European Union (Withdrawal) Bill [HL]

Explanatory Notes

Legal background

42 The approach in the Bill to preserving EU law is to ensure that all EU laws which are directly applicable in the UK and all laws which have been made in the UK in order to implement our obligations as a member of the EU are converted into domestic law on the day the UK leaves the EU, subject to some limited exceptions. The paragraphs below set out the different aspects of EU law which operate currently in the UK. The commentary on the provisions of the Bill set out where changes to this will occur.

EU laws and legislation

43 The EU treaties are the highest level of EU law. They set out where the EU is permitted to act, to what extent and how. They contain a mixture of procedural rules for how the EU operates and substantive rules, such as free movement rights for EU citizens. The EU treaties also set out subject areas in which the EU can make more specific laws. This is known as the EU’s competence.

44 The two main treaties are the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) . Some provisions of the TFEU have been found to be sufficiently clear, precise and unconditional to confer rights directly on individuals. These are referred to as ‘directly applicable’ or ‘directly effective’ treaty provisions. Other treaty provisions do not confer directly applicable rights but simply give the EU the power to adopt legislation to give effect to the treaties’ provisions.

45 Below the treaties, the EU adopts directives, regulations and decisions using the powers, and following the procedures provided for, in the EU treaties.

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46 EU regulations contain detailed legal rules. Regulations have the force of law in the UK and throughout the EU. It is therefore not necessary in principle for member states to create their own legal rules in order to ensure the regulation has the desired legal effect.1

47 Directives set out a legal framework which member states have to follow, but leave discretion as to how the member state chooses to make it part of their law. So, once an EU directive has been agreed, all member states have an obligation to make domestic laws that give it effect, but they have a choice as to precisely how to do so.

48 The EU can also adopt binding decisions. Decisions may be addressed to a particular party or parties, which could be individuals (including companies) or member states. For example, the Commission has powers to issue decisions that are binding in order to enforce competition rules.2 Where a decision is addressed to a member state, implementation in domestic law may be necessary to give effect to the decision.3 Some decisions are generally and directly applicable and are available in domestic law without the need for specific implementing legislation.4

49 Below regulations, decisions and directives which are made using one of the EU legislative procedures, the EU also adopts measures in order to supplement and amend, or to implement, the rules set out in directives, regulations or decisions. Such measures are referred to respectively as ‘delegated’ and ‘implementing’ acts, and are sometimes referred to as ‘tertiary’ legislation.5 For example, under Article 4 of Regulation (EU) No 1143/2014 on the prevention and management of the introduction and spread of invasive alien species , the European Commission adopts implementing acts in order to list plant species which are assessed as invasive alien species for the purposes of the regulation.

50 The EU institutions can also adopt recommendations and opinions. These are not legally binding. However, recommendations can have legal effects, in that national courts are under a duty to take them into account in interpreting domestic legislation designed to implement them or where they are designed to supplement binding Union provisions.6 There are various forms of ‘soft law’ which are not strictly legally binding but may have legal effects in the interpretation of legally binding instruments. They include resolutions, conclusions, communications, codes of conduct, guidelines and notices.

51 The TFEU distinguishes between legislative and non-legislative acts. This is a reference to the procedure used for the adoption of an act, rather than whether an act is legally binding or not. Legislative acts are defined in Article 289(3) TFEU as those adopted by legislative procedure, that is the ordinary legislative procedure or the special legislative procedure. They may take the form of regulations, directives or decisions. Non-legislative acts are adopted other than by the ordinary or special legislative procedures and may also take the form of regulations, directives or decisions.

52 EU legislation of general application (such as EU regulations, or directives which are addressed to all member states) will come into force on the date stated within it; however, if the legislation does not state such a date, it will come into force on the twentieth day following its publication in the Official Journal. EU legislation can also provide for ‘staggered application’ where, although the instrument is in force, parts of it only apply from a specified date. Legislation of narrower application (such as decisions addressed to particular member states) will come into effect when they are notified to the relevant parties.

The general principles of EU law

53 The general principles are the fundamental legal principles governing the way in which the EU operates. They are part of the EU law with which the EU institutions and member states are bound to comply. The general principles are applied by the CJEU and domestic courts when determining the lawfulness of legislative and administrative measures within the scope of EU law, and they are also an aid to interpretation of EU law. Examples of the general principles include proportionality7, non-retroactivity (i.e. that the retroactive effect of EU law is, in principle, prohibited), fundamental rights8 and equivalence9 and effectiveness.10

54 UK laws that are within the scope of EU law and EU legislation (such as directives) that do not comply with the general principles can be challenged and disapplied. Administrative actions taken under EU law must also comply with the general principles.

The Charter of Fundamental Rights

55 The Charter of Fundamental Rights sets out the ‘EU fundamental rights’, which are the general principles of EU law that have been recognised over time through the case law of the CJEU and which have been codified in the Charter. In 2009 the Charter was given the same legal status as the EU Treaties. The Charter sets out fifty rights and principles, many of which replicate guarantees in the European Convention on Human Rights and other international treaties.

The principle of supremacy of EU law

56 A key principle of EU law is that EU law is supreme, which means that it has the status of a superior source of law within the EU’s member states. Domestic laws must give way and be disapplied by domestic courts if they are found to be inconsistent with EU law. Sometimes referred to as the principle of the primacy of EU law, this core rule of EU law was established in the case law of the CJEU before the accession of the UK to the European Communities. This is made clear, for example, in the judgment of the CJEU in Costa 11:

"By contrast with ordinary international treaties, the EEC Treaty has created its own legal system which, on the entry into
force of the Treaty, became an integral part of the legal systems of the Member States and which their courts are bound to

By creating a community of unlimited duration, having its own institutions, its own personality, its own legal capacity and
capacity of representation on the international plane and, more particularly, real powers stemming from a limitation of
sovereignty or a transfer of powers from the States to the community, the Member States have limited their sovereign
rights, albeit within limited fields, and have thus created a body of law which binds both their nationals and themselves."

The interpretation of EU law

57 When interpreting EU legislation, the starting point, as with domestic law, is the meaning of the words used. If the legislation is clearly drafted it is usually not necessary to look beyond its wording. If the legislation is ambiguous other methods of interpretation are used. These include establishing the purpose of the legislation by looking at its recitals12, looking at the legal basis of secondary legislation to understand its aim and content13, or considering other language versions of the text.14

EU law in the UK legal system

58 The ECA is the main legislation which gives effect to EU law in the UK and is the legislation which makes EU law supreme over UK law. This reflects the dualist nature of the UK’s constitutional model under which no special status is accorded to treaties, such as the EU treaties; the rights and obligations created by them take effect in domestic law through the legislation enacted to give effect to them. Although EU treaties and judgments of the EU courts provide that certain provisions of the treaties, legal instruments made under them, and judgments of the EU courts have direct application or effect in the domestic law of all of the member states (see above), such EU law is enforceable in the UK only because domestic legislation, and in particular the ECA, makes express provision for this. Thus, the ECA gives effect to the primacy of EU law and Parliament accepted this principle in approving the Act.

59 This has been recognised by the courts of the UK. As Lord Bridge noted in his judgment in Factortame 15:

"Under the terms of the Act of 1972 it has always been clear that it was the duty of the United Kingdom court, when
delivering final judgment, to override any rule of domestic law found to be in conflict with any directly enforceable rule
of Community law."

60 The ECA has been recognised by our courts as being a ‘constitutional statute’ that cannot be repealed by implication (see most recently, paragraph 67 of the Supreme Court’s decision in Miller). Express provision is required to repeal it.

61 In addition to section 2(1) and section 2(2) mentioned in paragraph 18 above, the key provisions of the ECA are:

Section 1

Provides that certain treaties are ‘EU treaties’, which means that the later provisions of the Act (such as section 2(1) and (2)) apply to the rights and obligations in them. Such treaties include those establishing the EU itself, instruments amending those treaties (such as the Lisbon Treaty in 2007), and accession instruments. The Euratom Treaty is also a treaty which has effect in this way through the provisions of the ECA.

Section 2(3)

Provides that expenditure to meet an obligation to make payments to the EU or to member states under such a treaty can be charged on public funds. Money received under such a treaty must be paid into public funds.

Section 2(4)

Section 2(4) contains two significant elements. Firstly, that the power under section 2(2) includes the power to make such provision as might be made by Act of Parliament. Secondly it also sets out that any enactment passed or to be passed is to be construed and has effect subject to the foregoing provisions of section 2, including section 2(1). This reflects the fact that EU law takes precedence over the laws of member states, as explained in paragraph 56 of these notes.

Section 3(1)

Provides that for the purposes of all UK legal proceedings, the meaning or effect of any of the EU Treaties, or the validity, meaning or effect of EU instruments are to be interpreted in accordance with the principles laid down by, and any relevant decisions of the CJEU.

Section 5

Provides for the charging, etc. of EU customs duty, which is also now the subject of a directly applicable EU Regulation (the Union Customs Code).

Section 6

Concerns the Common Agricultural Policy (CAP) developed under EU law to support the creation of a common market for agricultural products.

Part 2 of Schedule 1

Provides for several defined terms, which by virtue of the Interpretation Act 1978 apply, unless the contrary intention appears, to all domestic legislation, and not just to the ECA.

Paragraph 1A of Schedule 21

Allows secondary legislation to be made that makes ambulatory cross-references to EU instruments - that is, a reference to that instrument as it may be amended from time to time in the future.

62 Since 1973 the UK has passed various other pieces of legislation to give effect to the UK’s relationship with the EU. This included primary legislation amending the definition of EU treaties in section 1(2) of the ECA (for example, the European Communities (Amendment) Act 2002 and the European Union (Amendment) Act 2008 ). It also included various Acts of Accession, further amending the definition of EU treaties in section 1(2) of the ECA (for example, the European Union (Croatian Accession and Irish Protocol) Act 2013) .

63 The UK is a member of the EEA by virtue of its membership of the EU. Therefore on exit day the UK ceases to participate in the EEA Agreement. The European Economic Area Act 1993 makes the EEA Agreement one of the "EU treaties" for the purposes of the ECA, which implements the EEA Agreement in UK legislation. Therefore the provisions of the ECA apply to the rights and obligations in the EEA Agreement, so long as the UK is a member of the EU. The EEA Agreement is also implemented domestically through the EEA Act 1993 and other secondary legislation.

64 The European Union Act 2011 required that a referendum be held on certain amendments of the TEU or the TFEU. In short, a referendum would be triggered by amendments if these would transfer power or competence from the UK to the EU. The European Union Act 2011 also provides that an Act of Parliament would be required before the UK could agree to a number of other specified decisions provided for in TEU and TFEU. The Act was introduced following the European Union (Amendment) Act 2008, which had instituted the Treaty of Lisbon in the UK and Gibraltar without a referendum.

65 The European Union Act 2011 also contains provisions relating to the approval of the transitional protocol on Members of the European Parliament. As the UK withdraws from the EU, this and other legislation governing participation in European Parliamentary elections (namely the European Parliamentary Elections Act 2002 and the European Parliament (Representation) Act 2003 ) will be redundant and will be repealed, in line with the overall repeal of these Acts (see Schedule 9). Further provision for participation in European parliamentary elections (contained in other legal sources) will be repealed through secondary legislation made using the delegated powers in the Bill.

66 The European Union Referendum Act 2015 is the legislation that made provision for holding a referendum in the UK and Gibraltar on whether the UK should remain a member of the EU.

67 The European Union (Notification of Withdrawal) Act 2017 gave the Prime Minister the legal authority to notify under Article 50 of the TEU.

1 Examples of exceptions to this general rule include Regulation (EU) No 1143/2014 on the prevention and management of the introduction and spread of invasive alien species and Regulation (EC) No 726/2004 laying down procedures for the authorisation and supervision of medicinal products for human and veterinary use and establishing a European Medicines Agency.

2 See, for example, decisions adopted by the Commission in 2007 in relation to certain car manufacturers –

3 For example the case of Hansa Fleisch V Landrat des Kreises Schleswig-Holstein ( ECLI:EU:C:1992:423, C - 156/191) concerned provisions of a decision which had been implemented in national law.

4 For example Commission Decision 2011/753/EU, establishing the rules and methods for calculating targets for re-use and recycling set out in the Waste Framework Directive, has not been implemented via specific UK legislation, but is available in domestic law via section 2(1) ECA.

5 EU tertiary legislation consists of delegated acts and implementing acts made under powers contained in EU legislation (such as regulations or directives). It can be used to supplement or amend certain elements of the parent legislation. It is also used where uniform conditions are needed to implement a legally binding act. Powers to make tertiary legislation are conferred on the Commission (and in certain limited cases the Council).

6 See for example Grimaldi v Fonds de Maladies Professionnelles, Case 322/88, EU:C:1989:646, paragraph 18

7 Whether the proposed action exceeds what is appropriate and necessary to achieve its objective. See for example cases ABNA C-453/03, C-11/04, C-12/04 and C-194/04 EU:C:2005:741, paragraphs 76-85.

8 See for example Hauer case 44/79, EU:C:1979:290 paragraph 15

9 Under this principle, Union law based claims must be treated in an equivalent way to claims based solely on domestic law. They cannot be treated less favourably. This principle is essentially a prohibition against discrimination (see Starjakob, C-417/13, EU:C:2015:38, paragraphs 70 to 75, the Court confirmed that the principle of equivalence is not relevant to a situation which concerns only Union law based claims.

10 Under the principle of effectiveness, it must be neither practically impossible nor excessively difficult to enforce a Union law based claim. See Van Schijndel, Cases C-430/93 and C-431/93, EU:C:1995:441, paragraph 19.

11 Costa v ENEL [1964] ECR 585 (Case 6/64)

12 EU legislation, unlike domestic legislation, includes recitals at the beginning that explain the reasons why the legislation is being made, but which are not themselves substantive provisions of law. In Ziolkowski and others v Land Berlin, Case C-424/10 and C-425/10, EU:C:2011:866, paragraphs 37, 42 and 43, the Court relied on recitals to ascertain the purpose of the Citizenship Directive, and the structured nature of the rights contained in it.

13 See for example the case of BECTU Case C-173/99, paragraph 36-38, where the Court said that it was necessary to have regard to the context and purpose of the Working Time Directive in order to interpret the provision relating to annual leave entitlement. The Court had regard amongst other matters to the legal basis to conclude that the purpose of the Directive was to lay down minimum requirements to improve the living and working conditions of workers and that harmonisation was intended to guarantee better protection of the health and safety of workers.

14 See for example X, Case 228/87, EU:C:1988:442, paragraph 14

15 R v. Secretary of State for Transport, ex p. Factortame (No. 2) [1991] 1 All ER 70

1 Which came into effect on 8 January 2007.


Prepared 18th January 2018