IMPACT – MEDIUM

U.K. voters will decide in a June 23 referendum whether Britain will remain in the European Union or exit (“Brexit”) the 28-nation bloc. Voters will cast their ballots on whether the U.K. should “remain” in or “leave” the EU, and a simple majority will decide the outcome.

Depending on the outcome of the referendum, U.K. immigration policy allowing “free movement” (and therefore the right to work and access benefits in the U.K.) for EEA nationals and their family members could change. Even if voters do approve a British exit, EU procedures require a transition period of up to two years in which a withdrawal agreement must be negotiated and approved by the European Commission and Parliament before the U.K. could terminate its obligations under EU treaties, including free movement rules.

Political background

In 2013, facing pressure from Eurosceptics within and outside his party, Prime Minister David Cameron promised a Brexit referendum if his Conservative Party won 2015 elections. Having announced the referendum last month, Cameron is campaigning against a Brexit, saying that while reform is required, Britain will be economically stronger and politically safer by remaining within the EU. On Feb. 19, Cameron negotiated an agreement with heads of EU member states providing a mechanism to amend the U.K.’s obligations under EU free movement and social security law. Given that EEA migrants’ access to U.K. benefits has been a major political issue, these potential reforms may be enough to secure a “remain” vote. Those who support a Brexit, including London Mayor Boris Johnson, argue that EU reform is not enough and Britain would do better to be free of the EU regulatory framework (which insists on free movement of goods, services and people, as well as numerous legal commitments including common agricultural and fisheries policy and rules on competition, monetary union and sovereignty).

Brexit and Migration

Immigration and free movement of migrants within the EU is a key issue in the Brexit debate. Free movement is a fundamental tenet of EU membership. Currently, the U.K. must admit any EEA national or accompanying non-EEA family member (including spouses, unmarried partners, children, parents and other designated family members) for work, study or as self-sufficient without visa restrictions and allow automatic permanent residence after five years in the U.K. EEA nationals and their family members therefore form a significant proportion of the migrant labor population in the U.K. Bids to significantly reduce migration to the U.K. are arguably impossible to meet without restrictions on EEA migration, but nothing short of a full removal from the EEA could deliver reduced migration.

Consequences of a Brexit

While the consequences of a Brexit are difficult to predict, the following scenarios are the likely possibilities, each carrying its own impact on the status of EU nationals in the U.K.:

  1. The U.K. could retain its membership in the European Economic Area (EEA), an existing treaty that includes EU countries plus Iceland, Liechtenstein and Norway. This would essentially preserve all existing rules on the free movement of people, and EU nationals already in the U.K. would not be affected. The likelihood of this happening is medium to low as it will not address the issues that gave rise to the Brexit movement and would not politically satisfy Brexit supporters.
  2. The U.K. could negotiate a bilateral agreement with the EU similar to the agreement Switzerland has negotiated, permitting free movement for workers, students and the self–employed on a non-discriminatory basis. If this happens, there will be little to no change in the immigration status of EU nationals in the U.K. However, the likelihood of this happening is medium to low as it is precisely these rules that have proven so politically contentious with those campaigning for a Brexit, and the EU is unlikely to accept an agreement in which the U.K. applies quotas or restrictions on the free movement of EU nationals.
  3. The U.K. could negotiate bilateral free-movement agreements with individual EU member states. The appetite for this type of agreement among EU member states will depend on the individual country, their economic interests in the U.K., their political interests in offsetting regional influences within the EU, and their willingness to allow Britain to use such a divisive tactic after the disruption of an exit.
  4. The U.K. could apply its national immigration laws to all EU citizens. Legally, this would simply involve the removal of only one clause in the Immigration Act 1971. However, the practical consequences on the mobility rights of EU nationals working in the U.K. would be significant:
  • EU nationals and their family members who have been in the U.K. for at least five years would be less likely to be affected as they would already hold a right to EU permanent residence. It is very unlikely that the U.K. would or could revoke this right to stay indefinitely.
  • EU nationals and their family members who have lived in the U.K. for less than five years may be required to qualify under domestic U.K. immigration rules. However, a more probable outcome is that they would be permitted to continue to exercise their treaty rights by being employed, with the prospect of obtaining permanent residence or indefinite leave in due course.
  • EU nationals who have not yet moved to the U.K. would likely need to qualify for work authorization under U.K. immigration rules, such as being sponsored as a Tier 2 (General) migrant.

Similarly, in the event of a Brexit, the immigration status of British citizens living in another EU member state would change, most likely with reciprocal arrangements put in place.

A Brexit would also make travel within the EU slower and more cumbersome. It is unclear if all EU nationals would remain exempt from visa requirements. They would no longer be able to use EU fast lanes at U.K. airports and would be required to fill in landing cards. Reciprocal arrangements would similarly impact British citizens traveling in the EU.

BAL Analysis: Withdrawal from the EU is unprecedented, making it difficult to predict the consequences of a Brexit. In the worst-case scenario, it would result in the elimination of visa-free migration for EEA nationals and EEA family members, who would need to fulfill Tier 2 or other points-based system visa requirements. The status of EEA nationals and EEA family members already working in the U.K. would most likely be maintained without disruption. BAL is closely following the referendum and will update clients on any significant developments in the months leading up the June 23 vote.

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.

Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.