QUESTION 1 (COMPULSORY)

The withdrawal from European Union is a very complex legal and political process, in which the
member state ceases to be Member of Union. Article 50 of TEU states that ‘Any Member State
may decide to withdraw from the Union in accordance with its own constitutional requirements’ 1
Article 50 of the TEU was enacted by the Treaty of Lisbon and was introduced on 1 December
2009.

The Article 50 of Treaty on European Union (TEU) governs the procedure for exiting any
Member State from the European Union. Originally the TEU was drafted by Lord Kerr of
Kinlochard2 and was introduced by the Treaty of Lisbon. This particular article states that any
member of the EU if wishes can withdraw its membership by fulfilling its own constitutional
requirements and by notifying the same to the European Council.

The Withdrawal of member states from the EU starts with the procedure stated under Article 50
of TEU. It states that Any Member State may decide to withdraw from the Union in accordance
with its Constitutional requirements. In case of UK, it had applied under Article 50 in the year
2017 and the process was stretched till 2020. It took around 3 years to complete the whole
process. Therefore, this also sets an example for the other member states to not apply for the
withdrawal in urgency. As it would anyhow take time for the withdrawal. The process is equally
important to be followed as it would avoid false decisions on the part of EU as well as Member
States.

Secondly, any Member State which decides to withdraw their membership from the EU shall
notify the European Council about their intent so that the arrangements for their withdrawal can
be made and an Agreement shall be negotiated following Article 218(3) of the Treaty on the
Functioning of the European Union. It shall be concluded on behalf of the Union by the Council,
acting by a qualified majority, after obtaining the consent of the European Parliament.

1
Treaty on Functioning of European Union, Article 50
2
Kentish, Benjamin "Article 50 was designed for European dictators, not the UK, says man who wrote it". The
Independent., March 29, 2017. < https://www.independent.co.uk/news/uk/politics/article-50-design-dictators-not-
uk-eu-european-lisbon-treaty-author-lord-kerr-a7655891.html> accessed on April 25, 2021
Therefore, in pursuant to Article 50 of TEU the United Kingdom triggered the Article 50 of TEU
on 29th March, 2017 followed by the Referendum passed in June 2016. Thereafter the withdrawal
was scheduled on 29th March 2019, however the UK sought an Extension till 31st January 2020
so that the negotiations can be done smoothly.

The third step is that there must be an agreement negotiated in accordance with Article 218(3) of
the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the
Union by the Council, acting by a qualified majority, after obtaining the consent of the European
Parliament.

According to this the withdrawal agreement was being ratified by the UK parliament on 23 rd
January and the same was ratified by the European Parliament on 29 th January 2020, and on 31st
January 2020, the UK left the EU by ending the 47 years of Membership.

Any Member state whosoever desires to exit the form of the EU has to face a long process and
most of the time is consumed in making a Negotiation Process.  As per the mandate, the
negotiation shall be concluded within two years to frame policies for future relationships and if
they fail to conclude any agreement then the membership ends unanimously. However, if the
state wants to extend such period they can extend such period for negotiations when it is agreed
by all the EU states and the withdrawing state.3

Thereafter, as per Article 218(3) TEFU, European Commission would make certain
recommendations to the Council to open negotiations with the withdrawing State. The European
Council while making a framework for the Withdrawal negotiations decided to deal with three
main issues, 1. The Citizen’s Rights, 2. The Financial Settlement and 3. The borders on the
Island of Ireland.  However, before concluding an agreement the Council needs to get European
Parliament’s Consent in this regard, and this is being regulated by Article 50(2) TEFU. The point
to be noted here is that the member of the European Council who is representing the withdrawing
state does not participate in the discussions concerning the withdrawal. 

3
Renwick, Alan. "What happens if we vote for Brexit?". The Constitution Unit Blog., January 19, 2016,
https://constitution-unit.com/2016/01/19/what-happens-if-we-vote-for-brexit/, accessed on April 25, 2021
Then the agreement is concluded when the parliament gets ‘Super Qualified Majority’ without
the participation of the concerned state. Article 238(3) b defines the super qualified majority as
in this case it is 72% of the member of the council, comprising 65% of the population of the
Member State. The withdrawal of a member state does not require a ratification of the remaining
member State like it is required when there is an accession of the new member state in the
Union.

As soon as the State exists from the European Union the membership ends and the Union Laws
cease to apply. It also ends the application of the treaties of the EU. when a member state
withdraws, it shall be then liable to pay the taxes and customs duties and the restrictions would
apply on them for the import and export of goods.  As per Article 50(3) TEU, the legal
consequence of withdrawal from the EU ends the force of treaties and the Protocols in the state
concerned from that point. It required that the withdrawal agreement need to address the
phasing-out from EU financial programs and other EU laws. The rights and liabilities derived
from the treaties get extinguished till to an extent it is agreed between the EU and Withdrawing
Member State. The EU treaties remain valid for the rest of the Member States and if any
amendments required as a consequence of the withdrawal would need to be made in accordance
with the procedure established in Article 48 of TEU.

The exit of the member states from the European Union requires the procedure to follow as
mentioned above. While taking the example of the UK in this scenario, the withdrawal of the
state cannot be revoked by any of the member states. It completely depends on the will of the
Member state and the authentication of the process that will be followed. As discussed, the most
important aspect of the process is the negotiation. It may sometimes happen that the member
state may change its decision after the persisting problem gets resolved after the negotiation
takes place. Therefore, it is also necessary. Another important aspect is that after withdrawal, the
customs duties would apply to the state as it would be no longer a member state and the treaties
of the EU would not apply to it. As mentioned in the portfolio, the treaty between the United
Kingdom, European Union, and Euratom which was created were given an accent by the
European Union itself. This point adds that the consent of the EU is also necessary for the
withdrawal.
Most importantly, Brexit has been acting as a governing and supervising the withdrawal of the
UK, likewise, each withdrawal would need a treaty or deal like that of Brexit. The clauses that
are mentioned in the Brexit clarifies the position of the UK after withdrawal in relation to visa,
taxation, travel, allowance, etc. therefore, the whole the process for withdrawal, the condition of
negotiation is a must and that is why the withdrawal does not happen at once and requires a
lengthy procedure to do so.

QUESTION 2

The Sources of European laws can be broadly classified into two major heads. The hierarchy of
the sources is mentioned.

1. The Primary Source

Treaties & Charters

The primary source of EU is made up of the Founding Treaties, Treaties Between Member State
and the treaties between the EU and Third Parties. The important source of Primary Law are the
treaties establishing the EU are as follows: The Treaty on the EU, The Treaty on Functioning of
EU, and the Treaty on the European Atomic Energy Community- Euratom. These treaties decide
and distribute the competencies between the European Union Members and the European Union.

These founding treaties can be termed as the ‘Constitution of European Union’ and therefore it is
considered as the important source of Union law. However, they do not create the constitution of
a federal state. The treaty on Functioning of the European Union has been interpreted in the same
manner by the Court of justice. Although the EU law prevails on the member state the union still
depends on the national courts and enforcement agencies to implement it. These treaties do not
have a complete set of civil rights but they do confer a number of rights which can be directly
enforced in the national courts. Ultimately the guarantor of those rights is the Court of Justice
and they use the doctrine of ‘Direct Effect’ to empower their citizens in their courts and, if
needed be, against their government.

The TFEU provisions that have been created directly enforceable rights are as follows:
 a. Article 18 TFEU- The right not to be discriminated against on grounds of nationality.
b. Article 157 TFEU- The right to equal pay for equal work, regardless of gender.
c. Article 45 TFEU- The right to seek work and remain as a worker in another member
state.
d. Article 56 TFEU- The right to receive and provide service.
e. Article 30 TFEU- The right not to be subjected to import taxes.
f. Article 102 TFEU- the right to take actions against another undertaking for a breach of
competition rules.

2. The Hierarchy of EU Secondary Source

The Article 289,290 and 291 of TFEU establish the hierarchy of secondary legislation between
the legislative acts, delegated acts, and implementing acts.

1. Legislative Acts

The Legislative acts are those acts that are adopted through the ordinary or a special legislative
procedure. The legislative acts are adopted by following one of the legislative procedures that are
set out in the EU treaties, it can be an ordinary legislation and can be special legislation.

2. The delegated acts

The delegated acts are non-legislative acts and they are part of general application which acts as
a supplement of certain legislative acts. The power to adopt these acts maybe sometimes be
delegated to the Commission by the legislature. The purpose, duration, objectives of delegations
are mentioned in the legislative acts. Whenever the commission adopts the delegated acts and the
parliament has no objection the delegated act enters into force.

3. Implementing acts

Implementing acts are mostly adopted by the Commission, which is competent to do so in cases
where uniform conditions are such that the legal acts are made binding. These acts are
implemented under the supervision of committees consisting of Union representative who
ensures that the EU laws are uniformly applied.
Types of EU Secondary Legislation

1. Regulations

The article 288 of TFEU Cleary mentions that the regulations shall be directly applicable. The
regulations are of general application and they are entirely bonding and directly applicable as
well. The regulations must be fully complied with by those on whom it is applicable. The
regulations are directly applicable in all the member states as soon as they enter into force and
there is no need for enacting a national law to enable the force of regulations. The regulations are
drafted in a manner to ensure the uniform application of Union law in all member states. The
regulations can even supersede the national laws if they are incompatible with their substantive
provisions.

2. Directives

These are binding intending to achieve the desired result. They can be binding on any or all of
the Member States to whom they are addressed, with the liberty to the national authorities to
choose the form and methods. Here the national legislators are required to adopt a transporting
act or ‘national implementing measures’ so that the national laws are enacted in the objective of
such directives. Here as per the Article 4(3) TEU the member state guarantees the effectiveness
of EU laws, in accordance with the principle of ‘sincere cooperation.

3. Decisions, recommendations, and opinions.

These are the third most important secondary source of law. As per Article 288 of TFEU the
decisions are binding in their entirety. They are binding only on those to whom they are
addressed, and also it addresses situations specific to those Member State or individual. The
decisions can be made directly applicable to any Member State on the same basis as of
Directives. Article 288 TFEU state that the recommendations and opinions are used as a guiding
principle and are not binding in nature at all, they don’t confer any rights and obligations to
whom they are addressed.

3. General Principles of Union Law

 These are the unwritten source of laws which are being developed by the court of Justice of
European Union in the form of case laws. Article 340 of TFEU provides for the application
of the "general principles common to the laws of the Member States" in the case of non-
contractual liability” 4 The European Union law has included various principles and they are
as follows.

a. Charter of Fundamental Rights

There were no original treatises in the EU that establish that the EU had any means to protect
human rights. In order to prevent the violation of Huma Rights by the member states, the EU in
1950 established the EU court of Human Rights, and in the year 1999 EC set up the body to draft
the Charter of Fundamental Rights of the European Union (CFR). It recognized various Political,
Social, Economic rights to EU citizens and residents. 5 It was ratified by the member states on 7th
December 2000.

b. Principle of Legal Certainty

This concept states that the laws must be certain, clear, and precise also the legal implications
can be foreseeable. The member states' legislation that implement the EU laws must be certain so
that it is clearly understood by those who are subject to the law. 6

c. Principle of Legitimate Expectations

This principle ensures that 7 "those who act in good faith on the basis of the law as it is or seems
to be should not be frustrated in their expectations" it can be easily understood by stating that a
European Union institution, once it has induced a party to take a particular course of action, must
not renege on its earlier position if doing so would cause the party to suffer loss. 8

d. Proportionality Principle

This legal principle was recognized by the European Court of Justice in the 1950s.

4
Treaty on functioning of European Union, Article 340.
5
Goldsmith, T., (2001a). „A Charter of Rights, Freedoms and Princi.
6
Kaczorowsky, Alina , ' European Union law' [ 2008] Taylor & Francis pp 232.
7
Kaczorowsky, Alina , ' European Union law' [ 2008] Taylor & Francis pp232.
8
Sharpston, E. (1990). „Legitimate expectation and economic reality‟, 15, EL Rev. 103.
The principle is that "the individual should not have his freedom of action limited beyond the
degree necessary in the public interest. The principle of proportionality is also recognized in
Article 5 of the EC Treaty, stating that "any action by the Community shall not go beyond what
is necessary to achieve the objectives of this Treaty" 9

QUESTION 6

The European Union had the practice of free movement of goods in the initial years. This was
implemented so that the member states do not face any difficulties while transporting goods
internally within them. No kind of custom duties or taxes were imposed on the import or export
of goods. However, the member states started with the application of a taxation system which
included various policies and barriers to the movement of goods. This was implemented so that
the goods which cross the borders are crossed with custom duties and taxes that can be imposed
on them depending on the nature of goods and other similar factors. The tax system imposed by
the member states can be mentioned as various kinds of barriers that are imposed on the
movement of goods. It is important to note that the taxation system that was started by the
member states did not include taxes but also regulatory restrictions. These were against the free
movement of goods in the EU. It would have also led to the destruction of peace and harmony
amongst the member states of the European Union.

The fiscal barrier refers to the monetary barrier imposed at the time of movement of goods. It
was observed by the European Commission that the market can function only if there exists a
common application of rules across the borders. Article 28 of TFEU stated that there must be a
Customs Union that shall prohibit the custom duties between the member states on export and
import of goods. However, it became necessary to impose a single set of rules so that no
discrimination takes place. Article 30 was then enacted. The Fiscal barrier imposed by Article 30
does not only apply to customs duties but, to any of the other charges too that have an equivalent
effect. This was done to have a protectionist effect on the movement of goods. Article 30 goes on
to look at the effect of tax on the free movement of goods. Article 30 looks after the charge
imposed and also keeps a check that the same is not in competition to the domestic products.
(Commission v Italy [1969] ECR 193 (Case 24/68))

9
Kaczorowsky, Alina , ' European Union law' [ 2008] Taylor & Francis pp102
On of the major issue with the implementation of the tax system is that, it would not only suffice
the import of goods but, the goods produced in the state itself would also face discrimination.
The taxes that would be applied on the goods would automatically increase their price and this
would also force the internal products to be sold in higher prices. Therefore, it would lead to
disbalance in the economic system of the states. The harm on the states would directly affect the
manufacturers as well a retailer. However, looking at the other side, the imported and the
exported goods will have to face double consequences. It would not only affect the producers
but, the consumer market would be affected too. As till now, due to free movement of goods, no
such rise in prices must have occurred and the sudden rise would also affect the demand of the
consumers.

On the other hand, Article 110 of TFEU was implemented so that direct and indirect
discrimination on the taxation of goods could be prevented. Article 110. It was implemented to
protect the complete neutrality of taxation systems between the member states. This was imposed
to ensure no discriminatory taxes are imposed on the goods imported by the other Member states.
The concept of similar products can be interpreted by the interpretation of the Article as the
taxation imposed on the imported goods could not exceed the limit of the similar products
produced in the Member State. This taxation system could not be practiced in a biased manner
and the goods of the same kind are treated equally. Also, similar kind of goods must have similar
inputs, procedures, raw materials etc. This was done to prevent direct and indirect taxation
between the internal and cross border taxations. All the steps that are taken through the treaties
of EU are for putting barriers on false implementations being done by the Member States for the
purpose of internal trade amongst them.

The fiscal barriers are also accompanied with some of the quantitative barriers. These barriers
refer to the limitations in the export and import of goods within the member states. Articles 34
and 35 of TFEU have a direct horizontal effect on the quantitative restrictions on the import and
export of goods. These principles are important to promote freedom of movement within the
member states and so that none of the rights are infringed. The barriers that have been imposed
by the state might make it difficult for the market to function within the member states.
Therefore, the implementation of Articles 34 and 3510 will make the treaty more reliable and
Consolidated version of treaty of European Union (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?
10

uri=CELEX:52021XC0323(03)&from=EN#:~:text=It%20reads%3A%20'The%20provisions%20of,the
non-discriminatory. The Dassonville Formula11 states that all the principles that have been
enacted by the member states that hinder the movement of the goods in the member states would
also count in the quantitative restrictions. Hence, they will also be covered under Articles 34 and
35 of TFEU.

Apart from the fiscal barriers, the goods were also subjected to the other kinds of barriers that led
to their harsh treatment in the Member States where they were imported. The technical barriers
were imposed which led to the non-importation of the goods based on several factors. Therefore,
the principle of mutual recognition was found and implemented by the case 120/78 Rewe-
Zentrale AG v Bundesmonopolverwaltung für Branntwein (1979) ECR 649. It led to making
mutual recognition obligatory for all the products. However, the essential requirements must be
satisfied by them. The principle is being included was included in the taxation system because
considered as important for the import and export of goods. As when the goods are imported,
they are already subject to duties and fiscal barriers, the inclusion of such technical barriers that
would prohibit the goods from being imported would lead to poor market conditions between the
member states. Therefore, when taxation is considered, the consideration of principle of mutual
recognition was considered as equally important so that apart from the taxation, they are not
subjected to such discriminatory barriers as this would also be against Article 110 of TFEU.

It can be analyzed that the member states had imposed several restrictions on the movement of
goods. However, that was against the principles of free movement of goods as per the European
Union. The restrictions that were imposed were only merely related to taxation. However, many
more conditions were attached to it. This led to taxation as well as the regulatory restrictions on
the movement of goods. The articles mentioned of TFEU prohibits these kinds of measures as
they would infringe the rights of the member states themselves. Firstly, considering the fiscal
restrictions, it depicts the system of customs duties and taxations to be paid by the goods. This is
a kind of taxation restriction. Secondly, the physical and technical barriers imposed are the
regulatory taxations that have no relation to monetary payments but are related to the fiscal
barriers. 

%20protection%20of%20national%20treasures) accessed on April 26, 2021

11
EU – Free movement of goods, Repetico, https://www.repetico.com/card-77545439, accessed on April 26, 2021
The member states through the means of these restrictions have made the movement of goods
limited and restricted. This in a result has made the functioning markets of the member states
difficult. This is due to the initial principle of the EU of free movement which never imposed
such restrictions. The principles of the EU have been opposed through these restrictions and the
member states have also tried to create tensions among themselves. This in result would not only
lead to poor market relations but, will also degrade the internal relations of member states of the
EU.

References.

1. Brexit: What you need to know about the UK leaving the EU, BBC News, December
30, 2020
2. Jacques Ziller, Acts of EU law and hierarchy of norms, Elgard Advanced introduction
Laws, <advancedintros.com/view/9781788119566/chapter12.xhtml>, accessed April
25, 2021
3. Procureur du Roi v Benoît and Gustave Dassonville (1974) Case 8/74
4. Rewe- Zentrale AG v Bundesmonopolverwaltung für Branntwein (1979) ECR 649.
5. Commission v Italy [1969] ECR 193 (Case 24/68)
6. Free movement of goods, Fact sheets on the European Union, <
https://www.europarl.europa.eu/factsheets/en/sheet/38/free-movement-of-goods>,
accessed on April 26, 2021
7. Elizabeth Bomberg and John Peterson, The European Union: How Does it
Works? (1st edn, Oxford 2008)
8. Klaus-Dieter Borchaedt, The ABC of European Union. (2010)
9. Leslie Holmes and Philomena Murray, Citizenship and Identity in Europe (1999).
10. Helen Wallace and Marka. Pollack, Policy Making in the European Union (2010).
11. Baroncelli,S., and Farneti, R, Teaching and Learning the European Union (©2014).