1. Brexit: Conséquences juridiques et fiscales Introduction: from a negotiation point of view
Master 2 Opérations et Fiscalité Internationales des Sociétés
Paris I Panthéon Sorbonne
March 16, (Personal view of Benoît Fleury)

2. Time to Negotiate is Extremely Short
March 2017: Formal Notice to withdraw under Article 50
April/May 2017: Guidelines by European Council – Negotiation Recommendations by EU Commission to Council of the EU
October 2018: End of Negotiations
October 2018: Consent by European Parliament
March 2019: Conclusion by Council of the EU
March 2019: “Brexit Day”
June 2019: EU Parliament Elections
15 to 18-month of effective negotiations
EU will retain control of the agenda?
Source: European Parliament Information Office in London -

3. Too Much Needs To Be Negotiated?
Withdrawal Agreement
Future Relationship
Temporary Interim Agreement – No Unlimited Transitional Status
Long-Term Agreement? Or Merely Guidelines for Further Discussion
Trade Agreements
Bi-lateral
World Trade Organization
Realistic?

4. UK Will Also Need to Focus on Other Issues
Incorporate EU law into UK domestic law, “wherever practical”
Adapt any laws that originate from the EU so as to fit the UK’s new relationship with the EU
UK Government has indicated that these legal changes would take effect on “Brexit Day”
House of Commons Library has estimated that 13.2% of UK primary and secondary legislation enacted between 1993 and 2004 was EU related
“Potentially one of the largest legislative projects ever
undertaken in the UK”
Source: The United Kingdom’s exit from and new partnership with the European Union ( February 2, 2017)

5. UK Will Need to Line-Up Member States
Government
Commission (recommendations to Council)
Council (72% of Member States covering 65% of population)
Parliament
European Parliament
Difficulty to Obtain Qualified Majority
(economic vs strategic interest) (the UK started this) (negotiation strategy)

6. UK Starting Negotiation Positions
“Our new partnership should allow for tariff-free trade in goods that is as frictionless as possible between the UK and the EU Member States”
BUT
“We want to ensure that we can take advantage of the opportunity to negotiate our own preferential trade agreements around the world”
“We will take control of our own statute book and bring an end to the jurisdiction of the Court of Justice of the European Union in the UK”
“We will design our immigration system to ensure that we are able to control the numbers of people who come here from the EU. In future, therefore, the Free Movement Directive will no longer apply”
Source: The United Kingdom’s exit from and new partnership with the European Union ( February 2, 2017)

7. Does UK Have Limited Bargaining Power?
If no agreement: not status quo but WTO
Can UK get from WTO to something better in months?
What is UK’s BATNA (Best Alternative to a Negotiated Agreement*)
“No deal for the UK is better than a bad deal for the UK”?
* most advantageous alternative course of action a party can take if negotiations fail and no agreement can be reached

8. EU Starting Negotiation Positions
“Access to the Single Market requires acceptance of all four freedoms”, including free movement of people
“Any agreement, which will be concluded with the UK as a third country, will have to be based on a balance of rights and obligations.” No similar or better rights than today/other Member States
“They should also understand there will be no pick-and-choose” by segmenting the various items of discussions / sectors
Unity: No Bilateral Negotiations
Future of Europe: too high stake?
(meaning that EU will want UK to be worse off?)

9. EU Starting Negotiation Stance
“Some call it single market membership, some call it a free trade agreement. It has the same result at the end for our economies. That will not happen, that will not happen.” (MEP Manfred Weber, Chair of the European People’s party, The Guardian, January 25, 2017)
“That is for sure what the council has understood: that parliament will not be an easy partner in these negotiations” (ibid.)
“ while member states might have potentially been able to craft a deal around their individual interests, the European parliament would also now be keen to heavily scrutinise every aspect of the ongoing negotiation and would have “the bigger picture” in mind” (ibid.)
“it could not be excluded that MEPs could reject any outcome of the negotiations at the end” (Letter from EP President Martin Schulz to European Council President Donald Tusk December 14, 2016)

10. Negotiation / Bargaining ChipsUK EU
EU citizens in the UK
Unpaid budget commitments, pension liabilities, loan guarantees and spending on UK-based projects (unofficially €60bn)
Defense and Security
Financial passport
Cars
Repatriation of € clearing houses
Fish industry/Agriculture?
Motor vehicles
Interests of Member States are not homogenous
Chemicals / Pharma
Tax haven
Science, Research and Innovation
Based on major exports from EU to UK and from UK to EU.

11. Some Useful Links
Parliament papers – “European Union (Notification of Withdrawal) Bill ” (including progress): 17/europeanunionnotificationofwithdrawal.html
European Parliament Information Office in London: events/brexit.html
Useful information: explained-article-218
Blogs by the UK Constitutional Law Association:
House of Commons - briefing paper on key elements of the Great Repeal Bill:
European Commission:
European Parliament:
UK in the EU: countries/unitedkingdom_en