Andrew Oliver of Hull-based Andrew Jackson Solicitors outlines the general legalities and practicalities associated with the UK leaving the EU as a result of the recent referendum

Andrew Oliver of Andrew Jackson Solicitors.

When I started to write this article, it was fully anticipated that there would be a lengthy campaign and vote to appoint a new leader of the Conservative Party and Prime Minister. By the time I had finished this article, a new Prime Minister (Theresa May) was being installed. This serves to emphasise the unpredictability and uncertainty that surrounds the political situation at present and, more particularly, how the UK’s withdrawal of membership from the European Union will unfold.

From reading various commentaries regarding Brexit, the only thing that can be said with any certainty is that the future is uncertain. Nevertheless, in this article, I try to outline the procedure by which the UK will negotiate its exit from the EU, the legal position in the meantime, the potential models for the future UK/EU relationship, and an overview of the basic international law obligations upon the UK. Even in a reasonably comprehensive article such as this, not all aspects of the effect of Brexit on the fishing and seafood industry can be considered. It is likely that the full impact of the UK’s historic decision to leave the EU will not realise itself fully until some years after Brexit happens.

At the time of writing, we await to hear the appointments to Theresa May’s Cabinet, and most importantly for the purposes of this article, the appointment of the minister and team that are to lead the Brexit negotiations. Political commentators at this stage are taking the view that a May government is unlikely to be willing to compromise on restricting free movement, with reducing immigration being prioritised over securing access to the single market. This would tend to reflect the concerns of the majority of those who voted leave.

The stark truth is that the fishing industry is likely to be a bit-part player in the Brexit negotiations, and may once again find itself low down the list of priorities, and even worse, a potential bargaining chip. It will be for the industry, in so far as it can, to make itself heard, and to avert a situation where Brexit does not deliver all those things that those in the industry who voted leave thought it might.

As appeared in Fishing News 14 July 2016 (page 2) (EU Referendum Result: An Update for Fisheries), the Marine Management Organisation (MMO) has reminded the industry that the UK continues to be a member of the EU until an exit has been negotiated and, therefore, during that time there will be no changes to fishery legislation, even once Article 50 is invoked. The UK is bound by all EU legislation, both fisheries and other, until the Withdrawal Agreement comes into force.

From a practical perspective, it should also be said that if there is a breach of the regulations between now and the time the withdrawal takes effect, it will hold absolutely no sway with a court to suggest to them in mitigation that the breach has occurred in connection with rules and regulations that are doomed following the Brexit vote.

How is withdrawal from the EU achieved? Some commentators have suggested that Brexit can be achieved by repealing the European Communities Act 1972 (ECA). This is not correct. There is only one method for withdrawal from the EU Treaties, and that is by way of Article 50 of the Lisbon Treaty.

David Cameron had said that it would be for his successor and his or her Cabinet to decide when to trigger Article 50 and, at the time he said that, it was anticipated this would be in the autumn of 2016. Things may change between the writing and publishing of this article, but it is the writer’s view that despite the appointment of a new Prime Minister, the triggering of Article 50 is unlikely to take place until September of this year at the earliest, given the imminent parliamentary and government holidays, both in the UK and in the rest of Europe, and the need for Prime Minister May’s new Cabinet to get a grip on their new portfolios, and for their civil servants to draft up an action plan and negotiating stance for Brexit. It is the writer’s view that if the industry wishes to make meaningful representations regarding the fate of the fishing industry post-Brexit, then now is the time to be ensuring its voice is heard, and those within government preparing the industry’s Brexit strategy, are lobbied and guided in the direction the industry wishes to see.

The reality is that the fishing industry will not be the government’s main priority when negotiating Brexit. At best it will play a bit part, at worst it will be a bargaining tool. Much, however, will depend on the overall strategy the government puts in place and, in particular, what it believes the final relationship between the UK and the EU will look like. It now seems clear that there are probably five potential options, with some more likely than others (see boxout page 9).

Based on the options listed, it is likely that the UK will aim to negotiate a relationship which limits (or severely limits) free movement of persons, but does have some advantages with regard to access to the EU market, which may or may not include a contribution to the EU budget. The final outcome is likely to be many years away and is uncertain, but it may just be a variation of the Swiss model that the UK eventually uses to govern its relationship with the EU. However, if that is the case, then again it is likely that fisheries and, in particular, fisheries rights are more likely to be a bargaining chip in the negotiation process as opposed to a deal-breaking sticking point.

Starting point

The starting point for negotiation of post-Brexit fisheries obligations, and potentially the easiest route, would be to largely adopt EU law, resulting in the least potential change to the status quo.

At the present time, EU law, and the obligations and restrictions created by it are directly enforceable in UK law under Section 2(1) of the ECA. This is reflected in Section 30 of the Fisheries Act 1981, which states that enforceable community restrictions and enforceable EU obligations relating to sea fishing are enforceable in UK law. Furthermore, under Section 2(2) of the ECA, the UK Government is able to transpose EU legislation into English law resulting in having our own UK legislation giving effect to EU law.

The effect of Brexit will be that the ECA is likely to be repealed and, therefore, direct applicability under Section 2(1) of the ECA will cease to have effect and, as a result, Section 30 of the Fisheries Act 1981 will cease to have effect. However, statutory instruments made under Section 2(2) of the ECA will continue to have effect post-Brexit. The effect of the repeal of the ECA will cause a vacuum in respect of those matters that had direct applicability. The simplest way of resolving this would be further legislation in the UK that all European law should continue to have effect as if Section 2(1) had not been repealed unless revoked or amended. This would buy the legislature time to review and put in place its own legislation.

As has been widely indicated in the media, once the starting gun is fired in respect of Article 50 we have two years in which to negotiate our exit. It seems inconceivable that the UK government and its civil service would be able to provide a full statute book of legislation providing for a post-Brexit UK, especially bearing in mind that we are unlikely to know what that post-exit UK or Britain is likely to look like until negotiations are completed, or possibly even after the two-year limit has run out. It is, therefore, the writer’s view that the most likely scenario in respect of fisheries legislation is a lengthy transitional period in which the UK adopts all relevant EU legislation as its own until such time as the relevant fisheries departments have had the opportunity to review and adopt their own legislation, reflecting the final makeup of the UK’s relationship with the EU.

One of the founding principles of the common fisheries policy was equal access to waters.

Brexit will mean an end to equal access. As a result, the UK will fall back upon its obligations under the United Nations Convention on the Law of the Sea (UNCLOS). This is an international convention and is nothing to do with the EU. The treaty is an international agreement resulting from the third United Nations Conference on the Law of the Sea, which took place between 1973 and 1982. It defines the rights and responsibilities of nations with respect to their use of the world’s oceans, and establishes guidelines for the management of marine resources.

At present, the UK is represented by the European Union, but on Brexit will be a party in its own right. The convention recognises a territorial sea up to a maximum of 12 miles and a zone comprising the exclusive economic zone (EEZ) out to 200 miles. It is surprising, but the UK only claimed an EEZ as recently as 31 March 2014 by way of the Exclusive Economic Zone Order 2003 (No. 3161). This was as a result of Section 41 of the Marine & Coastal Access Act 2009. Prior to that Act, the UK had claimed separate British Fishery limits, a renewable energy zone, a pollution zone and a gas importation and storage zone.

Under UNCLOS, an EEZ coastal state has ‘sovereign rights for the purpose of exploring and exploiting, conserving and managing fish stocks of the zone. The rights are subject to a number of duties. These include the coastal state taking such conservation and management measures so as to ensure that fish stocks in its EEZ are not endangered by over-exploitation and that such stocks are maintained or restored to levels which can produce maximum sustainable yield subject to relevant environmental and economic factors’. The obligation also requires the coastal state to take into account fishing patterns, the inter-dependence of stocks and any generally recommended sub-regional, regional or global minimum standards. The coastal state is further required to promote the objective of optimum utilisation of living resources within its EEZ and to establish an allowable catch for each fish stock. The obligations are in wide and general terms and give the state a very broad discretion, especially with regard to setting allowable catches.

Article 62(2) of UNCLOS states that where fishermen of the coastal state are not capable of taking the whole of the allowable catch, the coastal state is to permit the fishermen of other states to fish for the balance between what its fishermen take and the allowable catch. This, of course, supports the objective of optimum utilisation.

Article 62(3) sets out how the coastal state’s discretion in deciding access rights is to be exercised. Article 62(3) states:

“The coastal state shall take into account all relevant factors, including inter alia, the significance of the living resources of the area to the economy of the coastal state concerned and its other national interests, the provisions of Article 69 and 70, the requirements of developing states in the sub-region or region in harvesting part of the surplus and the need to minimise economic dislocation in states whose nationals have habitually fished in the zone and which have made substantial efforts in research and identification of stocks.”

Article 69 and Article 70 deal with landlocked and geographically disadvantaged states and are unlikely to bother the UK in Brexit discussions. Beyond this, the discretion to allow other states to fish is reasonably broad as, by having the ability to determine its own allowable catch, the coastal state can also determine the size of the surplus, if any. However, note should be taken of the latter part of Article 62(3) stating that a state must minimise economic dislocation in states whose nationals have habitually fished in the zone and which have made substantial efforts in research and identification of stocks. No doubt other European states will take this into account when negotiating access to UK waters. This was certainly the basis upon which the EU entered into negotiations resulting in a bilateral fisheries agreement with Norway, where the EU and Norway gave each other reciprocal access to their waters in order that the previous fishing pattern should not be disrupted too severely by the introduction of 200-mile limits.

It should be said that UNCLOS, as set out above, would convey the impression that most fish stocks confine themselves to the EEZ of a single coastal state. This is, of course, not the case. Certainly, within EU waters, stocks are shared between the EEZ of member states. Such stocks are known as shared stock and are referred to in Article 63(1) of UNCLOS. Article 63(1) says that states should seek to agree upon the measures as necessary to co-ordinate and ensure the conservation and development of such stocks. It is on this basis that periodic, usually annual, arrangements are negotiated under a pre-existing framework treaty.

The best examples of this are the Northern Agreements between the EU and Norway, Iceland and the Faroe Islands. The stocks are jointly managed and quotas exchanged, with some stocks being managed through the inter-governmental North East Atlantic Fisheries Convention (NEAFC), and also with advice from the International Council for the Exploration of the Sea (ICES).

In respect of NEAFC, at the present time the contracting parties are Denmark (including Faroe Islands and Greenland), Iceland, Norway, the Russian Federation and the European Union. It would seem conceivable that the UK would become a contracting party and negotiate a form of northern agreement akin to those that the EU already has. While the obvious starting point is UK waters for UK vessels, such a position would be politically untenable and potentially in breach of UNCLOS and, therefore, access rights would have to be negotiated, both in respect of EU member state vessels in UK waters as well as UK vessels in EU waters. This is, of course, the point at which the UK’s commitment to negotiate relating to Brexit will be tested, and in particular as to whether fisheries will be a primary area of negotiation, or a bargaining chip to be set against other more politically attractive goals, such as limiting free movement of people or gaining free access to markets.

Another definition found within UNCLOS is the term ‘straddling stocks’ which, defined under Article 63(2), relates to stocks of fish which occur both within the exclusive economic zone and in an area beyond and adjacent to the zone, such as the high seas. Similar principles apply with regard to their management. Again, such straddling stocks are managed for us by the EU, as a participant in the Northwest Atlantic Fisheries Organisation (NAFO). Again, as a result of Brexit, it would seem likely that the UK will become an independent contracting party to NAFO and will enter into bilateral agreements in connection with the protection of straddling stocks.

In the writer’s opinion, one major issue which will affect the UK fishing industry is the potential for Scottish independence, given that the largest proportion of UK fishing grounds are in Scottish waters. If Scotland were to seek independence, then quite clearly we may also end up with Scotland independently entering into fisheries negotiations with the remaining UK administrations as well as the EU, unless, of course, Scotland negotiates a different arrangement with the EU or indeed attains EU membership.

To conclude, therefore, the only certainty is uncertainty and the key issue for the fishing industry is as to what importance those negotiating Brexit on the UK’s behalf will attribute to the fishing industry.

Potential options

EEA Membership

The European Economic Area (EEA) encompasses the EU, Norway, Iceland and Lichtenstein. It enables Norway, Iceland and Lichtenstein to enjoy the benefits of the EU single market and free movement of goods, services, people and capital without the full privileges and responsibility of EU membership. However, the non-EU members of the EEA are required to adopt much of EU law and to contribute to the EU budget, although, despite doing, so have no voting power or access to the formal decision-making process. Given that Prime Minister May seems to have received the message from the electorate that the largest single issue for those who voted in the referendum was free movement of people, it seems inconceivable that the UK could simply become a member of the EEA without either obtaining special exemption from the EEA requirements as to free movement of people, or having its own treaty with the EU based on an EEA model save for those items being negotiated differently.

The Swiss Model

Switzerland has concluded a large number of bilateral agreements with the EU to give it access to the single market. The agreements provide for the free movement of goods and people, but not services. Swiss goods must meet EU regulatory requirements, and Swiss law must be considered equivalent to the corresponding relevant EU legislation. The Swiss financial contribution to the EU is much lower than that of the non-EU member states of the EEA. This, in some respects, sounds the ideal model for the UK on the basis that it could reach a bilateral agreement with the EU that dealt with the UK’s concern about the free movement of people. The difficulty is that the EU has concluded that the Swiss model is not viable in the longer term, and is already preparing a framework agreement along the lines of the EEA agreement to be agreed in the future with Switzerland. It may be that that framework agreement with Switzerland may prove a useful precedent for a bilateral agreement with the UK.

Customs Union

This is the method by which Turkey currently exists alongside the EU. Turkey is part of the Customs Union with the EU, which allows for tariff-free access without quotas to the internal market for goods but not services. Turkey retains, to the largest extent, control of its own trade policy and does not have to allow for the free movement of EU persons. It is, however, required to adopt a common tariff with the rest of the EU for third country goods, and is restricted in its ability to conclude agreements with other countries without EU consent. Turkey is also required, in due course, to harmonise its laws with those of the EU in relation to, among other things, competition, intellectual property and consumer protection as a condition of this Customs Union. This model is clearly one that has been devised to allow Turkey to gradually equalise its internal procedures with those of the EU, with a view to eventual EU membership. In those circumstances, it would not appear to be a model the UK would be able to take advantage of because UK law is already harmonised with EU law.

Free Trade Agreement

Several countries, such as Singapore and Canada, have stand-alone free trade agreements with the EU. The ability to export services, in particular, financial services, is unlikely to be achieved through a free trade agreement, and for that reason alone it is unlikely that this will be the model the UK would wish to adopt.

World Trade Organisation

The UK is already a member of the World Trade Organisation (WTO) although, along with all other EU member states, the EU currently acts on its behalf at WTO level. If the UK were to trade with the EU as a WTO member, it would control its own trade policy which would not have to allow for the free movement of persons and would not need to contribute to the EU budget. EU law would not apply in the UK. However, UK exports to the EU would face tariffs, and exporters would be required to continue to meet EU product standards. Furthermore, WTO arrangements are of even less benefit in the area of services than a free trade agreement and therefore it is unlikely the UK would adopt a WTO model.

Andrew Oliver can be contacted at: andrew.oliver@andrewjackson.co.uk