Much has been written about the possible consequences of a Brexit, covering issues that are also relevant to European Research Infrastructure Consortia (ERIC), such as employment, EU grant funding, IP, trade, VAT, procurement and more.
Current negotiations to agree on a EU-UK withdrawal agreement are on-going with no guarantee of success. The following note will focus on the legal implications that a potential ‘hard’ Brexit may have on the governance of ERICs with UK participation. For the purpose of this note, a ‘hard’ Brexit means the UK exiting from the EU without a ratified withdrawal agreement or any other trade agreement in place, and with no extension of the 2-year period following the Article 50 notification of 29 March 2017.
A ‘hard’ Brexit scenario introduces a couple of legal challenges to the governance of ERICs with UK membership, more specifically, a ‘hard’ Brexit means that from a legal perspective, the UK membership in ERICs will expire automatically on 30 March 2019. It may also mean that the UK will no longer be allowed to host an ERIC and the (current) two ERICs that have their headquarter in the UK will have to relocate.
Here are the reasons why:
(1) An ERIC is established by way of an EU Decision. A Decision is binding on those to whom it is addressed i.e. the EU member states that are members or associate members of the ERIC. A Decision is directly applicable, meaning, it does not need any other acts of parliament in the member state to make it into law. EU Decisions setting up ERICs (with UK membership) are currently binding upon the UK by virtue of EU law, but this will no longer be the case following a ‘hard’ Brexit, where no arrangements ordering the continuous application of EU law in the UK have been provided for.
(2) The Statutes of most ERICs include wording on the applicable law to the setting-up and internal functioning of the ERIC, which will include reference to Council Regulation (EC) No 723/2009 of 25 June 2009 on the Community legal framework for a European Research Infrastructure Consortium (ERIC). An EU Regulation is a binding EU legislative act that is applicable to all EU Member States and, similar to a Decision, does not require any other implementing acts. Therefore, for the same reason explained above, the ERIC Regulation will seize to apply to the UK on 30 March 2019, unless an alternative arrangement is agreed upon.
(3) In all ERICS established after 29 March 2017 the EU Commission included the following wording in the Decision setting up the ERIC:
“Since the United Kingdom notified on 29 March 2017 its intention to leave the Union, pursuant to Article 50 of the Treaty on European Union, the Treaties will cease to apply to the United Kingdom from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification, unless the European Council, in agreement with the United Kingdom, decides to extend that period. As a consequence, and without prejudice to any provisions of the withdrawal agreement, this Implementing Decision only applies until the United Kingdom ceases to be a Member State" (emphasis added).
(4) Article 15 of Council Regulation (EC) No 723/2009 (integrated into the Statutes of the majority of the ERICs) grants jurisdiction to the Court of Justice of the European Union over disputes among the members of the ERIC in relation to the ERIC, between the members and the ERIC and over any litigation to which the European Union is a party. In case of a ‘hard’ Brexit, the EU courts will no longer have jurisdiction over the UK, unless the UK has voluntarily agreed to that by way of a specific agreement. Query whether this be something acceptable to the UK in case of a ‘hard’ Brexit scenario.
What can ERICs do about this?
Assuming it is a common interest of both the ERIC member states and the UK to avoid the automatic expiry of the UK membership, there are several ways to secure a continuous participation of the UK in European Research Infrastructure Consortia also in case of a ‘hard’ Brexit.
One obvious possibility is a fresh application for membership in the ERIC by the UK, this time as a ‘third country’ rather than a member state of the EU. This would mean, among others, that the UK will have to ensure that the ERIC is recognised as a separate legal personality in the UK legal system with ‘the most extensive legal capacity’; that it is recognised as an international body for VAT and procurement purposes; and that the UK accepts the jurisdiction of the Court of Justice of the European Union (as per point 4 above).
There are other creative solutions to secure a continuous participation of the UK in ERICs without disruption, based on contractual arrangements as an alternative to the above. Whatever the case maybe, ERIC Council members and UK delegates may wish to give thought and plan ahead before 30 March 2019.
