and various committees and European judicial networks have enriched the data significantly.

The remaining difficulties in gathering data are often due to insufficient statistical capacity or to the fact that the national categories for which data are collected do not exactly correspond to the ones used for the Scoreboard. In very few cases, the data gap is due to the lack of willingness of certain national authorities to contribute. The Commission will continue to encourage Member States to further reduce this data gap.

(…) 2. Context

Justice remain high on the agenda (…)

In 2016, a large number of Member States pursued their efforts to improve the effectiveness of their national justice system. Justice reforms take time, sometimes several years from the first announcement of new reforms, over the adoption of legislative and regulatory measures, to the actual implementation of the adopted measures. Figure 1 presents an overview of adopted and envisaged justice reforms. It is a factual presentation of ‘who does what,’ without any qualitative evaluation. In that respect, it is important to underline that any justice reform should uphold the rule of law and comply with European standards on judicial independence. Figure 1 shows that procedural law remains an area of particular attention in a number of Member States and that a significant amount of new reforms have been announced for legal aid, alternative dispute resolution methods (ADR), court specialisation and judicial maps. A comparison with the 2015 Scoreboard shows that the level of activity generally remained stable, both on the announced reforms and measures under negotiation. (…)

The EU is encouraging certain Member States to improve the effectiveness of their justice system. In the 2016 European semester, based on a proposal from the Commission, the Council addressed country specific recommendations to six Member States in this area (21).

Two of the Member States which were subject to a country specific recommendation in 2015 did not receive a recommendation in 2016 due to the progress they had achieved (22).

In addition to those Member States subject to country specific recommendations, a further eight Member States are still facing particular challenges and are being closely monitored by the Commission through the European semester and economic adjustment programmes (23). The Commission further assists justice reforms in Romania and Bulgaria through the cooperation and verification mechanism (24).

In 2016, the Commission adopted, under the EU Rule of Law Framework (25), two recommendations regarding the rule of law in Poland, setting out the Commission’s concerns and recommending how these concerns can be addressed (26). The Commission considers it necessary that Poland’s Constitutional Tribunal is able to fully carry out its responsibilities under the Constitution, in particular to ensure an effective constitutional review of legislative acts.

The Commission continues to support justice reforms through the European Structural and Investment Funds (ESI Funds). During the current programming period 2014 – 2020, ESI Funds will provide up to EUR 4.2 billion to support Member States’ efforts to enhance the capacity of their public administration, including justice. 14 Member States have identified justice as a priority area for support by the ESI Funds. The Commission emphasises the importance of taking a result-oriented approach when implementing these priorities and calls upon Member States to evaluate the impact of ESI Funds support. In 2016, five Member States (27) requested technical assistance from the Structural Reform Support Service of the Commission, for example on sharing national experiences regarding judicial map reforms.

The positive economic impact of the good functioning of justice system deserves these efforts. A 2017 study by the Joint Research Centre identifies correlations between improvement of court efficiency and the growth rate of the economy and between businesses’ perception of judicial independence and the growth in productivity (28).

Where judicial systems guarantee the enforcement of rights, creditors are more likely to lend, firms are dissuaded from opportunistic behaviour, transaction costs are reduced and innovative businesses are more likely to invest. This positive impact is also underlined in further research, including from the International Monetary Fund, European Central Bank, OECD, World Economic Forum, and World Bank (29). (…)

Questions and Answers

 What is the EU Justice Scoreboard?

The EU Justice Scoreboard is a comparative information tool that aims to assist the EU and Member States to improve the effectiveness of their national justice systems by providing objective, reliable and comparable data on the quality, independence and efficiency of justice systems in all Member States. The Scoreboard does not present an overall single ranking but an overview of how all the justice systems function, based on various indicators that are of common interest for all Member States. The Scoreboard does not promote any particular type of justice system and treats all Member States on an equal footing. Timeliness, independence, affordability and user-friendly access are some of the essential parameters of an effective justice system, whatever the model of the national justice system or the legal tradition in which it is anchored.

The Scoreboard mainly focuses on litigious civil and commercial cases as well as administrative cases in order to assist Member States in their efforts to pave the way for a more investment, business and citizen-friendly environment. The Scoreboard is a comparative tool which evolves in dialogue with Member States and the European Parliament, with the objective of identifying the essential parameters of an effective justice system.

What is the methodology of the EU Justice Scoreboard?

The Scoreboard uses various sources of information. Large parts of the quantitative data are provided by the Council of Europe Commission for the Evaluation of the Efficiency of Justice (CEPEJ) with which the Commission has concluded a contract to carry out a specific annual study. These data range from 2010 to 2015, and have been provided by Member States according to CEPEJ’s methodology. The study also provides detailed comments and country specific information sheets that give more context. They should be read together with the figures (5).

Data on the length of proceedings collected by CEPEJ show the ‘disposition time’ which is a calculated length of court proceedings (based on a ratio between pending and resolved cases). Data on courts’ efficiency in applying EU law in specific areas show the average length of proceedings derived from actual length of court cases. It should be noted that the length of court proceedings may differ substantially geographically within a Member State, particularly in urban centres where commercial activities may lead to a higher caseload.

The other sources of data are: the group of contact persons on national justice systems (6), the European Network of Councils for the Judiciary (ENCJ) (7), the Network of the Presidents of the Supreme Judicial Courts of the EU (NPSJC) (8), Association of the Councils of State and Supreme Administrative Jurisdictions of the EU (ACA-Europe) (9), the European Competition Network (ECN) (10), the Communications Committee (COCOM) (11), the European Observatory on infringements of intellectual property rights (12), the Consumer Protection Cooperation Network (CPC) (13), the Expert Group on Money Laundering and Terrorist Financing (EGMLTF) (14), Eurostat (15), the European Judicial Training Network (EJTN) (16), the Council of Bars and Law Societies of Europe (CCBE) (17) and the World Economic Forum (WEF) (18).

The methodology for the Scoreboard has been further developed in close cooperation with the group of contact persons on national justice systems, particularly through a questionnaire and collecting data on certain aspects of the functioning of justice systems.

The Scoreboard contains figures on all three main elements of an effective justice system: quality, independence and efficiency. These should be read together, as all three elements are necessary for the effectiveness of a justice system and are often interlinked (initiatives aimed at improving one of them may have an influence on the other).

How does the EU Justice Scoreboard feed into the European semester?

The Scoreboard provides a comparative overview of the quality, independence and efficiency of national justice systems and helps Member States to improve the effectiveness of their national justice systems. This makes it easier to identify shortcoming and best practices and to keep track of challenges and progress. In the context of the European semester, country-specific assessments are carried out through bilateral dialogue with the national authorities and stakeholders concerned. This assessment takes into account the particularities of the legal system and the context of the Member States concerned. It may lead to the Commission proposing to the Council to adopt country-specific recommendations on the improvement of national justice systems (19).

NOTES

 

(1) 2016 State of the Union Speech delivered before the European Parliament on 14 September 2016: https://ec.europa.eu/priorities/state-union-2016_en
(2) http://europa.eu/rapid/press-release_SPEECH-16-2023_en.htm
(3) See also Communication from the Commission — EU law: Better results through better application, 13 December 2016, 2017/C 18/02.
(4) In view of the preparation of the EU Justice Scoreboard and to promote the exchange of best practices on the effectiveness of justice systems, the Commission asked Member States to designate two contact persons, one from the judiciary and one from the ministry of justice. Regular meetings of this informal group are taking place.
(5) http://ec.europa.eu/justice/effective-justice/scoreboard/index_en.htm
(6) In view of the preparation of the EU Justice Scoreboard and to promote the exchange of best practices on the effectiveness of justice systems, the Commission asked Member States to designate two contact persons, one from the judiciary and one from the ministry of justice. Regular meetings of this informal group are taking place.
(7) ENCJ unites the national institutions in the EU Member States which are independent of the executive and legislature, and which are responsible for the support of the Judiciaries in the independent delivery of justice: https://www.encj.eu/
(8) NPSJC provides a forum through which European institutions are given an opportunity to request the opinions of Supreme Courts and to bring them closer by encouraging discussion and the exchange of ideas: http://network-presidents.eu/
(9) ACA-Europe is composed of the Court of Justice of the EU and the Councils of State or the Supreme administrative jurisdictions of each EU Member State: http://www.juradmin.eu/index.php/en/
(10) ECN has been established as a forum for discussion and cooperation of European competition authorities in cases where Articles 101 and 102 of the TFEU are applied. The ECN is the framework for the close cooperation mechanisms of Council Regulation 1/2003. Through the European Competition Network, the Commission and the national competition authorities in all EU Member States cooperate with each other: http://ec.europa.eu/competition/ecn/index_en.html
(11) COCOM is composed of representatives of EU Member States. Its main role is to provide an opinion on the draft measures that the Commission intends to adopt: https://ec.europa.eu/digital-single-market/en/communications-committee
(12) The European Observatory on Infringements of Intellectual Property Rights is a network of experts and specialist stakeholders. It is composed of public- and private-sector representatives, who collaborate in active working groups. https://euipo.europa.eu/ohimportal/en/web/observatory/home
(13) CPC is a network of national authorities responsible for enforcing EU consumer protection laws in EU and EEA countries: http://ec.europa.eu/internal_market/scoreboard/performance_by_governance_tool/consumer_protection_cooperation_network/index_en.htm
(14) EGMLTF meets regularly to share views and help the Commission define policy and draft new legislation: http://ec.europa.eu/justice/civil/financial-crime/index_en.htm
(15) Eurostat is the statistical office of the EU: http://ec.europa.eu/eurostat/about/overview
(16) EJTN is the principal platform and promoter for the training and exchange of knowledge of the European judiciary. It develops training standards and curricula, coordinates judicial training exchanges and programmes, disseminates training expertise and promotes cooperation between EU judicial training institutions. EJTN has some 34 members representing EU states as well as EU transnational bodies. http://www.ejtn.eu/
(17) CCBE is an international non-profit association which represents European bars and law societies. CCBE membership includes the bars and law societies of 45 countries from the EU, the EEA, and wider Europe: http://www.ccbe.eu/
(18) WEF is an International Organisation for Public-Private Cooperation, whose members are companies: https://www.weforum.org/
(19) The reasons for country-specific recommendations and the progress on the implementation of such recommendations are presented on an annual basis by the Commission in individual country reports in the form of Staff Working Documents: https://ec.europa.eu/info/publications/2017-european-semester-country-reports_en
(20) The information has been collected in cooperation with the group of contact persons on national justice systems for 25 Member States. PL and UK did not submit information. DE explained that a number of reforms are under way as regards judiciary, where the scope and scale of the reform process can vary within the 16 federal states.
(21) BG, HR, IT, CY, PT, SK; see Council Recommendation of 12 July 2016 on the 2016 National Reform Programme of Bulgaria and delivering a Council opinion on the 2016 Convergence Programme of Bulgaria, (2016/C 299/08); Council Recommendation of 12 July 2016 on the 2016 National Reform Programme of Croatia and delivering a Council opinion on the 2016 Convergence Programme of Croatia (2016/C 299/23); Council Recommendation of 12 July 2016 on the 2016 National Reform Programme of Italy and delivering a Council opinion on the 2016 Stability Programme of Italy, (2016/C 299/01); Council Recommendation of 12 July 2016 on the 2016 National Reform Programme of Cyprus and delivering a Council opinion on the 2016 Stability Programme of Cyprus, (2016/C 299/07); Council Recommendation of 12 July 2016 on the 2016 National Reform Programme of Portugal and delivering a Council opinion on the 2016 Stability Programme of Portugal, (2016/C 299/26); Council Recommendation of 12 July 2016 on the 2016 National Reform Programme of Slovakia and delivering a Council opinion on the 2016 Stability Programme of Slovakia, (2016/C 299/15).
(22) LV and SI.
(23) BE, ES, LV, MT, PL, RO, SI. These challenges have been reflected in the recitals of the Country-Specific Recommendations and the country reports relating to these Member States. The country reports are available at: https://ec.europa.eu/info/publications/2017-european-semester-country-reports_en. Furthermore, justice reforms in EL are closely being monitored in the context of the Economic Adjustment Programme for Greece.
(24) Report on progress in Bulgaria under the Cooperation and Verification Mechanism, COM(2017) 43 final; Report on progress in Romania under the Cooperation and Verification Mechanism COM(2017) 44 final.
(25) COM(2014) 158 final/2.
(26) Commission Recommendation (EU) 2016/1374 of 27 July 2016 regarding the rule of law in Poland, OJ L 217, 12.8.2016, p. 53; Commission Recommendation (EU) 2017/146 of 21 December 2016 regarding the rule of law in Poland, OJ L 22, 27.1.2017, p. 65. See also IP/16/2643 and IP/16/4476.
(27) BG, EL, HR, CY, SI.
(28) ‘The judicial system and economic development across EU Member States’, JRC (forthcoming).
(29) See references in the 2016 EU Justice Scoreboard.

The Return of the Sovereign: A Look at the Rule of Law in Hungary – and in Europe

ORIGINAL PUBLISHED ON VERFASSUNGSBLOG ( 5 Apr 2017 )

by Renáta Uitz (*)

Spring arrived in Budapest with sunshine, magnolias in full bloom, hordes of stag partiers from the U.K. – and a sovereign ready to fight against foreign invaders by legal means. After a lengthy media and political campaign against migrants, foreign influence and George Soros, the Hungarian government resorted to a surgical strike via lawmaking. The first bills of the spring seek to regulate foreign universities and civil society organizations receiving foreign funds with new-found vigor and persistence. This regulatory campaign is launched in the spirit of reclaiming national sovereignty. Were the Hungarian government to succeed in its recent efforts, it may well seriously shatter whatever is left from the rule of law in Europe.

A new law and an alleged bill

On Sunday, April 2, 2017 thousands of Hungarians spent their afternoon demonstrating against the impending amendment of the national higher education law (Act no. 204 of 2011). The amendment became law with the speed of light: the bill was tabled on March 28, 2017 and was passed by the Hungarian Parliament in a procedure of exceptional urgency on April 4, 2017 amidst intense international and domestic protest.

The disputed amendment sought to introduce brand new conditions for the operation of universities accredited outside the EU (foreign universities in the terminology of the bill) in Hungary. According to the reasoning of the Minister of Education who tabled the bill, the amendment aims to regulate third-country (non-EU) universities, as their operation is significant for Hungary’s international relations, and because the movement of scholars and students presents a genuine national security concern.

Among several other conditions the amended law requires foreign universities to maintain a campus in the jurisdiction which has accredited them. The Hungarian government’s concern is that without a campus in the accrediting company, the foreign accreditation agency does not continue to exercise quality control over these institutions. Also, a foreign university may be established solely on the basis of an international agreement concluded by the Hungarian government and the jurisdiction which accredited the institution.

By the time the protesters got home on Sunday, they found out from a news portal that the government appears to have a bill ready to discipline civil society organizations receiving foreign funds. The leaked document which very clearly resemble a bill has not yet been tabled. The idea is to have NGOs which receive more than 7.2M HUF (approx. 24.800 USD / 23.200 EUR) to register themselves with the government as “foreign funded” NGOs. The measure is justified in the name of the fight against money laundering and international terrorism, and is placed in the legal framework of existing rules against money-laundering. According to the preamble of the bill, civil society organizations may be used in Hungary by unknown foreign interest groups to influence Hungarian politics against the interests of the Hungarian people and thus endanger the “influence free operation” of legal institutions.

In the meantime, the self-defending sovereign seeks to gain support to warding off foreign influence in a freshly launched National Consultation. A National Consultation is a direct mailing campaign surveying Hungarian citizens on “important national questions.” (It is not to be mistaken for a referendum or plebiscite.) In this round the government seeks to stop Brussels from abolishing the reduction of utility fees and imposing illegal migrants on Hungary, while it also seeks to enhance the financing of civil society organizations. According to the secretary of state announcing the latest survey“[p]articipating in the national consultation is a strong manifestation of support for Hungary’s independence.”

The legal measures launched in April clearly fit in this rhetoric and mental framework of defending national independence and sovereignty from unwanted foreign influence. But what does this have to do with the rule of law? And why should anyone in Europe care?

Rule of law – rule by law?

The measures discussed in this post fail to meet even the most basic features of how legal rules are envisioned in a rule of law framework. The rules are not general or neutral: they target particular legal entities under the guise of general norms. Although the measures are justified by the need to control harmful foreign influence, they are hardly necessary or proportionate to the aims to be achieved. The manner and speed with which the amendment of the higher education law was passed is antithetical to the most basic premises of legal certainty. These rules single out particular legal entities chosen on the basis of political (in)convenience and subject these target organizations to special treatment serving arbitrary political aims.

The targets of the recent legal measures are organizations which are not government-funded (thus, not government-controlled) and appear to have a  public presence which the government views to be harmful or at least dangerous to Hungarian national identity.

The amendment of the higher education law affects 28 institutions of higher education, out of which 27 do not meet the newly introduced conditions of operation. From the public discourse it transpired very quickly that the primary target of this legislative measure was Central European University, a private graduate university founded by George Soros. Sources in the ruling party regularly referred to CEU in the media as the Soros-university. The parliamentary debate on the bill made it evident that CEU indeed was the target of the measure.

The government’s own communication has made it crystal clear that the leaked NGO bill fits in the Hungarian government’s efforts to rid Hungary of Mr Soros’s philanthropy. In the past few days voices in the ruling party called on the Hungarian government to refuse to pay the Hungarian Helsinki Committee (sic) which had won a major case before the ECtHR challenging the core of ideas of the Hungarian government’s border control measures. This is a mild gesture compared to the political test balloons which suggested that Hungary should exit the European Convention on Human Rights.

In light of the above it would be hard to claim that the newly enacted or the leaked bill contain legal norms of general application. Despite the carefully crafted language of these bills and the conditions they set, it is clear for an observer familiar with the local context that these bills are political instruments targeting very specific legal entities. This is not to suggest that it is per se illegitimate for a government to re-regulate a market sector inhabited by a handful of actors. It is at least curious that e.g. the foreign universities affected by the newly adopted amendment had not been involved in the preparation of the bill, nor had they been invited to participate in the legislative process.

As for the necessity and proportionality of the legal measures against the foreign universities, it is important to note that the operation of these institutions has been well-familiar to the Hungarian authorities. In the heat of the protest against the bill, the Education Authority confirmed that CEU had met the conditions of operation in Hungary under the existing legal framework. Thus, the regulatory impetus and especially the special emergency procedure with which the bill was passed in Parliament are hard to justify even at first sight.

As for the conditions in the amended higher education law, one cannot help but notice that the overwhelming majority of the affected institutions do not meet them at the time of their adoption and would also find it most challenging to comply with them in the immediate future. Under the newly passed amendment they would need to broker an international agreement and open a campus in a second country where they are not present at the moment. This is hardly a coincidence in the case of a bill which affects roughly two dozen institutions which are well-familiar to the very ministry which prepared the bill to re-regulate foreign actors in the education sector.

As for the conditions themselves, the idea that foreign universities can only operate in Hungary based on an international agreement deserves special attention. This condition in and of itself introduces the sovereign to the picture with its might and doubles its weight. It is not only that the sovereign sets a condition, but it also takes the sovereign’s benevolence for a foreign university to be able to meet this condition. If the Hungarian government were not in the mood to compromise with a foreign government on the principles of establishing a university, this statutory condition cannot be met by the organization to which it applies.

Furthermore, a last minute rider to the bill further specified this requirement: for federal entities the Hungarian government is expected to conclude an international agreement with the federal unit in which the university had been accredited, based on the prior approval of the respective federal government. Now, in case such a legal construct (i.e. a state-level treaty with prior federal consent) does not exist in the foreign jurisdiction in question, the condition for the operation of a foreign university set by Hungarian law simply cannot be met.

In brief, these adopted and planned laws are best seen as the decisions of a free-roaming sovereign striking its subjects at will, with the force of the law. This strategy is familiar in Hungary: when a new law on churches was enacted in 2011 to divest hundreds of religious organizations of their legal entity status, the reasons were clearly disclosed in the legislative debate: it is for Parliament, as the representative of the sovereign will of the people, to decide who is a church and who is not. All the Hungarian government learnt since 2011 is that when selecting friends from foes, the sovereign is better off disguising its naked will and political preferences as a national security consideration or a counter-terror measure. Picking on universities and civil society organizations was certainly a smart move: unlike churches the legal entity status of which is considered to be part and parcel of freedom of religion in international and European human rights law, the jurisprudence on academic freedom or the freedom of association is much less developed. As a result, the sovereign may have a broader margin of appreciation to discipline unwanted organizations even in the eyes of a well-meaning regional court.

Why should the EU care?

Recent developments in Hungary have grave relevance for the EU, symbolic and political, as well as constitutional.

It is true that the Hungarian-born U.S. financier and philanthropist George Soros has been the favorite villain of the Hungarian government for years, but he is not the only one. The EU comes as a close second. Civil society organizations partly funded by Mr Soros’ Open Society Foundations have received ample criticism as unpatriotic and destructive. The fact that the same NGOs would also accept funds in the EEA scheme (commonly known as Norwegian funds in Hungary) has singled them out for continued governmental harassment for years.

The draft NGO bill comes one step closer to vilifying EU money: when calculating the 7.2M HUF base-line, EU funding which is not distributed by Hungarian public institutions counts as funding of unknown origin. Thus, if an NGO receives funding from EU institutions directly, it is treated as potentially being under the influence of unknown foreign sources (draft NGO bill, Article 1(3)).

The symbolic and political relevance of recent Hungarian events was put succinctly by the German President Frank-Walter Steinmeier to the European Parliament on April 4, 2017:

“… if we want to be a lighthouse in the world for the rule of law and for human rights, then we cannot ignore, when these foundations are shaken in the midst of Europe. Europe, then, must not be silent, when civil society, even academia – as now at Central European University, Budapest – are deprived of the air to breathe.”

These are important words at a time when European political leaders are still indebted to the Hungarian Prime Minister for putting his weight behind Donald Tusk as the president of the European Council. Prime Minister Orbán, as a true European citizen, said that his priority was Europe’s operability, despite the Polish government’s disapproval. It is in this light that the leaders and the members of the European People’s Party (as well as their voters) may wish to consider President Steinmeier’s words.

On the constitutional level, one may see the awakening of the Hungarian sovereign as a testing of the limits of the European constitutional construct, using the leeway given to the member states to define and defend their national identities under TEU Article 4(2). Article 4(2) as part of the script on subsidiarity, a foundational premise of the EU. Foundational as it may be, it competes with forces which pull towards defining and defending a European constitutional core.

So far much ink has been spilled on reconciling national constitutional identity with the premises of the common European constitutional project. It is time to pay closer attention to the national security exception, which Article 4(2) makes the “sole responsibility” of the member states. If used lightly and carelessly, the national security exception can be a much stronger centrifugal force in Europe than cries of constitutional identity could ever be.

It is hardly by accident that these new Hungarian legal measures are phrased in terms of national security and courter-terrorism. They appeal to the constitutional exception in Article 4(2) as well as to the sentiments of those governments which have been targeted by terrorist attacks. Foreign observers and their governments will be sympathetic to such reasons in the age of global terror and will not be ready to suspect foul play when the sovereign speaks the language of the law. After all, many such observers live in countries where charities and private foundations are used by the supporters of global terrorism to channel funds. From there it may be hard to fathom that in other countries the unwanted foreign influence is the one which defends such ideals as the rule of law and fundamental rights from invasions by its very own government. Therefore, it is all the more important that European constitutional and political actors realize: The carefully crafted new Hungarian laws use the cloak of national security to stab the rule of law, as understood in Europe, in the heart.

(*) Renáta Uitz is professor of comparative constitutional law, chair of the Comparative Constitutional Law program and co-director (with Károly Bárd) of the clinical specialization at CEU Legal Studies. She obtained her Doctor iuris degree (with summa cum laude) at Eotvos Lorant University, Faculty of Law in 1996 and received an LLM in Comparative Constitutional Law at CEU Legal studies in the following year. Her S.J.D. (summa cum laude) in comparative constitutional law earned in 2001 is also from CEU Legal Studies. She started teaching at CEU in 2001, and became chair of the Comparative Constitutional Law program in 2007. Her teaching covers subjects in comparative constitutional law in Europe and North America, transitional justice and human rights protection with special emphasis on the enforcement of constitutional rights and on issues of bodily privacy and sexuality. Theories and practices of good governance in and after democratic transition, and the role of courts in constructing the constitutional subject are at the center of her research interests. “Constitutions, Courts and History” (2004) was her first book, while her most recent is “Freedom of Religion in European Constitutional and International Case Law” (2007). In addition she is the author of over 30 articles and book chapters which appeared mainly in English, Hungarian and Russian. She regularly speaks at international conferences on comparative constitutional subjects.

Guide to the Brexit Negotiations

ORIGINAL PUBLISHED ON EU LAW ANALYSIS

Professor Steve Peers

Last week the Brexit process formally got underway, as the UK formally sent the ‘Article 50’ withdrawal letter to the EU on March 29, and the EU in turn drew up a draft of its Brexit negotiating guidelines.

The following is a detailed annotation of the text of the EU’s draft guidelines, which I compare throughout to the UK position – which is most fully set out in Theresa May’s Chatham House speech in January (discussed here). The draft guidelines might be changed before final adoption (due for April 29), but at present it seems unlikely there will be radical changes (if any), so my analysis is based on the text as it now stands. I will update this blog post if there are significant amendments.

I also make reference to the draft position of the European Parliament (EP). This is less important than the draft EU position, since the European Parliament is not (even partly) the negotiator in the talks – no matter how much it might claim to be, or how much some in the UK media believe that it is.  However, the EP position is still worth considering because the EP has a veto over the final Article 50 deal, and this power could influence the actual negotiators’ position. (There’s a full discussion of the EP’s role here). My comments are both legal and political – although we should keep in mind that most legal analysis about Article 50 TEU (which sets out the process of leaving the EU) is purely speculative in the absence of any ECJ case law.

While the initial attention in the UK has focussed on a misunderstanding of what the draft EU guidelines say about Gibraltar, the most significant issue is actually that the EU and UK in principle have many negotiating objectives in common. Most notably, the EU has accepted the UK’s objective of aiming towards a comprehensive EU/UK free trade agreement (FTA) without provisions on the free movement of persons or contributions to the EU budget.

The devil will therefore be in the considerable details. For example, the EU and UK still disagree on the timing of Brexit talks, (possibly) the role of the ECJ, financial issues (the ‘divorce bill’), the Gibraltar issue (although this will be an issue for bilateral talks with Spain), whether the UK should comply with environmental and other standards as part of a deal, and whether ‘sectoral’ deals are possible. Further points of detailed disagreement will surely emerge as the talks get underway.

Is an EU/UK relationship based on a free trade deal the right way forward? Frankly, in my view, it’s not the first or even the second best option. But it is still a vastly better option than reversion to trade with the EU on a ‘WTO-only’ basis, as some are contemplating. This would lead to significant tariff and non-tariff barriers on many goods and services traded, and therefore hurt both sides.

There’s a democratic dimension to this too. Many of those voting ‘Leave’ were particularly concerned about EU budget contributions and the free movement of people, and an UK/EU FTA would resolve both concerns. But equally the ‘Leave’ side argued repeatedly that any concerns about a drop in UK trade with the EU were misplaced, because the UK and the EU would sign a free trade agreement without commitments relating to the free movement of persons or EU budget contributions.

They also claimed that such an agreement could be reached quickly and easily, on the UK’s terms. This was an obvious falsehood, as the EU’s draft negotiating guidelines have confirmed.  But rather than focus on this untruth, I believe we should move forward. It’s up to the government to move on with the negotiations, never forgetting that a reversion to a WTO-only trading relationship with the UK’s largest trading partner would both make a nonsense of the government’s aim of a free-trading ‘Global Britain’ and lack the slightest shred of democratic legitimacy. Moreover, it would damage both sides, and in particular put many people in the UK out of a job. These negotiations won’t be easy, but they are necessary. The time for fantasies, flag-waving and faffing about is over.

Annex I

On 29 March 2017, the European Council has received the notification by the United Kingdom of its intention to withdraw from the European Union and Euratom. This allows for the opening of negotiations as foreseen by the Treaty.

Note that the guidelines refer throughout to ‘negotiations’. Some have erroneously asserted that the EU will draft a text and present to the UK on a ‘take-it-or-leave-it’ basis. This is incorrect: Article 50(2) TEU refers several times to ‘negotiations’, and the draft guidelines reflect this.

The guidelines do not refer to any possible withdrawal of the UK notification, although the EP resolution (point L) assumes that a withdrawal of the notification is possible with consent. There is also an argument that the time period for withdrawal in Article 50 could be extended indefinitely. I will return to this issue another time.

Some have speculated that the EP might insist that the UK hold a referendum result on the outcome of the talks, as a condition for its consent to the deal. This would almost certainly backfire spectacularly, and in any event the draft EP resolution does not address this.

European integration has brought peace and prosperity to Europe and allowed for an unprecedented level and scope of cooperation on matters of common interest in a rapidly changing world. Therefore, the Union’s overall objective in these negotiations will be to preserve its interests, those of its Member States, its citizens and its businesses.

The United Kingdom’s decision to leave the Union creates significant uncertainties that have the potential to cause disruption, in particular in the UK but also in other Member States. Citizens who have built their lives on the basis of rights flowing from the British membership of the EU face the prospect of losing those rights. Businesses and other stakeholders will lose the predictability and certainty that come with EU law. With this in mind, we must proceed according to a phased approach giving priority to an orderly withdrawal.

The EU expressly asserts here its goal of an ‘orderly withdrawal’. Indeed Article 50(2) creates an obligation to negotiate with the withdrawing Member State (implicitly in good faith, as with any other negotiation under international law). Legally the wording of Article 50 equally suggests it aims to ensure an orderly withdrawal, and the ECJ is very likely to interpret it the same way. This necessarily implies that the EU cannot simply walk away from negotiations. However, in the event of a legal challenge it is unlikely (based on its prior case law on the EU’s international relations, which emphasises political discretion for the EU institutions) that the ECJ would rule that the general obligation to negotiate requires the EU to adopt (or refrain from adopting) specific negotiation objectives.

Politically this paragraph (and other similar references) confirms that the EU is aiming to reach a deal with the UK. So it would be false for anyone to assert that it is not.

In these negotiations the Union will act as one. It will be constructive throughout and will strive to find an agreement. This is in the best interest of both sides. The Union will work hard to achieve that outcome, but it will prepare itself to be able to handle the situation also if the negotiations were to fail.

The first sentence confirms that the EU will negotiate as a bloc, as Article 50 provides for (‘the Union shall negotiate and conclude an agreement with that State’). This does not preclude informal bilateral talks between the UK and key Member States’ governments, which is common when the EU discusses trade deals with non-EU states.

The overall tone here is diplomatic and asserts an intention to reach a deal, although the final sentence also asserts that the EU will prepare itself for a ‘no deal’ scenario as an alternative. This would likely entail getting draft EU laws ready for approval and gearing up national customs administrations et al for a UK departure presumably in one of two scenarios: a) on the date set out pursuant to Article 50; b) if the UK purports to leave the EU in breach of the terms of Article 50. In the latter scenario the EU Member States might not wait for the end of the Article 50 period, but declare that the UK has committed a material breach of the EU Treaties within the meaning of Article 60 of the Vienna Convention on the Law of Treaties, and suspend the UK from the Treaties.

The guidelines make no mention of amending the Treaties to remove reference to the UK, but one would not expect them to, since logically that is not an issue which the EU would negotiate with the UK.  It is not yet clear whether the EU will embark upon such a course; legally it might be argued that Article 50 is ‘self-executing’ in the sense that references to the UK automatically become legally irrelevant on Brexit Day. One issue might be whether other changes to the Treaties might be made at the same time; if so, this would become difficult to negotiate. Even a purely technical Treaty amendment which only removes references to the UK would take some time to ratify, so one would expect work to get underway soon, if it is going to happen – although there could be a legal problem in that in principle the UK ought to participate in the Treaty amendment process as long as it is a member. One solution might be to draw up such a treaty after Brexit Day, and backdate its application date.

Paras 30 and 32 of the draft EP resolution refer to possible changes to EU law as a result of the UK’s departure as an issue for the EU-27, although they make no specific reference to Treaty amendment.

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 negotiation. The European Council will remain permanently seized of the matter, and will update these guidelines in the course of the negotiations as necessary.

Article 50(2) states that the negotiation must take place ‘in light of’ these guidelines. It is unclear precisely what legal effect this has. For instance, could an outvoted Member State challenge the Article 50 deal for breaching the guidelines? As it happens, there is a pending ECJ case which raises (among other things) the legal effect of European Council guidelines in the asylum context, discussed here.

The predominant effect of the guidelines will of course be political; note that the European Council is prepared to ‘update’ them (ie amend or elaborate upon them further). They will necessarily be fleshed out in detail in a rather longer treaty text, on the basis of drafts tabled and negotiated by each side.

  1. Core principles
  1. The European Council will continue to base itself on the principles set out in the statement of Heads of State or Government and of the Presidents of the European Council and the European Commission on 29 June 2016. It reiterates its wish to have the United Kingdom as a close partner in the future. It further reiterates that any agreement with the United Kingdom will have to be based on a balance of rights and obligations, and ensure a level-playing field. Preserving the integrity of the Single Market excludes participation based on a sector-by-sector approach. 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. In this context, the European Council welcomes the recognition by the British Government that the four freedoms of the Single Market are indivisible and that there can be no “cherry picking”.

The June 2016 statement can be found here. The second sentence matches the UK government’s objective of a future close partnership. Any ‘sectoral’ deals are excluded; this contradicts the UK government position, which had the objective of obtaining such deals. In any event sectoral deals would be potentially vulnerable to challenge under WTO rules, which require any free trade agreement to cover ‘substantially’ all trade in goods (Article XXIV GATT) or services (Article V GATS). It would however be possible for mutual recognition agreements to cover certain sectors of trade. There is no reference in the guidelines to the UK government’s objective to achieve some form of special customs agreement, except implicitly as regards Northern Ireland.

  1. Negotiations under Article 50 TEU will be conducted as a single package. In accordance with the principle that nothing is agreed until everything is agreed, individual items cannot be settled separately. The Union will approach the negotiations with unified positions, and will engage with the United Kingdom exclusively through the channels set out in these guidelines and in the negotiating directives. So as not to undercut the position of the Union, there will be no separate negotiations between individual Member States and the United Kingdom on matters pertaining to the withdrawal of the United Kingdom from the Union.

It’s not clear whether the ‘single package’ refers more narrowly to the specific issues which the EU wants to negotiate first, or the talks on later status of UK/EU relations. This is important because there is a strong case for concluding a first treaty on withdrawal issues, including in particular the status of UK and EU citizens who have moved between Member States, separately from any subsequent treaties.

This paragraph reconfirms the ‘no separate negotiations’ point already made in the guidelines. As noted above, this does not prevent some informal bilateral discussions on specific issues. For instance, UK/Ireland discussions on border issues could be significant, and the guidelines in effect require separate talks between the UK and Spain regarding Gibraltar. They also refer to bilateral UK/Cyprus issues.

Article 50 refers to the EU acting by qualified majority vote (without the UK voting), so the common assumption that any Article 50 deal must be agreed unanimously and ratified by all national parliaments is incorrect. However, some aspects of the overall Brexit deal (ie on future relationship) might entail unanimous voting and national ratification; and the EU might be unwilling to proceed with the Article 50 deal against the opposition of one or more Member States.

  1. A phased approach to negotiations
  1. On the date of withdrawal, the Treaties will cease to apply to the United Kingdom, to those of its overseas countries and territories currently associated to the Union, and to territories for whose external relations the United Kingdom is responsible. The main purpose of the negotiations will be to ensure the United Kingdom’s orderly withdrawal so as to reduce uncertainty and, to the extent possible, minimise disruption caused by this abrupt change.

This refers to the entities referred to in Article 353 TFEU, ie Gibraltar, the Channel Islands, the Isle of Man, and some small remaining semi-colonies. For a discussion of their status, see this House of Lords report. The reference to minimising disruption is important, although qualified (‘to the extent possible’).

To that effect, the first phase of negotiations will aim to:

settle the disentanglement of the United Kingdom from the Union and from all the rights and obligations the United Kingdom derives from commitments undertaken as Member State;

provide as much clarity and legal certainty as possible to citizens, businesses, stakeholders and international partners on the immediate effects of the United Kingdom’s withdrawal from the Union.

The European Council will monitor progress closely and determine when sufficient progress has been achieved to allow negotiations to proceed to the next phase.

This asserts the EU’s determination to discuss withdrawal issues before trade issues, whereas the UK has wanted to discuss them in tandem. However, the EU guidelines do not require the withdrawal issues to be fully agreed before talks on post-Brexit issues get underway. The ‘sufficient progress’ test is deliberately flexible; it can be argued that agreement in principle on the main issues will be sufficient, even if some details have to be worked out.  Para 14 of the EP draft resolution largely matches this, although the EP will not have any formal role in determining whether ‘substantial progress’ (the slightly stricter test which the EP proposes) has been met.

  1. While an agreement on a future relationship between the Union and the United Kingdom as such can only be concluded once the United Kingdom has become a third country, Article 50 TEU requires to take account of the framework for its future relationship with the Union in the arrangements for withdrawal. To this end, an overall understanding on the framework for the future relationship could be identified during a second phase of the negotiations under Article 50. The Union and its Member States stand ready to engage in preliminary and preparatory discussions to this end in the context of negotiations under Article 50 TEU, as soon as sufficient progress has been made in the first phase towards reaching a satisfactory agreement on the arrangements for an orderly withdrawal.

The EP draft resolution (point 15) also rules out conclusion of a ‘future relationship’ treaty before Brexit, so it seems unlikely to happen.

This discussion of a ‘future relationship’ between the UK and the EU (concerning trade and other issues) is separate from a possible ‘transitional arrangement’ referred to in the next paragraph (‘may also’). So it is unclear whether a transitional deal could also only be concluded after the UK leaves.

In any event, it is arguable that a longer-term deal could be concluded (or at least signed and applied provisionally) on the date of withdrawal, or failing that, it could be backdated to that date. Such an approach would be consistent with the EU’s objectives of an orderly withdrawal and minimising disruption. However, the references to ‘preliminary and preparatory’ and ‘overall understanding’ seem to rule that out.

In any event, it would be hard in practical terms to negotiate all the details of the long-term framework within the time available, even though this is Theresa May’s objective. This is particularly true given that some of the available time will be taken up negotiating withdrawal issues before moving on to the ‘future relationship’ talks.

  1. To the extent necessary and legally possible, the negotiations may also seek to determine transitional arrangements which are in the interest of the Union and, as appropriate, to provide for bridges towards the foreseeable framework for the future relationship. Any such transitional arrangements must be clearly defined, limited in time, and subject to effective enforcement mechanisms. Should a time-limited prolongation of Union acquis be considered, this would require existing Union regulatory, budgetary, supervisory and enforcement instruments and structures to apply.

It is certainly in the EU’s interest to maintain trade flows and other relationships with the UK, and as noted above this would be consistent with the EU’s objectives of an orderly withdrawal and minimising disruption. They would obviously be ‘necessary’ to the end of avoiding a switch to a WTO-only framework for trade between the UK and the EU. Again as noted already, this paragraph is unclear about when a transitional deal might be concluded, although as compared to the previous paragraph it does not explicitly state that talks could not be completed or that an agreement could not be concluded before Brexit Day. It is also vague about the relevant legal base: is it Article 50 (qualified majority vote) or other Treaty provisions (more likely to entail unanimity and national ratification)? The exact scope of Article 50 is unclear legally; the wording here suggests some uncertainty about what is ‘legally possible’, which it may be necessary to ask the ECJ to clarify (see Annex II).

The transitional deal would have to be limited in time, which could reassure those who do not want the UK to remain in such an arrangement indefinitely. It is not expressly clear that all aspects of EU membership would be carried over. In particular, it is not clear that the only transition which the EU would consider would be continuing in force the EU acquis. The distinction is important because a) flexibility on this issue could involve ending the free movement of people, or continuing it with an ‘emergency brake’, from Brexit Day; and b) an ‘enforcement mechanism’ might fall short of continuing EU ‘existing regulatory, budgetary, supervisory and enforcement’ measures. The latter phrase would logically entail keeping in force the ECJ’s current jurisdiction, while a mere ‘enforcement mechanism’ could entail a more limited role for the ECJ (no references from UK courts or direct impact on UK law) or a different dispute mechanism system entirely, such as using the EFTA Court which already exists and rules on certain EU law issues as regards Norway, Iceland and Liechtenstein. However, the more different a transitional system would be from current EU membership, the longer it would take to negotiate, and the bigger the risk of running out of time.

The UK government’s position seems to contemplate some form of interim transitional period, without calling it such. The Chatham House speech refers instead to ‘phased implementation’, during which aspects of EU law will still apply. But despite the difference in wording, fundamentally there are strong similarities between the UK and EU positions here.

The EP draft resolution is similar (para 28). It sets a maximum time limit of three years for the transitional deal, although otherwise it is as vague as the European Council draft guidelines.

  1. The core principles set out above should apply equally to the negotiations on an orderly withdrawal, to any preliminary and preparatory discussions on the framework for a future relationship, and to any form of transitional arrangements.
  1. The two year timeframe set out in Article 50 TEU ends on 29 March 2019.

It should be noted that Article 50(3) provides that the withdrawal agreement may set a different date (which could implicitly be later or earlier), and that the UK and the remaining EU, voting unanimously, may postpone the overall deadline.

III. Agreement on arrangements for an orderly withdrawal

  1. The right for every EU citizen, and of his or her family members, to live, to work or to study in any EU Member State is a fundamental aspect of the European Union. Along with other rights provided under EU law, it has shaped the lives and choices of millions of people. Agreeing reciprocal guarantees to settle the status and situations at the date of withdrawal of EU and UK citizens, and their families, affected by the United Kingdom’s withdrawal from the Union will be a matter of priority for the negotiations. Such guarantees must be enforceable and non-discriminatory.

The EU, like the UK, places priority on an early deal on the rights of each other’s citizens. While some had claimed that the EU could not or would not address this issue in the Article 50 talks, it clearly intends to do so. The reference to ‘non-discriminatory’ arrangements confirms that there will not be bilateral talks on this issue, as some people had expected. While some have claimed that the EU lacks legal power to regulate the position of non-EU citizens, Articles 77-79 TFEU confer such powers and the EU has adopted a number of laws in this area. In any event, it is strongly arguable that Article 50 confers power upon the EU to negotiate any issue which arose pursuant to the withdrawing Member State’s membership of the European Union, and the status of UK and EU citizens is one obvious example of such an issue.

The reference to an ‘enforceable’ guarantee does not necessarily entail using the ECJ. There could be some other form of dispute settlement, or a commitment to make the agreement binding in national law and to hold discussions about any issues which arise might suffice.

It should be noted that the guidelines make no reference to the idea, promoted by some in the EP, of an optional right for UK citizens to retain EU citizenship. The EP draft resolution does refer to this issue, but states that such arrangements should be reciprocal (para 27). It is hard to imagine the UK government agreeing to such a deal.

  1. Also, the United Kingdom leaving the Union will impact EU businesses trading with and operating in the United Kingdom and UK businesses trading with and operating in the Union. Similarly, it may affect those who have entered into contracts and business arrangements or take part in EU-funded programmes based on the assumption of continued British EU membership. Negotiations should seek to prevent a legal vacuum once the Treaties cease to apply to the United Kingdom and, to the extent possible, address uncertainties.

This indicates a general intention to retain contracts and legal arrangements in force, if they have been concluded before Brexit Day. This could be relevant to research funding, regional funding or farm subsidies, for instance. It could also be the basis for arguing that UK banks who already have a licence to sell financial services to the EU market can retain it.

  1. A single financial settlement should ensure that the Union and the United Kingdom both respect the obligations undertaken before the date of withdrawal. The settlement should cover all legal and budgetary commitments as well as liabilities, including contingent liabilities.

This is likely to be one of the most difficult issues to negotiate. The draft guidelines do not put a specific figure on the ‘bill’, although press reports note amounts such as €50 billion. There is no reason why the amount of any bill should be paid upfront, as some of it relates to funding over the next few years and to pensions payable over the longer term. For detailed discussions of this issue see this House of Lords report and this Brueghel report.

  1. The Union has consistently supported the goal of peace and reconciliation enshrined in the Good Friday Agreement, and continuing to support and protect the achievements, benefits and commitments of the Peace Process will remain of paramount importance. In view of the unique circumstances on the island of Ireland, flexible and imaginative solutions will be required, including with the aim of avoiding a hard border, while respecting the integrity of the Union legal order. In this context, the Union should also recognise existing bilateral agreements and arrangements between the United Kingdom and Ireland which are compatible with EU law.

The EU and UK both make a priority of addressing the border issue between Ireland and Northern Ireland. (It should be noted that there is no specific reference to Scotland in the EU guidelines; the EP resolution merely notes that Scotland voted to Remain). There are indications of great willingness to compromise here (‘flexible and imaginative solutions’) and it should be noted that Protocols to the Treaties require the EU to facilitate the operation of the Common Travel Area between the UK and Ireland (the words ‘should also recognise’ these arrangements do not adequately take account of this legal obligation). However, the Protocols do not lay down in detail what happens in the event of UK withdrawal, which therefore has to be the subject of negotiations. Equally, arguments about the history of the UK and Ireland are irrelevant, as there has never been a previous situation when one of those countries was in the EEC/EC/EU and the other was not.

  1. The Union should agree with the United Kingdom on arrangements as regards the Sovereign Base Areas of the United Kingdom in Cyprus and recognise in that respect bilateral agreements and arrangements between the Republic of Cyprus and the United Kingdom which are compatible with EU law, in particular as regards the situation of those EU citizens resident or working in the Sovereign Base Areas.

There is a specific Protocol to the 2003 Accession Treaty on the position of the UK sovereign base in Cyprus, which will presumably have to be amended in order to take account of any such agreement. Here, despite the overall EU-wide approach to talks, there is recognition that there will be a bilateral agreement between the UK and Cyprus alongside an EU-UK agreement.

  1. Following the withdrawal, the Union with 27 Member States will continue to have the rights and obligations of the Union with 28 Member States in relation to international agreements. The United Kingdom will no longer be covered by agreements concluded by the Union or by Member States acting on its behalf or by both acting jointly. The European Council expects the United Kingdom to honour its share of international commitments contracted in the context of its EU membership. In such instances, a constructive dialogue with the United Kingdom on a possible common approach towards third country partners and international organisations concerned should be engaged.

The EU position is that the UK ceases to be part of any treaty with non-EU countries within the scope of EU law – whether concluded by the EU alone, by the Member States alone (but affecting EU law) or by both together. This is particularly relevant to trade agreements (see discussion by Markus Gehring here) but affects other agreements as well (for example, environmental deals).

The UK will likely seek to secure replacement agreements with the countries concerned. This is even encouraged by the EU, which seeks a ‘constructive dialogue’ on these issues. The reference to ‘international organisations’ most obviously refers to the WTO.

In practical terms, the issue which particularly arises is ‘tariff rate quotas’, ie allowing in a certain amount of products at a low tariff. Say the EU allows 100,000 tons of olives imported from Morocco at a low tariff: the obvious solution is to split that between the UK and the remaining EU based on recent trade flows (ie how much of those olives were imported into the UK in the last three years, as compared to the rest of the EU?).

Non-EU countries will obviously have to agree to this process, and the UK might want to focus particularly on replicating those agreements with a major impact on UK exports: for instance, the EU agreements on the protection of the name ‘Scotch Whisky’.

  1. While the future location of the seats of EU agencies and facilities located in the United Kingdom is a matter for the 27 Member States, arrangements should be found to facilitate their transfer.

The intention is obviously to move these bodies as soon as possible after Brexit Day, if not before. The UK will not be involved in decisions on where they move to, but will be involved in the logistics of moving them.

  1. Arrangements ensuring legal certainty and equal treatment should be found for all court procedures pending before the Court of Justice of the European Union upon the date of withdrawal that involve the United Kingdom or natural or legal persons in the United Kingdom. The Court of Justice of the European Union should remain competent to adjudicate in these procedures. Similarly, arrangements should be found for administrative procedures pending before the European Commission and Union agencies upon the date of the withdrawal that involve the United Kingdom or natural or legal persons in the United Kingdom. In addition, arrangements should be foreseen for the possibility of administrative or court proceedings to be initiated post-exit for facts that have occurred before the withdrawal date.

The EU assumes that EU court cases pending on Brexit Day should remain within the competence of the Court to decide. This is a classic transitional issue and the EU suggestion makes sense, since the cases concern the pre-Brexit legal position. (Compare to the planned Great Repeal Bill, which will provide that pre-Brexit ECJ case law will still be binding). It is slightly more ambiguous as regards pending administrative procedures like competition law and state aid (‘arrangements should be found’). The same applies to cases with EU law issues pending in the UK courts on Brexit Day, or which are brought in the UK courts in summer 2019 relating to a 2018 tax bill, for instance.

This paragraph is too limited, as the transitional deal needs to take explicit account of all legal proceedings pending on Brexit Day pursuant to EU law, not just those which involve or may involve the EU institutions: for instance a pending claim to recognise a German court judgment in the UK, or the French authorities’ obligation to execute a European Arrest Warrant issued by the UK before that date. Most implementation of EU law is carried out by national courts and administrations, not EU bodies, and the transitional rules should take account of this.

  1. The withdrawal agreement should include appropriate dispute settlement mechanisms regarding the application and interpretation of the withdrawal agreement, as well as duly circumscribed institutional arrangements allowing for the adoption of measures necessary to deal with situations not foreseen in the withdrawal agreement. This should be done bearing in mind the Union’s interest to effectively protect its autonomy and its legal order, including the role of the Court of Justice of the European Union.

The institutional arrangements will presumably entail an EU/UK Joint Committee with the power to take decisions by joint agreement. There are similar bodies in other EU treaties with non-EU states. The first and third sentences, read together, do not explicitly insist that the ECJ have jurisdiction over the withdrawal agreement (although it will inevitably have jurisdiction as regards the EU side). The reference to ensuring EU autonomy reflects ECJ case law which states that treaties with non-EU countries cannot affect the separate development of EU law or the essential features of the Court’s powers: see Opinion 1/91 and Opinion 1/00. Compare with point 17 of the EP resolution, which explicitly calls for the ECJ to have jurisdiction over the withdrawal agreement.

  1. Preliminary and preparatory discussions on a framework for the Union – United Kingdom future relationship
  1. The European Council welcomes and shares the United Kingdom’s desire to establish a close partnership between the Union and the United Kingdom after its departure. While a relationship between the Union and a non Member State cannot offer the same benefits as Union membership, strong and constructive ties will remain in both sides’ interest and should encompass more than just trade.

The EU accepts in general the UK position of having a close partnership, including but going beyond trade. There is no explicit reference to the form of the relationship, which is relevant given that it could affect whether the EU side has to vote unanimously and ask national parliaments to ratify any treaty. (EU treaties with non-EU states can be partly applied provisionally pending such ratification).Point 22 of the EP draft resolution hints at a possible association agreement: this entails unanimous voting and usually also national ratification.

  1. The British government has indicated that it will not seek to remain in the single market, but would like to pursue an ambitious free trade agreement with the European Union. Based on the Union’s interests, the European Council stands ready to initiate work towards such an agreement, to be finalised and concluded once the United Kingdom is no longer a Member State.

The EU accepts the UK position of seeking a far-reaching free trade deal, rather than continued single market participation. Note that there is no reference to continuing with the free movement of persons or contributions to the EU budget – two key objectives of the UK side. The timing is an issue, as noted already: no finalisation or conclusion until after Brexit Day, which means that a transitional deal will be important in the meantime. Although in theory this could be on or soon after Brexit Day, there is unlikely to be enough time for that.

  1. Any free trade agreement should be balanced, ambitious and wide-ranging. It cannot, however, amount to participation in the Single Market or parts thereof, as this would undermine its integrity and proper functioning. It must ensure a level playing field in terms of competition and state aid, and must encompass safeguards against unfair competitive advantages through, inter alia, fiscal, social and environmental dumping.

It is common for EU trade agreements to make some reference to state aid and competition law, although only some of them require the non-EU state to apply EU competition and state aid law as such. The guidelines leave it open as to what exactly the EU side will aim for. In any event WTO rules also contain some restrictions on granting subsidies and set out the possibility for trading partners to retaliate if subsidies are granted, although these rules are less far-reaching and enforceable than those applying to EU Member States. (Note that the EU does not ban state aids entirely, but restricts them to certain cases).

The ‘safeguards against unfair competitive advantages’ the EU side wants refers to – among other things – ‘fiscal, social and environmental dumping’. This does not explicitly refer to the adoption of EU law by the UK, and in any event there is no EU law on minimum corporate tax rates. (Compare to para 24 of the EP resolution, which refers more explicitly to EU laws, although to ‘tax evasion and avoidance’ as distinct from tax rates). The UK might argue that it would be sufficient to remain party to international treaties on environmental law and social protection (in the ILO, the Council of Europe and the UN Covenant on Economic, Social and Cultural Rights), and to hold regular discussions on corporate tax rates – which could cut both ways. In any event, many in the UK would welcome safeguards against cuts in environmental and social standards, and would be concerned about how public services could be funded in the event of large cuts in corporate tax.

It remains to be seen what exactly the EU side would accept as safeguards, but the EU’s position should be seen in its overall context: as noted already, the EU is not insisting on free movement of people or financial contributions. It is striking that the EU side makes no explicit references to services, where the UK has a trade surplus. If the UK wants to maintain that strong surplus by having an advanced trade relationship that offers more free trade in services than the EU usually agrees (but still falling short of single market participation) this is the condition which the EU wants to set.

  1. Beyond trade, the EU stands ready to consider establishing a partnership in other areas, in particular the fight against terrorism and international crime as well as security and defence.

This matches the UK’s position. Neither side sets out any real details here.

  1. The future partnership must include appropriate enforcement and dispute settlement mechanisms that do not affect the Union’s autonomy, in particular its decision-making procedures.

There is no specific mention of the ECJ here, and the autonomy issue was discussed above. It’s not usual for the Court to have jurisdiction as regards non-EU states, bar a few exceptions like the European Aviation Area treaty, which facilitates aviation between EU and other European countries. But it is common for the EU to agree dispute settlement similar to the WTO dispute settlement system in agreements with non-EU countries. Interestingly, the EU does not use such systems in its trade agreements in practice, although it does often use the WTO.

In short, the WTO system provides for panels of experts to decide on whether there is a breach of WTO law; their decisions can be appealed to an Appellate Body. If a WTO party which was found to have breached WTO law does not comply with these rulings, the victorious party which brought the complaint can be authorised to retaliate against it with proportionate trade sanctions. Dispute settlement bodies are not unique to the EU and WTO – there is an active system in the NAFTA agreement between the US, Canada and Mexico, for instance. Such systems fall short of the legal effect of EU law in national legal systems, but still place some constraints upon the parties to trade treaties.

  1. After the United Kingdom leaves the Union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom.

This clause has attracted much overreaction. It is not a claim to Gibraltar territory or joint sovereignty, so there is no need to respond to it with talk of military action. It merely acknowledges that the EU will not apply post-Brexit treaties to the UK unless the UK and Spain have separately agreed to this. It will be up to the UK and Spain to find agreement for each treaty, or failing that to accept that the treaty in question will either not be concluded or not apply to Gibraltar.

  1. Principle of sincere cooperation
  1. Until it leaves the Union, the United Kingdom remains a full Member of the European Union, subject to all rights and obligations set out in the Treaties and under EU law, including the principle of sincere cooperation.

This reflects the UK’s continued position that it will apply EU law until Brexit Day. Point 5 of the EP draft resolution matches it.

  1. The European Council recognises the need, in the international context, to take into account the specificities of the United Kingdom as a withdrawing Member State, provided it remains loyal to the Union’s interests while still a Member. Similarly the Union expects the United Kingdom to recognise the need of the 27 Member States to meet and discuss matters related to the situation after the withdrawal of the United Kingdom.

The first sentence is ambiguous about a key issue: can the UK already discuss trade deals with non-EU countries? It can’t conclude them without violating EU law (para 23); normally it could not negotiate them either, but does this sentence accept the argument that discussions on a post-Brexit deal would be acceptable, as a consequence of the UK’s position as a withdrawing Member State? The second sentence asserts the remaining EU’s right to meet without the UK, presumably going beyond the talks relating to Brexit without the UK present as referred to in Article 50. However, such meetings must remain informal, as the next paragraph confirms.  

Compare to point 6 of the draft EP resolution, which more explicitly argues that the UK cannot negotiate with non-EU countries before Brexit, and argues that the UK should be excluded from EU trade talks with non-EU countries if it does. Such an exclusion would not be legal; the remedy in such cases of alleged breach of EU law is for the Commission or another Member State to bring the UK to the ECJ.  

  1. While the United Kingdom is still a member, all ongoing EU business must continue to proceed as smoothly as possible at 28. The European Council remains committed to drive forward with ambition the priorities the Union has set itself. Negotiations with the United Kingdom will be kept separate from ongoing Union business, and shall not interfere with its progress.

The UK retains its formal position as a Member State until Brexit Day, although obviously it will have declining influence as there will be little interest in addressing its concerns and the other Member States merely have to wait out any veto or participation in a blocking minority vote by the UK.

  1. Procedural arrangements for negotiations under Article 50

The European Council endorses the arrangements set out in the statement of 27 Heads of State or Government on 15 December 2016.

These procedural arrangements are discussed in the next annex.

Annex II – Procedural rules

Here are the December 2016 procedural rules, with annotations.

  1. The first step following the notification by the United Kingdom will be the adoption by the European Council of guidelines that will define the framework for negotiations under Article 50 TEU and set out the overall positions and principles that the EU will pursue throughout the negotiation. The European Council will remain permanently seized of the matter, and will update these guidelines in the course of the negotiations as necessary.

This refers to the guidelines of the European Council (the Member States’ Heads of State and Government), the draft of which is now available and was discussed above. Article 50 requires the guidelines to be adopted at the start of the process.

  1. After the adoption of the guidelines, the European Council will invite the General Affairs Council to proceed swiftly with the adoption of the decision authorising the opening of the negotiations, following a recommendation by the European Commission, and to deal with the subsequent steps in the process. The Council will also adopt negotiating directives on substance as well as on the detailed arrangements governing the relationship between the Council and its preparatory bodies on the one hand and the Union negotiator on the other. These negotiating directives may be amended and supplemented as necessary throughout the negotiations, to reflect the European Council guidelines as they evolve.

This follows the normal process of EU treaty negotiation with non-EU countries, as set out in Article 218 TFEU: a Commission recommendation to start talks, and a Council mandate with detailed negotiation objectives, which may be amendment throughout the talks. That mandate will likely be more detailed than these guidelines. The General Affairs Council is made up of Member States’ foreign or Europe ministers, and meets monthly. The Council’s ‘preparatory bodies’ consist of working groups and Member States’ permanent representatives (the latter meets weekly, and is known as ‘Coreper’).

  1. The Council will be invited to nominate the European Commission as the Union negotiator. The Commission’s nomination of Michel Barnier as chief negotiator is welcome. To ensure transparency and build trust, the Union negotiator’s team will be ready to integrate a representative of the rotating Presidency of the Council. Representatives of the President of the European Council will be present and participate, in a supporting role, in all negotiation sessions, alongside the European Commission representatives. The Union negotiator will systematically report to the European Council, the Council and its preparatory bodies.

Article 50 leaves open who the negotiators will be, and some had assumed it would be the Council. Nominating the Commission follows the usual approach under Article 218 TFEU. However, including a representative of the Council Presidency (which rotates every six months) and the European Council President (Donald Tusk) in the talks is an innovation, which reflects their importance. The obligation to report back to EU bodies reflects Article 218 TFEU.

  1. Between the meetings of the European Council, the Council and Coreper, assisted by a dedicated Working Party with a permanent chair, will ensure that the negotiations are conducted in line with the European Council guidelines and the Council negotiating directives, and provide guidance to the Union negotiator.

Article 218 TFEU (and Article 207 TFEU, regarding trade) refer to Council working parties supervising Commission negotiators, so this is nothing new. As regards trade, the Commission refers to the committee which supervises it as the ‘mothers-in-law’ (don’t shoot the messenger!).

  1. The members of the European Council, the Council and its preparatory bodies representing the United Kingdom will not participate in the discussions or in the decisions concerning it.

This simply respects the wording of Article 50, extended (logically enough) to the Council’s working parties, not just to the official meetings of ministers or heads of state.

  1. Representatives of the 27 Heads of State or Government (Sherpas/Permanent Representatives) will be involved in the preparation of the European Council as necessary. Representatives of the European Parliament will be invited at such preparatory meetings.

This gives a slightly greater role than usual to the European Parliament.

  1. The Union negotiator will be invited to keep the European Parliament closely and regularly informed throughout the negotiation. The Presidency of the Council will be prepared to inform and exchange views with the European Parliament before and after each meeting of the General Affairs Council. The President of the European Parliament will be invited to be heard at the beginning of meetings of the European Council.

The first sentence reflects Article 218 TFEU, which calls for the EP to be fully and immediately informed throughout negotiations. The second and third sentences go into more detail, and give a bigger role to the EP than usual during EU talks with non-EU countries. As noted already, however, the EP is not a negotiator as such, although its power to give its consent to the final deal (not referred to explicitly here) nevertheless means it is a significant actor. The additional meetings referred to here will be a forum for the EP to influence the negotiations.

There is no reference to the ECJ, which can rule on legal issues concerning draft treaties with non-EU countries pursuant to Article 218 TFEU, at the request of the Commission, Council, EP or a Member State. It is not clear whether the whole of Article 218 necessarily applies to the Brexit treaty process, since Article 50 only refers to some of it. There are also other ways that Brexit legal questions can reach the ECJ: national courts can ask the Court about them, the Commission can sue a Member State (or Member States can sue each other), or Member States or the EU institutions can sue the [other] EU institutions for various aspects of their conduct of the negotiation.

“IN LIGHT OF THE GUIDELINES”: BREXIT AND THE EUROPEAN COUNCIL REVISITED

ORIGINAL PUBLISHED ON EUROPEAN LAW BLOG ON APRIL 4, 2017
By Darren Harvey

 

Introduction

Following the delivery by Sir Tim Barrow of a letter to European Council President Donald Tusk notifying the European Council of the United Kingdom’s intention to withdraw from the EU, the two-year time period within which the UK and EU shall negotiate and conclude a withdrawal agreement has commenced.

According to Article 50(2) TEU, the first step in this process is for the European Council to agree upon a set of guidelines defining the framework for the EU side of the negotiations. A first draft of these guidelines was circulated by European Council President Donald Tusk on Friday 31st March 2017.

The purpose of this post is to follow up from a post written last October on the role of the European Council and the Brexit process.

Amending the Guidelines

As was noted in the previous post, Article 50(2) TEU clearly stipulates that in the absence of guidelines from the European Council, the negotiations between the UK and the EU cannot proceed. It is worth emphasizing from the outset that the draft guidelines shall not be formally adopted by the European Council until it meets on 29th April 2017. One must bear in mind the possibility, therefore, that yesterday’s document may be subject to amendment prior to the adoption of a final version later this month.

What is more, according to the introductory remarks, the European Council may update or amend the guidelines as it sees fit throughout the course of the negotiations. It is unclear whether Article 50(2) TEU gives the power to the European Council to unilaterally amend the guidelines as and when it wishes.

On one interpretation, “in light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement” could allow for a continuous process of revision throughout the process of negotiation and conclusion of the withdrawal agreement. This still leaves open the question of whether the European Council is free to alter the guidelines unilaterally or may only do so upon request from another interested party e.g. the Commission.

The next step in the Article 50 TEU process may be instructive here. Following adoption of guidelines in the European Council, the Commission will then issue a series of recommendations to the Council concerning the finer details of its negotiating mandate and further institutional arrangements. We will therefore have guidelines from the European Council and we will have a more detailed negotiating mandate suggested by the Commission and adopted by the Council. As Dr Camilla Macdonald has recently pointed out, the Commission, in issuing its recommendations to the Council, will be utilizing its technical, legal and policy expertise to fill in all the missing details from the European Council’s guidelines, including firm recommendations on each area under negotiation.

An example of how these Council guidelines may be amended throughout the negotiation process is provided by the EU-Canada Comprehensive and Economic Trade Agreement (CETA), in which the original 2009 guidelines were amended in 2011 by the Council following a recommendation to modify the negotiating directives from the Commission.  It remains to be seen, therefore, whether the European Council will be free to unilaterally update its guidelines throughout the negotiations, particularly when one considers that the Council’s negotiating directives are likely to flesh out the details of those guidelines. Based solely upon the wording of the European Council’s draft last week, it certainly seems to be the case that the heads of state and government of the 27 Member States reserve the right to alter their guidelines as and when they deem it appropriate to do so.

The Scope and Content of the Guidelines

Turning to the guidelines themselves, they address in general terms the basic principles underlying the EU’s negotiating position such as acting with one voice, mitigating uncertainty for citizens and businesses, adhering to the principle of sincere cooperation and ensuring the integrity of the internal market.

In addition, they also address, with varying degrees of detail, all of the following issues: the order in which negotiations on withdrawal and any agreement detailing future UK-EU relations will be negotiated; transitional arrangements; reciprocal guarantees for UK and EU citizens; preventing a legal vacuum liable to disrupt business upon withdrawal; a single financial settlement for legal and budgetary commitments as well as liabilities; the aim of avoiding a hard border on the island of Ireland; the status of the UK’s Sovereign Base Areas in Cyprus; international agreements concluded by the EU during the UK’s membership; the transfer of the seats of EU agencies; cases pending before the Court of Justice and administrative proceedings before the European Commission and EU agencies on the date of withdrawal EU; dispute settlement mechanisms for both the interpretation and application of the withdrawal agreement and any future agreement; institutional arrangements allowing for the adoption of measures to deal with situations arising under the withdrawal agreement; the need to prevent a race to the bottom on fiscal, environmental and employment regulation; Gibraltar and the keeping of ordinary EU business separate from the withdrawal negotiations over the coming two years.

Constraints of space preclude an examination of all these issues in the current post, which is intended only as a first reaction to what I consider to be some of the more intriguing or controversial points raised by the guidelines. The following shall therefore discuss some of the more procedural and institutional aspects of the guidelines, whilst leaving much of the points relating to the substance of any future agreement(s) such as safeguards against fiscal, social and environmental dumping for another time.

How many agreements?

There has been much discussion in recent months on whether the UK’s withdrawal from the EU will require the negotiation and conclusion of one, two or three separate agreements. The uncertainty here stems in large part from the wording of Article 50(2) TEU, which provides that the EU shall negotiate and conclude an agreement with a withdrawing state “setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.”  The general consensus seemed to be that that there would need to be at least two separate agreements: one to deal with the UK’s withdrawal and another providing for any future trading relationship between the two parties. It was also generally accepted that it would be possible to have some form of transitional agreement so as to prevent all of the UK’s rights and obligations coming to an abrupt end before any agreement covering future UK-EU relations could be agreed.

The draft guidelines have clarified matters to a certain extent here. As they make clear at point 3 under the heading “A Phased Approach to Negotiations”, the negotiations are envisaged as proceeding in two phases.

The first phase shall involve the disentanglement of the UK from the EU and from all the rights and obligations that the United Kingdom derives from commitments undertaken as Member State. In particular, it shall aim at providing clarity and legal certainty to citizens, businesses, stakeholders and international partners on the immediate effects of the UK’s withdrawal.

With regards to the second phase of the negotiations, the guidelines state that it will not be possible to conclude an agreement setting out any future relationship between the UK and the EU until the UK formally leaves the EU and becomes a third country.

However, in light of the abovementioned requirement in Article 50(2) TEU that the parties take account of the framework for their future relations within the withdrawal negotiations, the EU and the remaining 27 Member States have indicated that they are willing to engage in “preliminary and preparatory discussions” with a view to establishing an overall understanding on the framework for future UK-EU relations. These preparatory discussions are subject to the significant caveat at point 4 that they will only commence “As soon as sufficient progress has been made in the first phase towards reaching a satisfactory agreement on the arrangements for an orderly withdrawal.”  Contrary to the views of some members of the British government, therefore, it does not appear possible to begin negotiating a future trade agreement alongside the withdrawal agreement immediately – a point which was re-emphasised by President Tusk in his remarks on Friday: “Once, and only once we have achieved sufficient progress on the withdrawal, can we discuss the framework for our future relationship. Starting parallel talks on all issues at the same time, as suggested by some in the UK, will not happen.”

Consequently, the guidelines have clarified that it will not be possible to set out all of the details governing both the UK’s withdrawal and any future UK-EU relations within a single Article 50 TEU agreement. What is more, whilst it may be possible to discuss future relations, the EU will not be in a position to conclude any agreement to this effect until the UK has formally withdrawn and become a third state. What remains to be seen, however, is whether the scope and content of any agreement governing future UK-EU relations could be agreed upon in principle prior to “Brexit day” on 29th March 2019 and then concluded quickly thereafter.  Whilst the complexities of international trade negotiations dictate that the prospects of getting all this done in less than two years are rather slim, there is nothing in the guidelines which explicitly rule this out. That said, as the guidelines now make clear, the UK is to be treated as a third state for the purposes of any agreement setting out future UK-EU relations. This raises the prospect of such an agreement being a so called “mixed agreement” requiring ratification from  national parliaments.

Finally, with regards to any transitional arrangements, point 5 of the guidelines states that “To the extent necessary and legally possible, the negotiations may also seek to determine transitional arrangements which are in the interest of the Union and, as appropriate, to provide for bridges towards the foreseeable framework for the future relationship.”  The use of the phrase “to the extent legally possible” thus leaves open the question of whether these may be included within the Article 50 TEU withdrawal agreement itself or rather must be situated in a separate agreement?

Depending upon one’s interpretation, there is arguably a nod in the direction of three separate agreements being required (or at least being possible) in point 7 of the guidelines, which states that: “The core principles set out above should apply equally to the negotiations on an orderly withdrawal, to any preliminary and preparatory discussions on the framework for a future relationship, and to any form of transitional arrangements.”

Enforcement and Dispute Settlement

The guidelines insist at several points that some form of mechanism for enforcement and dispute settlement will be required not only for the withdrawal agreement, but also for any transitional arrangement and agreement governing future UK-EU relations. Concerning the withdrawal agreement, point 8 stresses the importance of ensuring that reciprocal guarantees made to UK and EU citizens and their respective family members (for example, the right of EU citizens to remain in the UK) must be enforceable and non-discriminatory.

Moreover, point 16 states that: “The withdrawal agreement should include appropriate dispute settlement mechanisms regarding the application and interpretation of the withdrawal agreement, as well as duly circumscribed institutional arrangements allowing for the adoption of measures necessary to deal with situations not foreseen in the withdrawal agreement. This should be done bearing in mind the Union’s interest to effectively protect its autonomy and its legal order, including the role of the Court of Justice of the European Union.”

This envisages the likelihood of disputes arising in the future from and in relation to the withdrawal agreement itself. For example, should the withdrawal agreement enable EU citizens currently living and working in the UK to continue to do so on the same conditions as UK citizens, will those citizens who feel that their rights as enshrined in that agreement are not being respected be entitled to some form of redress?

Absent any concrete proposals in the guidelines as to how such dispute settlement mechanisms may operate, a number of possibilities present themselves.

One option would be to entrust an existing judicial body such as the CJEU with the task of interpreting the withdrawal agreement and settling disputes. Alternatively, one could envisage the establishment of a new court or tribunal for this specific purpose. A further possibility would be some form of ad hoc arbitral tribunal to hear disputes as and when they arise. From a different perspective, it may be possible for both the UK and EU to agree on a mechanism whereby disputes arising may be settled via diplomatic means and thus not involve any court-type entity.

In addition to the withdrawal agreement, one finds similar references to enforcement and dispute settlement in point 5 with regards to transitional measures, namely “Any such transitional arrangements must be clearly defined, limited in time, and subject to effective enforcement mechanisms. Should a time-limited prolongation of Union acquis be considered, this would require existing Union regulatory, budgetary, supervisory and enforcement instruments and structures to apply.”

The crucial point to note here is that, according to point 5, any transitional arrangement in which a time-limited prolongation of the Union acquis is envisaged would necessarily result in the continued payment by the UK into the EU budget for the duration of that arrangement, along with the continued applicability of EU law in the UK and with it the continued jurisdiction of the Court of Justice.  Whilst this makes sense from the perspective of ensuring a smooth transition from EU membership to a future trading relationship, much of the leave campaign during the referendum was based upon putting an end to much of these budgetary and institutional arrangements.

Finally, point 21 states that any future partnership between the EU and UK must include appropriate enforcement and dispute settlement mechanisms that do not affect the Union’s autonomy, in particular its decision-making procedures.

Irrespective of how these issues are ultimately resolved, it is clear that the negotiations over the withdrawal agreement (and potentially any transitional measures and future trade deal) are now likely to require substantial work on institutional arrangements to account for the settlement of potential disputes arising after the UK has formally left the EU, in addition to the more mainstream issues of assets, liabilities, citizens’ rights, pensions etc.

Gibraltar

As was noted in my previous post, “will the Spanish government seek to place the status of Gibraltar and its future EU membership explicitly on the table at the outset by pushing for its inclusion in the guidelines which shall guide the EU’s side of the negotiations?” The reason why it was foreseeable that issues relating to Gibraltar would be placed on the table at the outset is because once the guidelines have been negotiated and concluded by consensus in the European Council, there exists no means for an individual Member State to veto the withdrawal agreement, with a Qualified Majority in the Council and the consent of the European Parliament sufficient to conclude the deal.

Attention was therefore drawn to the prospect of those Member States with particularly pressing matters of national interest trying to have them included in the negotiation agenda from the beginning by including them in the European Council guidelines. And so it has come to pass, with the guidelines stating in no uncertain terms at point 22 that “After the United Kingdom leaves the Union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom.”

This is to be read alongside point 3, which stipulates that on the date of withdrawal, the Treaties will cease to apply to the United Kingdom, to those of its overseas countries and territories currently associated to the Union, and to territories for whose external relations the United Kingdom is responsible.

Interestingly, point 22 does not address the Article 50 TEU withdrawal agreement. Instead, it addresses only any future UK-EU agreement which, depending on its contents, may require a unanimous vote in the Council to conclude, which would give Spain a veto at the end of the process anyway. Nonetheless, inclusion of Gibraltar in the guidelines seems to have caught the UK government off-guard and has been met with consternation in some sections of the UK media, with accusations that Spain is using the pretext of Brexit to take back Gibraltar.

The first point to keep in mind here is that the guidelines are still in draft format. It would therefore be possible for the UK and Spanish governments to try and come to some form of understanding over the coming month and have point 22 removed from the final version of the guidelines. But should this provision make it into the formally adopted guidelines, what would this mean for the UK, EU and Gibraltar moving forward?

It is important to consider the default position here before moving to examine the possible impacts of point 22 of the guidelines.

The default position in public international law is set down in Article 29 of the Vienna Convention on the Law of Treaties (VCLT) which stipulates that unless a different intention appears from the Treaty or is otherwise established, a Treaty is binding upon each party in respect of its entire territory.

In terms of what constitutes the territory of a state, the CJEU has held that, “In the absence, in the Treaty, of a more precise definition of the territory falling within the sovereignty of each Member State, it is for each of the Member States to determine the extent and limits of that territory, in accordance with the rules of international public law.” (C‑111/05, Aktiebolaget NN v Skatteverket, paragraph 54)

In this regard, as the UK Foreign Office’s guidelines on the extension of treaties to overseas territories makes clear, overseas territories such as Gibraltar are not constitutionally part of the United Kingdom. The default position is therefore that, absent any provision dealing with the matter, any Treaty entered into by the UK does not automatically cover the territory of Gibraltar. An example of such a provision in a Treaty is provided in the EU Treaties themselves, with Article 355(3) TFEU providing that the EU Treaties shall apply to the European territories for whose external relations a Member State is responsible. This provision has been held by the CJEU to include Gibraltar (Case C-145/04, Spain v UK, paragraph 19).

Absent such a provision in the Treaty, it nevertheless remains possible for the UK to extend the territorial scope of treaties that it ratifies to include overseas territories, either at the time of ratification or at some later date. When doing so, the UK must consult the government of Gibraltar at the earliest stage possible and allow them a proper length of time to consider the implications of having any treaty extended to them.

Thus, in an “ordinary” state of affairs, any agreement between the UK and EU governing future relations could cover Gibraltar either by an explicit provision in the agreement itself or by a decision of the UK government, having consulted the government of Gibraltar, to extend the Treaty to the territory of Gibraltar.

The problem posed by point 22 of the guidelines from the UK’s perspective, however, is that the EU’s default position seems to be that any future agreement will include an explicit clause excluding its application to the territory of Gibraltar. Alternatively, point 22 could be interpreted as meaning that a provision in the agreement stating that it applies to Gibraltar will only be inserted following agreement between the UK and Spain. If correct, the question then becomes what it is that Spain would seek in return for dropping the prohibition on applicability to Gibraltar or including a provision stipulating that Gibraltar is covered by the agreement.

It is important to keep in mind that the sovereignty of Gibraltar or its coming under Spanish control are not discussed in the guidelines. They only address the applicability of any future UK-EU agreement to the territory of Gibraltar.

Thus, as things currently stand, the UK faces the prospect of having to choose between signing a comprehensive free trade agreement with the EU which will explicitly exclude the territory of Gibraltar from its scope of application, on the one hand, and leaving the EU without any agreement at all governing future relations, on the other.

In order to prevent ever having to make such a choice, UK officials could seek to negotiate with their Spanish counterparts between now and the end of April in a bid to have point 22 dropped from the final version of the negotiating guidelines.

Conclusion

As mandated by Article 50(2) TEU, the European Council has provided a draft set of guidelines which shall direct the EU side of the negotiations with the UK regarding its withdrawal from the EU. Whereas one might have expected the guidelines to be rather abstract in nature and simply set out a list of general principles, the present draft is rather detailed in terms of both its scope and content. This blog post has provided a first reaction to merely a few of the many considerable points set down by the European Council guidelines, which shall undoubtedly be the subject of much discussion and analysis in the coming days and weeks. Turning to the immediate future, the draft guidelines will need to be formally adopted by the European Council at the end of April 2017 and it remains to be seen whether any amendments shall be made to the guidelines between now and then.

The Great (UK) Repeal Bill and the Charter of Fundamental Rights – not a promising start

ORIGINAL PUBLISHED ON “DESPITE OUR DIFFERENCES” BLOG

 (*)

One of the messages that the UK government has repeated since the decision of the British people to leave the EU, is that the withdrawal will not entail a loss of any right, particularly of social rights. This was (and is) an important part of the message, considering the high turnout of labour voters that voted for Brexit.

Yesterday the Government published an insightful White Paper on the upcoming Great Repeal Bill, which will incorporate most of EU Law into UK Law once Brexit takes place, in order to provide stability and legal certainty to citizens and undertakings currently living and working in the UK. In Chapter 2, the White Paper makes a reference to the hundreds of thousands of EU acts that will be incorporated and stresses the importance of providing stability in the legal framework once Brexit happens. EU Law will carry on being applicable, but only as UK Law, and reforms will be introduced into this “repatriated EU Law” from then onwards by both Parliament and Government.

Therefore, on the day Brexit happens EU Law will be incorporated into the UK legal system, including the entirety of the Court of Justice’s case-law. This is a huge digestion of rules and judicial rulings, unprecedented in the way and speed in which it will take place.

However, there is a piece of EU Law that will not be incorporated into UK Law. This is no ordinary or irrelevant piece. It is the Charter of Fundamental Rights of the European Union. It is another revealing sign of the impact that Brexit will have in the UK and, above all, for UK citizens and their rights.

The Government’s White Paper justifies the decision to exclude the Charter from the Great Repeal Bill with an argument so simple that it is, in fact, incorrect. I very much doubt that the UK Government incurred in a clerical error when drafting the text, so I assume that the justification is simply the best effort they could do. In the Government’s own words, “the Charter was not designed to create any new rights or alter the circumstances in which individuals could rely on fundamental rights to challenge the actions of the EU Institutions or member states in relation to EU Law.” The document carries on and claims that “the Charter was intended to make the rights that already existed in EU law more visible by bringing them together in a single document”.

I might be missing something, but the Charter, besides codifying some fundamental rights already recognized in the case-law of the Court of Justice, introduced many new rights and principles of enormous relevance and inexistent under EU Law until the entry into force of the Charter in 2009.

Thanks to the Charter, EU Law recognizes the prohibition of human cloning as part of the fundamental right to physical integrity (article 2.2.d). There is nothing in EU secondary law on schools, but the Charter enshrines the freedom to found educational establishments (article 14.3). And there is a very important right conferred on nationals of non-EU Member States that are authorized to work in the EU: the right to working conditions equivalent to those of citizens of the Union (article 15.3).

In an aging society in which we will live longer than any other previous generation, the Charter recognizes the rights of the elderly “to lead a life of dignity and independence and to participate in social and cultural life”. Many of the elderly in Britain voted for Brexit. This fundamental right has been deprived from them.

The effect is even more brutal when it comes to vulnerable groups, as is the case of persons with disabilities. Article 26 of the Charter recognizes the right of persons with disabilities “to benefit from measures designed to ensure their independence, social and occupational integration and participation in the life of the community”. This right under the Charter will be gone after Brexit.

The Government’s document is even more striking when it adds that “the removal of the Charter from UK law will not affect the substantive rights that individuals already benefit from in the UK”. This assertion is made on the assumption that EU secondary law suffices to keep all the rights untouched. But this claim is wrong, and it can be easily proved with an example.

In Kušionová, the Court of Justice was faced with an unfair term in a consumer credit contract, in which the guaranteed asset was the consumer’s home. When she faced the risk of an eviction and loss of her home, Mrs. Kušionová argued that the fundamental right to accommodation, as recognized in article 7 of the Charter, protected the consumer from procedures of enforcement that would entail her eviction, the auction of the property and, as a result, the loss of her home. The Court of Justice agreed and ruled that the enforcement could not carry on as a result of the Directive 93/13 (which says nothing about extrajudicial enforcements), as interpreted in light of the Charter. By relying on the Charter, the Court of Justice interpreted Directive 93/13 in a way that created a new provision, a rule of judicial creation, coherent with the Directive 93/13, but not included by the legislature in the articles of the legal text.

With the Great Repeal Bill, Mrs. Kušionová’s case would still apply in the UK because Directive 93/13 and the UK implementing legislation will be interpreted in light of the Court of Justice’s pre-Brexit case-law. And the judgment is Kušionová was rendered in 2014, so it will remain as part of UK law.

However, this will not be the case when it comes to interpret the 2014 Mortgage Credit Directive, which has not been interpreted yet by the Court of Justice (and will not be interpreted before Brexit). This Directive will be incorporated into UK Law as a result of the Great Repeal Bill, but it will be introduced with no case-law of the Court of Justice attached to it. Therefore, the right to protect the consumer’s home will be ensured when the substantial applicable rules are those under Directive 93/13 (Kušionová), but the consumer will be left all alone, in the hands of internal UK Law, when the same risk appears but the consumer can only rely on the Mortgage Credit Directive.

It is true that the Charter can only apply in Member States when there is another rule of EU Law at stake. But all EU lawyers know that the Charter is not only an interpretative tool for the application of EU Laws, but also a source of creation of new jurisprudential rules, closely attached to the EU rules governing the case. Kušionová is a good example of how the system works. It is also a good example of how unfair and regressive the Great Repeal Bill will be for millions of right-holders in the UK, particularly for the most vulnerable communities and individuals.

As every day goes by, we understand better what “take back control” means. In the area of fundamental rights, it means a lot. And the prospects are not very good for right-holders, despite the promises of the happy Brexiteers to keep rights untouched.

 

(*)  PROFESSOR AT THE UNIVERSITY COMPLUTENSE OF MADRID  Daniel Sarmiento is Professor of EU and Administrative Law at the Universidad Complutense of Madrid. Between 2007 and 2015 he was a legal secretary at the European Court of Justice. He currently devotes his research interests to European constitutional affairs, procedural law and fundamental rights. He is also a practising lawyer at Uría Menéndez, Madrid, where he counsels in EU Law.