Argthtjtr

The EU was very insistent on the UK paying back its obligations to the EU after leaving the Union, as a condition for negotiating a favorable trade deal. But would the UK have to pay back anything if it leaves the EU without a deal of any kind on March 29th?

The short answer is that people don't all agree whether the UK has any legal commitments to the EU until a withdrawal agreement is ratified, but the House of Lords (and possibly the UK government) have been advised not.

In a House of Lords report dated 4th March 2017 the position was developed which was summarised in the following paragraphs:

The budget is going to be a contentious early issue during the UK’s negotiations over leaving the EU. It is crucial for both parties. The UK provides approximately 12% of the resources available to the EU budget, and is also a significant net contributor. The removal of the UK’s payments into the budget will require the other EU Member States to agree either to pay more into the budget, or draw less from it. Neither option is without difficulty, and those difficulties may colour the wider Brexit negotiations. The Government will have to consider its stance on continued budgetary contributions in the light of its impact on the wider negotiations, and the economic and political implications will need to be set against one another. The Government has stated that it is open to making payments towards specific programmes in order to cement a cooperative future relationship with the EU but there are already demands from the EU, for much wider contributions.

However, the strictly legal position of the UK on this issue appears to be strong. Article 50 provides for a ‘guillotine’ after two years if a withdrawal agreement is not reached unless all Member States, including the UK, agree to extend negotiations. Although there are competing interpretations, we conclude that if agreement is not reached, all EU law—including provisions concerning ongoing financial contributions and machinery for adjudication—will cease to apply, and the UK would be subject to no enforceable obligation to make any financial contribution at all. This would be undesirable for the remaining Member States, who would have to decide how to plug the hole in the budget created by the UK’s exit without any kind of transition. It would also damage the prospects of reaching friendly agreement on other issues. Nonetheless, the ultimate possibility of the UK walking away from negotiations without incurring financial commitments provides an important context.

The primary alternative interpretation holds that exercise of Article 50 doesn't rule out Article 70 of the Vienna Convention on the Law of Treaties, which reads:

Unless the treaty otherwise provides or the parties otherwise agree, the termination of a treaty under its provisions or in accordance with the present Convention:

• releases the parties from any obligation further to perform the treaty;




• does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination.

This all gets a little bit more complicated, since the dispute may or may not need to be settled by the European Court of Justice, which may or may not have the jurisdiction to make a decision after a no deal Brexit.

'Have to' is ill-defined. Just like a regular person, it could decide not to pay. The question is what the consequences of not paying are.

Rather than look at what the EU could do in retaliation, it's interesting to look at the UK itself. The UK has said that it wants to negotiate trade deals with other countries. Since those deals are not yet negotiated, those other countries will look at how the UK deals with it current trading partner. In particular, not making payments you have previously committed to will make one look untrustworthy (just like a regular person not paying their bills).

Given that the UK wants to make these trade deals, they do have a strong incentive to make these payments or at least settle the issue with the EU on good terms.

So do they have to pay? Possibly not. Is it in their interest to pay? Yes. Would it hurt their negotiating position with third countries if they left without paying and the EU publicly challenged them? Definitely.

Yes, but it's wrong to see it as "pay back". It's not about money given to the UK by the EU which the EU now wants back.

It's about commitments for future payments which were made by all EU countries, including the UK. A noteworthy example is pensions for EU staff. EU staff has rights to those pensions (just like anyone else); not now, but sometime in the future.

Now, I don't know what recourse the EU has if the UK doesn't fulfill its obligations, but the obligations are still there.