Brexit: Will Britain remain a member of the EEA?

Whilst most of the current expert articles and news stories are about the possible consequences of the imminent Brexit, dealing with questions such as the possibility of regarding a British limited company here in the future as a GbR or an OHG, in the context of an overall view of the matter there is one relevant circumstance which has very likely been overlooked. 

In concrete terms we are referring here to Britain’s membership of the EEA. The background: the EEA Agreement of 2 May 1992 is an agreement of association between the European Union and its member states and three of the four so-called EFTA states. EFTA (the European Free Trade Association) is an international organisation established in 1960, which meanwhile merely constitutes a free trade zone between its members; having said that, it was originally created as a counterbalance to the European Communities. The EFTA states (Iceland, Liechtenstein and Norway – with Switzerland abstaining) created in the EEA Agreement with the EU a free trade zone between the EU and the three above-mentioned EFTA states. The basis of the EEA Agreement in the form of the four basic freedoms (Art. 1 II of the EEA Agreement: free movement of goods, persons, services and capital) was taken from European Community law (as provided for in the TFEU). EEA law thus has a strong similarity to Community law.

Relevant in the second step of this contemplation is the extent to which the EEA Agreement between the EU and the EFTA states applies not only between the parties (EU – EFTA), but also within each of the parties, i.e. in particular within the EU states among themselves. In a report on this in 1991, the ECJ declared provisionally that the EEA was only based on an international treaty and therefore, as a matter of basic principle, only applied between the contractual parties. The EFTA Court, on the other hand, took the view that the EEA Agreement had a direct third-party effect; this position was confirmed by the court of first instance, and finally the ECJ also judged that the basic freedoms in the EEA Agreement had the same priorities of application as those of Community law. 

It follows from this that the basic freedoms of the EEA Agreement do not only apply between the EU states and the EFTA states as separate individual blocs, but also between the EU and EFTA member states among themselves. This begs the question of to what extent Britain’s departure from the EU affects the country’s membership of the EEA. The EEA Agreement does not state expressly that a member state of the EU leaves the EEA when it loses its member status in the EU. True, there is a provision in Article 126 of the EEA Agreement according to which the Agreement is applicable to the territories to which the Treaty establishing the EEC (the precursor of the EU) is applied, but that does not necessarily mean that the Agreement only applies to today’s EU member states. It merely makes it clear which countries the Agreement covers. 

Summary

Britain’s departure from the EU therefore has no impact on its membership of the EEA. The only issues to which heed would have to be paid are Britain’s withdrawal from the EEA Agreement or its right to suspend / terminate the Treaty as in Art. 62 of the VCLT (Vienna Convention on the Law of Treaties), though the latter presupposes the actual exercising of said right.

[November 27th, 2017]