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Chequers White Paper Briefing No 2: Does the Facilitated Customs Arrangement comply with WTO law?

David Collins is Professor of International Economic Law at City Law School, University of London

Tw: @davidcollinslaw

Introduction

The UK government’s Chequers White Paper “The Future Relationship Between the United Kingdom and the European Union” relies heavily on a Facilitated Customs Arrangement (FCA) in which the UK will charge importers a common external EU tariff at its borders, exempting those goods which are demonstrably destined to be consumed in the UK. For goods with an indeterminate destination, the higher of the UK or EU tariff will be charged, with a rebate paid to the exporter if the good ends up in the lower tariff jurisdiction, whether that is the UK or the EU. This proposal has already encountered resistance from the EU’s chief negotiator Michel Barnier, who hs said that “The EU cannot and will not delegate the application of its customs policy and rules, VAT and duty collection to a non-member who would not be subject to the EU governance structures.

But in addition to this problem and the practical difficulties associated with this complicated system, notably tracking products with multiple components to their ultimate destination, there are at least two reasons why this may be illegal under the rules of the World Trade Organization (WTO) of which both the EU, and the UK (after Brexit) are members. Continue reading “Chequers White Paper Briefing No 2: Does the Facilitated Customs Arrangement comply with WTO law?”

Chequers White Paper Briefing No. 1: ECJ Jurisdiction

On 7 July 2018, Martin Howe QC, chairman of Lawyers for Britain, published a widely read memorandum with an initial assessment of the Prime Minister’s Chequers plan, based on the 3-page press statement issued by the government on 6 July 2018. Following the publication of the White Paper on 12 July 2018, he and other legal colleagues are producing a series of in-depth briefings about different aspects of the Chequers plan. In the first of this series, Martin Howe QC deals with the future jurisdiction of the European Court of Justice under the Chequers plan.

Introduction

At the core of the proposed permanent post-Brexit relationship with the EU is a ‘common rulebook for goods including agri-food’ (White Paper, §7a – references are to paragraph numbers in the White Paper, unless otherwise stated). This rulebook will be ‘common’ only in the sense that the rules decided on by the EU will bind the UK, but without the UK having the right which it presently enjoys as an EU Member State to vote on those rules. In addition, the White Paper commits to another ‘common’ rulebook for state aid (§7f), and a further ‘common’ rulebook consisting of the EU’s Customs Code and its rules related to safety and security (§17d). There is also another possible ‘common’ rulebook on electricity trading (§140). Continue reading “Chequers White Paper Briefing No. 1: ECJ Jurisdiction”

Binding ECJ jurisdiction on the Ukraine/Moldova/Georgia model – response to the Attorney-General

On Monday 15 July 2018, the new Attorney-General Geoffrey Cox MP circulated a letter to Colleagues in the House of Commons which commented on the Chequers Memo published by Lawyers for Britain Chairman Martin Howe QC the day after the Chequers Cabinet meeting.  Martin Howe QC has now issued another Memo containing his Response to the Attorney-General’s Letter

While he agrees with the AG that the White Paper envisages that the UK’s adherence to the so-called “common rulebooks” will be achieved by international obligations rather than by internal direct effect under UK law, he disagrees with the AG’s view that these international obligations would be “standard” or “normal”. On the contrary, they are based on the harmonisation and disputes procedures in the Association Agreements between the EU and the former Soviet republics of Ukraine, Moldova and Georgia. These contain a complex “joint reference” procedure under which the UK would be bound by ECJ decisions about UK law even though the formal ruling on a dispute would be given by an arbitral panel. He disagrees with the AG’s contention that this system “respects the principle that the court of one party cannot decide disputes between the two.” This coupled with an unbalanced obligation on UK courts to “pay due regard” to ECJ case law (with no obligation in the other direction) would make ECJ rulings in practice binding in the UK courts.

Lawyers for Britain are currently working on a fuller briefing paper on the court jurisdiction proposals in the White Paper, and are intending to  publish a series of further briefing on different aspects of these proposals as soon as thes are available.

The Chequers Cabinet conclusions – an assessment

Lawyers for Britain Chairman Martin Howe QC has prepared a Chequers Briefing Memo which assesses the details of the Chequers Statement from HM Government . Although the statement is brief and lacks much of the detail which is expected to be in the government’s White Paper to be published next week, some of his key conclusions are:-

  1. The Chequers proposals would involve the permanent continuation in the UK of all EU laws which relate to goods, their composition, their packaging, how they are tested etc etc in order to enable goods to cross the UK/EU border without controls. All goods manufactured in the UK for the UK domestic market, or imported from non-EU countries, would be permanently subject to these laws.
  2. There would be a general obligation to alter these laws in future whenever the EU alters its own laws, with a mechanism for Parliament to block such changes which is probably theoretical rather than practical.
  3. This would put the EU in a position to fashion its rules relating to goods so as to further the interests of continental producers against UK competitors, when we will have no right to vote on those rules.
  4. The obligation to follow the EU rulebook for goods would gravely impair our ability to conduct an independent trade policy. In particular, it will prevent us from including Mutual Recognition Agreements for goods in trade treaties and this is likely to destroy the prospect of successfully achieving meaningful agreements with some of the prime candidates such as the USA and Australia.
  5. The ECJ jurisdiction proposals would put us in the same position as Moldova, an applicant/supplicant state which is willing to accept binding ECJ rulings on the conformity of its laws with EU law as part of the preparations for its accession. Quite why this is thought to be a suitable model for a country which has left the EU and is the 5th largest economy in the world is unclear. The supremacy of the UK courts over laws in the UK would not be restored, contrary to the claim made in para 6(g) of the Chequers statement.
  6. The new “Facilitated Customs Arrangement” seeks to solve one of the problems of the NCP (collection of EU level tariffs with rebate system on goods destined for the UK market) by imposing on UK-destined goods the administrative burdens of a tracking system. This would (1) increase the likelihood of this system being found in breach of the national treatment principle in GATT Art.III, and (2) apparently extend yet further the timescale for implementation of this Heath Robinson system, locking the UK in the mean time into the EU’s common external tariff, preventing the electorate from benefiting from Brexit in time for the next General Election.
  7. However, there is no indication at least from what has been made public that the FCA has solved or alleviated any of the other problems of the NCP proposal. It is not clear how the problem of rules of origin controls on UK manufactured goods imported into the EU will be addressed in the absence of customs controls on the UK/EU border, or how this issue can be solved in compliance with WTO rules.
  8. These proposals will not be accepted by the EU since in their perception they amount to unacceptable “cherry picking” of the “benefits” of the single market. However the EU is unlikely to reject the UK’s position outright, but will instead keep the UK inside a “lobster pot” where it negotiates rather than prepaing for no-deal. When the negotiation time runs down, the EU will then demand huge last minute concessions in return for not taking away the transition period.
  9. These proposals therefore lead directly to a worst-of-all-worlds “Black Hole” Brexit where the UK is stuck permanently as a vassal state in the EU’s legal and regulatory tar-pit, still has to obey EU laws and ECJ rulings across vast areas, cannot develop an effective international trade policy or adapt our economy to take advantage of the freedoms of Brexit, and has lost its vote and treaty veto rights as an EU Member State.

Why we’re leaving the EU – and why the ECJ shouldn’t have jurisdiction over us after we leave

On 27 May 2018 at the XXVIII Congress of FIDE (Fédération Internationale pour le Droit Européen/International Federation for European Law) at Estoril, Portugal, Martin Howe QC, Chairman of Lawyers for Britain, took part in a panel on Brexit following the speech to the Congress by Michel Barnier, the EU’s Brexit negotiatior.

The full text of M. Barnier’s speech is available as a Commission press release and is reported on Bloomberg and Politico.

The Panel

Panel Chairman: Prof Vassilios Skouris,  Former President of the Court of Justice of the European Union

Lord (Jonathan) Mance,  Deputy President of the Supreme Court of the United Kingdom

James Wolffe QC, Lord Advocate of Scotland

Martin Howe QC, Chairman of Lawyers for Britain

Sir Jonathan Faull, Chair of European Public Affairs at the Brunswick Group, Former Director General of the European Commission

Kieran Bradley, Special Adviser to the CJEU on Brexit Continue reading “Why we’re leaving the EU – and why the ECJ shouldn’t have jurisdiction over us after we leave”

Staying in the EU Customs Union after exit

“The” Customs Union, “a” Customs Union, and aligning tariffs with the Customs Union

The idea of the UK staying in the European Union’s Customs Union after we exit from the EU has once again risen into political discourse.

This idea is expressed in different ways. One way is for the UK to stay “in” the European Union’s existing Customs Union. Another way is for the UK and the EU to join together to form “a” customs union between them. Quite what the practical difference is between these two formulae is not clear. A third way it is expressed is for the UK to maintain its external tariffs in alignment with EU tariffs. Vague suggestions are made that this might only be “partial”, ie covering some sectors of goods but not others.

But all these formulae come to the same thing. They all involve us giving up our right to set and decide the tariffs which are applied to goods entering the UK from the rest of the world. But it is not just about tariffs. Customs also operate a vast range of non-tariff controls on goods, all the way from health and other standards controls on food to, for example, safety of children’s toys. In order to operate any of the variously desribed schemes, the UK would also have to apply this vast range of EU mandated legislation as well.
Continue reading “Staying in the EU Customs Union after exit”

The Phase 1 Deal: Costly EU demands on regulatory alignment could prevent us securing trade deals elsewhere

By Martin Howe QC

Our government on our behalf is offering to pay the EU around €45-50 billion of money that we don’t legally owe, to submit to our courts and our Parliament being overruled by a wholly foreign court after we have left the EU, and to commit to keep our regulation in agriculture and possibly other fields “aligned” with the EU in order to resolve the Irish border issue. This is all so that we can reach the nirvana of having not an actual trade deal, but just talks about a trade deal. Continue reading “The Phase 1 Deal: Costly EU demands on regulatory alignment could prevent us securing trade deals elsewhere”

EU citizens’ rights and ECJ references

We must not submit to an unequal treaty, nor be taken in by “voluntary” referrals

By Martin Howe QC, 27 November 2017

When we leave the European Union on 29th March 2019, we shall automatically regain control of our laws and our courts. No foreign court will have the right to overrule British courts, or tell us what laws our courts must enforce within the UK.

We do not need the permission of the European Union or of anyone else to achieve this, which is the normal position in any sovereign, independent state. The only way we could fail to achieve this is if through an act of craven, self-harming stupidity we were voluntarily to agree to being ruled over by a foreign court.

It is therefore a matter of dismay to see stories (such as that written by James Forsyth in The Sun on 27 November 2017) saying that non-attributable sources are indicating that the government may be contemplating a so-called “compromise” proposal under which UK courts would make preliminary references for rulings by the European Court of Justice in Luxembourg on questions to do with EU citizens’ rights. Continue reading “EU citizens’ rights and ECJ references”

Why the EU’s Charter of Fundamental Rights must not be transposed into UK law

By Bryn Harris, D Phil (Oxon)

20 Nov 2017

Tomorrow, the House of Commons will debate whether to transpose the EU’s Charter of Fundamental Rights into UK law after Brexit. The Government’s European Union (Withdrawal) Bill proposes not to transpose it, while a number of opposition MPs, and some rebels on the government backbenches, have tabled amendments proposing that it be retained as part of UK domestic law.

In our Lawyers for Britain paper, The Charter of Fundamental Rights in UK law after Brexit: Why the Charter should not be transposed, we argue that the Government is right to deny the Charter a place in UK law after exit. Citizens agree to be ruled by law because it rules our society – and its institutions – in a way that is predictable and certain: the Charter is neither certain nor predictable in its operation, and so must be rejected if the UK is serious about preserving the proper rule of law.

The Charter, if retained, would overlap with our existing human rights regimes – the European Convention on Human Rights (as incorporated by the Human Rights Act 1998), which the Charter substantially duplicates but can also exceed, and the common law. As the Human Rights Act and the common law will regulate the body of retained EU law, it is difficult to see what extra value the Charter would add (apart from all the extra, possibly lucrative work for lawyers) that would justify the price to be paid in retaining it. Continue reading “Why the EU’s Charter of Fundamental Rights must not be transposed into UK law”

Perpetuating ECJ jurisdiction after Brexit

Sir Keir Starmer’s obsessive love affair with the Luxembourg Court

By Martin Howe QC

14 Nov 2017

Under the EU treaties, Judges and Advocates-General who serve on the ECJ and the EU General Court at Luxembourg must be nationals of a Member State. So when the UK leaves European Union at just before midnight on 29 March 2019, the British nationals who are currently serving in these roles will cease to hold office.

As a result, what is currently a multi-national court in which we participate will become an entirely foreign court.

But strangely, Labour’s Brexit spokesman, Sir Keir Starmer QC, is seeking to perpetuate in every conceivable way the jurisdiction of this foreign court over the UK after we have left the EU. He wrote to the Prime Minister demanding that the ECJ should continue to exercise jurisdiction over the UK during any transitional period, and threatened an amendment to the EU Withdrawal Bill to make this happen if the PM does not agree. And on Monday 13 November 2017,  in a BBC interview, he argued that the ECJ should have jurisdiction over the UK for the indefinite future where we wish to enter into arrangements with EU agencies.

However, it is virtually unheard of in international relations for an independent sovereign state to agree to subject itself to the jurisdiction of a foreign court. One has to go back to the 19th Century to find examples such as the (British) Supreme Court for China sitting in Shanghai, which exercised jurisdiction over British subjects in China and over their disputes with Chinese nationals to the exclusion of Chinese courts. Continue reading “Perpetuating ECJ jurisdiction after Brexit”

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