A brief guide to EU law in the UK
Now that a new Prime Minister is in place and the Cabinet is being formed, what are the possible options for Britain when negotiations start?
Until its formal withdrawal, the UK is still part of the EU and the single market, and so is still subject to EU law.
Broadly speaking, EU law is either directly applicable through Regulations and Treaties, or implemented by the UK as a result of Directives. Regulations and Treaties apply simply because we are a member of the EU (for instance, EC Regulation 2081/92 protects the designation of origin for food like Parma ham and Champagne). Directives require EU members to pass their own national legislation in order for them to become law in that member state (so the EU Working Time Directive had to be implemented in the UK through the Working Time Regulations, a UK piece of legislation).
As an EU member state the UK has influence over EU legislation in terms of content, direction and adoption (with the infamous “veto”). In many cases we have been at the forefront of driving EU policy, for example on issues like financial services regulation.
Even after the UK leaves the EU, the pieces of UK legislation which implement EU directives, like the Working Time Regulations, will continue to apply unless and until they are repealed. What is less certain however is whether the UK will still be bound by EU Regulations. This will depend on what kind of relationship the UK has with the EU post Brexit. We’ve set out a few options (and their likely impact) below.
European Economic Area (EEA) Membership
If the EU agrees, the UK could continue as a member of the EEA without being part of the EU (much like Norway). This would mean continued access to the single market, but also continued (if reduced) contributions to the EU budget. The UK would likely also have to comply with EU Regulations in a number of areas (including free movement) but would (as with all these options) lose the ability to contribute to or influence that legislation.
European Free Trade Association (EFTA) Membership
The EFTA involves less integration than the EEA. If the UK were a member of only the EFTA (like Switzerland) it could have continued access to the single market via a series of bilateral agreements with the EU (Switzerland has around 130 of these). This would almost certainly mean continued (even further reduced) contributions to the EU budget, and compliance with certain EU rules, but membership would not necessarily mean EU legislation would have direct effect in the UK.
EU Customs Union (EUCU) Membership
Membership only of the EUCU (like Turkey) would allow the UK to benefit from common trade policies, rules of origin, and external tariffs. The UK would still have to comply with the EU’s single market rules, but those rules would be unlikely to have direct effect in the UK.
Free Trade Agreement (FTA)
The UK could negotiate an FTA with the EU. Its terms (and the level of access to the single market) would depend on negotiation, although it is unlikely this would include any contributions to the EU budget or require EU law to have direct effect.
Although some areas will no longer be directly regulated by the EU in future, it’s very likely that the UK would implement its own legislation on similar terms. UK courts and governments may develop a different approach over time to some areas from that taken by the EU, but continued trade will still require a level of legal and regulatory harmony.
If you have a query about any aspect of Brexit, please contact your usual Cripps Pemberton Greenish contact or email us.