Presentation on the issues raised by Brexit and review of some solutions

1. BREXIT:
Perspectives for
Foreign Lawyers
Mickaël Le Borloch
Ph.D., LL.M.
Credit: Kamendy

2. The U.K. and the E.U.
 The U.K. initially refused to join the E.U.
 The U.K. joined the E.U. in 1973 after trying in 1961 but De
Gaulle who was the President of France set impossible
standards
 Thatcher: special status of the U.K. in the E.U. (“I want my
money back”)
 E.U. law supersedes U.K. law (Supreme Court, 24 jan.
2017, Hilary Term, [2017] UKSC 5)
 The U.K. is not part of the euro zone nor of the Schengen
area
 Date of Brexit: March 29, 2019

3. Institutions of the E.U.

4. What is the E.U.?
 The E.U. is not a State because it owes its existence to
the national Constitutions (e.g. Art. 88 s. of the French
Constitution, no Constitution in the U.K. which applies
the European Communities Act 1972)
 It is an entity somewhere between a federation and a
federal State
 E.U. law = more than 70% of member States’ laws

5. The Reasons for Brexit
 Economics: opponents argue that it is a dysfunctional economic entity
(20% in Southern Europe) and that because of the financial
equilibrium rule England stood as a shock absorber
 Sovereignty: rise of nationalism across the world, the question of
refugees, anti-immigration sentiment because of the high number of
European immigrants (73% of those who are worried about
immigration voted in favor of Brexit)
 Political elitism: major parties were in the remain camp, the “leave
voters” rejected both the Conservative and the Labour parties
 Politicians put the blame on the E.U., especially during the economic
crisis
 Ignorance: people were fooled (NHS) and did not actually know what
the EU is, people with lower level of education voted in favor of Brexit

6. What is the U.K. leaving?
 On June 23, 2016 the “No” won with 53%
 The E.U is based on 4 fundamental liberties: movement
of goods, people, services and capital over borders
Credit: jeunes Europe

7. Brexit and Movement of
Goods (Art. 28-30 TFEU)
 The U.K. exports more than 50% of its goods to the E.U.
 Barriers on the free movement of goods are prohibited and there
are no custom duties (free movement of imports and of exports)
 No quantitative restrictions such as quotas on imports and exports
 Value-added tax: national taxation that does not apply to interstate
commerce
 Goods must respect E.U. standards to be imported, the only limit
may be for “public morality, public policy or public security; the
protection of health and the life of humans, animals, plant; the
protection of national treasures … or the protection of industrial
and commercial policy”

8. Brexit and Movement of
People (Art. 49 TFEU)
 Art. 49 TFEU: “Within the framework of the provisions set
out below, restrictions on the freedom of establishment of
nationals of a Member State in the territory of another
Member State shall be prohibited. Such prohibition shall also
apply to restrictions on the setting-up of agencies, branches
or subsidiaries by nationals of any Member State
established in the territory of any Member State”
 May travel (free movement of citizens) and work (free
movement of workers) without visa (reside for more than
three months in any Member State if working, self-employed
or studying; having sufficient resources and comprehensive
sickness insurance)
 Problem: 4 millions of Europeans work in the U.K., 900,000
British nationals live on the Continent

9. Brexit and Movement of
People (Art. 49 TFEU)
 On December 8, 2017 the E.U. and the U.K. agreed on an overall
objective to provide “reciprocal protection” and to ban
discrimination based on nationality + specific status for relatives
and partners in a durable relationship
 Administrative procedures for applications for status will be
transparent, smooth and streamlined
 The right of residence will be granted consistent with E.U.
regulation, English judges will remain bound by the E.C.J.
concerning foreigners’ rights in the U.K. for 8 years after Brexit
 The U.K. and Ireland may continue to make agreements between
themselves relating to the movement of persons between their
territories (Common Travel Area)

10. Brexit and Movement of
Services (Art. 49 TFEU)
 Art. 49 TFEU: “Freedom of establishment shall include the right to
take up and pursue activities as self-employed persons and to set up
and manage undertakings, in particular companies or firms within the
meaning of the second paragraph of Article 54, under the conditions
laid down for its own nationals by the law of the country where such
establishment is effected, subject to the provisions of the Chapter
relating to capital”
 Freedom to provide and receive services
 It is prohibited to tax or impose barriers for the free movement of
services
 An attorney licensed in Germany can argue before an English Court
and can be fully licensed after passing a professional responsibility
exam
 Services account for 80% of British economy and are fundamental for
the U.K. services

11. Brexit and Movement of
Capitals (Art. 63(1) TFEU)
 Art. 63(1) TFUE: “Within the framework of the provisions set out in
this Chapter, all restrictions on the movement of capital between
Member States and between Member States and third countries
shall be prohibited”
 Companies trading securities may work and open subsidiaries in
other E.U. countries (insurance, loan, trading, issuing securities…)
 London is the financial heart of Europe and its banks may open a
subsidiary in any E.U. country and provide services beyond
borders based on a mutual recognition systems
 New York is attracting some activities, others leave to Dublin,
Frankfurt, Luxembourg and Paris (the European Banking Authority
which evaluates market’s health has moved to Paris and some
lobbyists may move too)

12. The European Economic Area
 The U.K. will not only exit the E.U. but also the E.E.A.
 E.E.A.: GDP = $18 trillion ; population = 514 millions
Credit: Wikipedia

13. The Equivalent Regulation
Rule
 If a non-E.U. country shows that its regulations are as
stringent as the E.U. regulation its companies may
have access to the common market
 This equivalent regulation rule is a privilege – which
can be withdrawn – and not a right – which cannot be
withdrawn
 This rule does not include some activities such as
loans

14. Ireland
 The E.U. and the U.K. did not agree on Ireland
 Either there is a tough border and there is a risk of
crisis, or there is no border as the U.K. remains in the
common market and there is no real Brexit
 In January 2017 Theresa May said the U.K. will leave
the common market and the custom union
Credit: U2

15. Brexit and Intellectual
Property
 Copyright: limited changes because the U.K. is bound by the
Berne convention, but it will be allowed to introduce rules making
U.K. law more consistent with the Berne convention, but it is
unlikely because the Great Repeal white paper suggests to
consider pre-Bexit E.C.J. cases as precedents
 Trademark: after Brexit E.U. will not apply anymore in the U.K. but
two U.K. white papers do not mention intellectual property, the
E.U. white paper only mentions that Brexit “should not” have
consequences on I.P. and I.P. rights should be automatically
recognized in the U.K.
 Best practice: register the trademark in the E.U. and in the U.K.
 Problem: exhaustion of rights may disappear in the U.K.

16. Brexit and Movie Financing
 The E.U. has afforded hundreds of millions of euros to
the U.K. movie industry that will not be sent any more
 However, the U.K. is a signatory of the European
Convention on Cinematographic Co-Production which
is a multilateral agreement independent of Brexit
 The British government may create new incentives
 Limits on freedom of movement of people will make film
production harder in the U.K.

17. Perspectives for the U.K.
 The UK will negotiate new trade deals on the basis of having
3.5% of world GDP, rather than as part of a bloc with 23% of
world GDP
 Join the EEA/EFTA, similar to Norway, however Norway if
the 10th highest contributor to the E.U. budget
 Negotiate bilateral trade agreements with the E.U. as a
whole (but not individual EU countries), similar to
Switzerland (in practice Switzerland implements E.U.
regulations)
 Trade with the E.U. under World Trade Organization rules

18. Perspectives for the U.K.
Costs
 The U.K. will pay between €40 and €45 billion to the
E.U.
 The U.K. will participate to the Union budget and will
pay its liabilities until December 31, 2020 as if it were a
member State
 The U.K. will receive benefits as if it were a member
State

19. Perspectives for the E.U.
 Common government for the Euro Zone
 Common headquarter for a E.U. army
 Risk of a wave of immigrants coming back to the
Continent
 Language: English will not be an official EU language,
but it is one of the three working languages

20. Thank you for your attention

21. Mickaël Le Borloch
 E-mail : le.borloch.mickael@gmail.com
 Phone : 0033.670.47.12.25
 Find me on Linkedin and Twitter at “Mickael Le
Borloch“