Brexit: The International Legal Implications

About the series

Brexit: The International Legal Implications is a series examining the political, economic, social and legal storm that was unleashed by the United Kingdom’s June 2016 referendum and the government’s response to it. After decades of strengthening European integration and independence, the giving of notice under article 50 of the Treaty on European Union forces the UK government and the European Union to address the complex challenge of unravelling the many threads that bind them, and to chart a new course of separation and autonomy. Brexit necessitates a deep understanding of its international law implications on both sides of the English Channel, in order to chart the stormy seas of negotiating and advancing beyond separation. The paper series features international law practitioners and academics from the United Kingdom, Canada, the United States and Europe, explaining the challenges that need to be addressed in the diverse fields of trade, financial services, insolvency, intellectual property, environment and human rights.

The project leaders are Oonagh E. Fitzgerald, director of the International Law Research Program at the Centre for International Governance Innovation (CIGI); and Eva Lein, a professor at the University of Lausanne and senior research fellow at the British Institute of International and Comparative Law (BIICL). The series will be published as a book entitled Complexity’s Embrace: The International Law Implications of Brexit in spring 2018. 

In the Series

This paper addresses the main problems arising from the United Kingdom’s decision to leave the European Union with regard to insolvency proceedings. The following issues will be discussed: the modes of recognition of foreign insolvency proceedings under British law and the likely effect of Brexit, the impact of Brexit on forum and law shopping, the reform proposal for British workout procedures and the use of British workout procedures by EU companies.
Many commentators have expressed concern that the process of Brexit could have a negative impact on human rights protection in the United Kingdom. In contrast, others have argued that leaving the European Union offers an opportunity for the United Kingdom to develop better standards of rights protection than currently exist in UK or EU law, or at least standards that better reflect popular views in Britain about what qualifies as a human right. To assess the merit of these competing claims, it is necessary to consider whether Brexit creates a real risk that existing human rights standards may be eroded. In answering that question, it is clear that Brexit creates a risk that important EU legal standards that help to protect rights in areas such as personal privacy, workers’ rights and non-discrimination will be diluted, amended or even repealed over time. Furthermore, migrants and
other vulnerable groups are most at risk from any such erosion of existing standards. This risk may never materialize. However, care needs to be taken that Brexit will not lead to a diluted respect for human rights. Human rights activists, and indeed anyone concerned with the protection of civil liberties and fundamental rights within UK law and policy, will need to be vigilant in the post-Brexit era.
Brexit and environmental law constitutes one of the most challenging areas of the divorce negotiations by the United Kingdom. In many ways, EU environmental law developed organically in areas where EU member states felt that common standards would be useful because differing standards would have a direct effect on the internal market. It is also one of the areas that was decisively shaped by the United Kingdom through the introduction into environmental legislation of market mechanisms previously unknown to the administrative legal systems of civil law that governed continental Europe. As such, this area is perhaps more difficult to negotiate because the expectation would be that the United Kingdom will still trade with the European Union, but perhaps intends to lower its own environmental standards, which would in turn give the United Kingdom a competitive advantage. The paper analyzes the impact that the United Kingdom had on the development of EU environmental law.
This paper analyzes options in financial market law available to British issuers, credit institutions, insurance companies, securities firms, and asset and fund managers in terms of Brexit, considering that the United Kingdom will become a third country from the perspective of the European Union. Whether London will continue to be the centre for European financial transactions will depend on its access to the Single Market. British companies will achieve market access via equivalence, by setting up a European subsidiary, through bilateral agreements and by passively using the fundamental freedom of services. The way to be taken will depend on the respective line of businesses and groups of customers.

Nevertheless, even after Brexit, British companies will have to obey certain European laws if they want to maintain access to the Single Market. Moreover, future autonomous British law making will not be free from coordination with the Continent in order to ensure market
access. Brexit will not impact all business models to the same extent; depending on the services offered, the clients served and the
countries targeted, fundamental changes to the business model are to be expected (for example, a relocation of the European hub from London to the Continent, in particular in the banking and primary insurance markets), while, in other cases, the provision of services from London to the Continent may continue to function with few additional barriers, even in the status post-Brexit.
Both the United Kingdom and the United States have embarked on a new trade policy emphasizing the importance of bilateral trade agreements. While the current US administration resents multilateralism and plurilateralism, the UK trade policy remains firmly anchored in commitments to the multilateral trading system. Despite different underpinnings, the new bilateralism on both sides of the Atlantic will not be able to bring about appropriate regulatory cooperation and coherence in addressing global value chains and high levels of division of labour.

Instead, future UK trade agreements will have to adjust to the rules of larger markets and thus oblige industry to produce in accordance with a multitude of different and costly standards. The new trade policy fails to recognize that the problems of a highly integrated world economy no longer can be successfully dealt with bilaterally. The paper emphasizes the need to address regulatory issues in multilateral or plurilateral fora. Should Britain leave the European Union and the Customs Union, efforts to bring about a transatlantic partnership succeeding Transatlantic Trade and Investment Partnership negotiations and including the European Union, United Kingdom, United States, Canada and the European Free Trade Association are particularly warranted.
This paper addresses the issues for international recognition of reconstruction and insolvency proceedings affecting international banks raised by the United Kingdom’s decision to leave the European Union, and considers what the United Kingdom and the European Union and its member states could do to address the potential loss of recognition and cooperation, as well as possible wider international initiatives. The relation of this issue to the World Trade Organization’s General Agreement on
Trade in Services is also considered.
This paper addresses the question of whether, as a matter of law, Brexit is now unstoppable, without the agreement of the remaining 27 members states of the European Union. In other words, what would happen if, on a date before March 29, 2019, Parliament were to conclude that Britain should not leave the European Union, despite notice of its intention to do so having been given by the prime minister on March 28, 2017?
The terms of the United Kingdom’s exit from the European Union remain vague and fluid at the time of writing. However, it is clear that the prospect has given rise to concern as to the future shape and effectiveness of environmental law following Brexit. EU environmental law, as it has evolved and expanded since the early 1970s, has exerted a profound influence over the law of the United Kingdom, and has in many areas resulted in entrenched environmental problems being tackled and environmental standards being improved.
International environmental law is likely to assume increasing significance for the United Kingdom after Brexit. This paper considers the potential impact and importance raised by a number of key legal issues. The first section asks which international agreements will bind the United Kingdom after Brexit and what the extent of these obligations will be. Since the European Union has been party to many of these agreements, the legal position post-Brexit is not necessarily obvious. The next section
considers how existing EU environmental law currently implements international environmental agreements, the implications this relationship may have for national environmental law going forward, and whether reliance on international environmental obligations will provide an equivalence in legal substance after Brexit. Finally, the question of compliance and enforcement is
considered. The European Union has developed sophisticated mechanisms for the enforcement of EU obligations against member states, including those arising from international agreements, and it is questionable whether these will be replicated post-Brexit in relation to international agreements to which the United Kingdom is a party.