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Withdrawal - UK potential financial liabilities

We have analysed the rumoured 60 billion euros financial claim which the European Commission apparently intends to put forward as part of the Brexit negotiations.  A detailed paper Withdrawal of the UK from the European Union: Analysis of potential financial liabilities by Martin Howe QC says in summary:

Although the elements of the financial claim likely to be made by the EU27 against the UK as it withdraws from the EU have not been formally set out at least in public, it is possible to deduce of the principal elements of the prospective claim from public statements and media briefings made by the Commission and European leaders.  The following conclusions can be drawn:

(1)    The EU’s principal claim appears to be that the UK is obliged to contribute to the EU’s budget, or at least to substantial elements of it representing forward commitments to ongoing programmes, for a period of years after withdrawal. This claim appears to be wholly without merit in law. This is because the EU’s “own resources decision” is subordinate to the EU treaties, has no binding force in law independent of the treaties, and will therefore cease to impose any legal obligation on the UK on the date when the Treaties themselves cease to apply the UK under Article 50 TEU.

(2)    The EU’s second claim appears to relate to the large unfunded deficit of its staff pension scheme. The UK could not in any event be liable for a share of that without also having a claim on a corresponding share of the assets of the EU, if a process of valuing the EU’s assets and liabilities and then making or receiving a balancing payment on exit were to be undertaken. However, (A) there is no general practice in international law of States making or receiving balancing payments representing the net assets or or liabilities of an international organisation when the join or withdraw from the organisation; and (B) no such balancing payments have been made when Member States (including the UK itself) joined the EEC/EC/EU, so it is hard to see any credible basis upon which the UK could be said to be obliged to make any net payment when it leaves.

(3)    The European Investment Bank stands in a rather different position, since the Member States including the UK have paid up capital to this organisation which stands in its books.  There is a strong argument that the UK on EU exit is entitled to the return of its paid up capital and indeed to a corresponding share of the accumulated reserves of the EIB.

It should be borne in mind that this analysis only looks at these three principal items and there could be other claims and liabilities arising out of the complex finances of the EU and the complex organisation of its many subsidiary bodies and agencies.  However, looking at these three headline items, it would seem that overall the UK should be entitled on exit to a net payment in its favour, corresponding to the value of its capital invested in the EIB.