Pavlos Eleftheriadis is a barrister at Francis Taylor Building and a fellow of Mansfield College, Oxford.
A Lords committee rejected the opinion of two out of three expert witnesses in coming to the novel conclusion that our financial obligations to the EU would vanish if we leave the club with no deal.
The House of Lords EU Financial Affairs Sub-Committee’s report suggests that if we withdraw without an agreement “it follows that under EU law, Article 50 TEU [Treaty on European Union] allows the UK to leave the EU without being liable for outstanding financial obligations under the EU budget or other financial instruments, unless a withdrawal agreement is concluded which resolves this issue” (par. 133).
In other words, the issue of the enforceability of the EU’s financial claims – something I addressed in a previous column – is moot because there will be no more outstanding legal obligations. The argument is clarified in the legal opinion that accompanies the report by the Committee’s Legal Adviser, who concludes that the end of membership will bring an end to all EU obligations including “all of its legal obligations under the Own Resources Decision, the Multiannual Financial Framework, and the Annual Budget” (par. 22 of the Legal Opinion).
Can this be true? The committee heard three expert witnesses. One expert witness, Dr Maria-Luisa Sanchez-Barrueco of the University of Deusto, Bilbao, took this view. However, two other expert witnesses, Professor Takis Tridimas of King’s College London and Rhodri Thompson QC, argued for the opposite conclusion. The issue dividing them concerns the application of the Vienna Convention on the Law of Treaties. The basis for the Committee’s conclusion was that Article 50 excludes the normal application of the Vienna Convention to Brexit.
Article 70 of the Vienna Convention says: “Unless the treaty otherwise provides or the parties otherwise agree, the termination of a treaty under its provisions or in accordance with the present Convention: (a) Releases the parties from any obligation further to perform the treaty; (b) Does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination.”
So under the Vienna Convention, unless the EU treaties provide for a different solution or there is an agreement to the contrary, the rights and obligations created while the UK was a member continue. The House of Lords committee took the view that Article 50 “provides” otherwise. It therefore prevents the application of Article 70. The silence of Article 50 on financial obligations means, for the committee, that the UK’s obligations are retrospectively wiped out on Brexit.
This reading of Article 50 seems to me wholly implausible. Tridimas and Thompson, both eminent EU law experts and practitioners, have the better view. They explain that Article 50 provides for prospective withdrawal and nothing else. They conclude in their written evidence: “If anything, given that the EU treaties envisage a far more intense form of integration than other international agreements, the limitation on retroactive or immediate effect of termination, provided for by Article 70(1)(b) should apply a fortiori to the EU Treaties.” It is surprising that the committee rejected these clear submissions.
When Article 50 provides that the treaty “ceases to apply”, it refers to new obligations arising out of the treaty, but not to vested rights that were created while the UK was a party, including its financial commitments. I think this interpretation of Article 50 is the most natural reading of it. The UK cannot escape its obligations merely by walking away.
This is the second of three articles on the legal implications of quitting the EU without a deal. The first argued that any financial obligations to the EU will be enforceable. The third argues that the vested rights of EU citizens in the UK and Brits in the EU may also continue post-Brexit unless there is an exit deal.
