Whether anyone wants to exclude Scotland from the EU is a question of politics. Whether anyone has the ability to do so is a question of law. The tendency to assume that the politicians will determine the place of an independent Scotland in, or out of, the EU overlooks the fact that their room for manoeuvre is circumscribed by EU law. If the leaders of Scotland and the existing Member States cannot come to a mutual agreement it is possible the issue could pass to the Court of Justice where the judges will have the task of resolving the convolved questions of law and politics.
The legal argument might be easier to understand if we begin with one simple but strangely neglected fact. Like any place name, ‘Scotland’ is ambiguous. It can refer to the people who live there, the territory on which they live, or the legal and administrative system that delimits and governs place and people.
In the context of the independence debate, particularly the European dimension, we need to distinguish the idea of Scotland the State from Scotland the People. When we ask where Scotland will be by default in the event of independence – in or out of the EU – the answer we get differs depending on whether we are talking about the State or the People.
Scotland the State
Because Scotland the State does not yet exist it is not part of the European Union. The Member States of the EU are listed in Art 52 of the Treaty on European Union. Because Scotland does not feature in that list it does not have a place in the Council or the Commission or a judge in the Court. For Scotland to be a fully-fledged Member State it would have to be added to Art 52. That can only happen if the other MS agree to make that small but important change.
In its White Paper on independence, the Scottish Government identified the general amendment procedure in Art 48 TEU as the appropriate mechanism for change. Critics argue that only Art 49, designed specifically for accommodating new MS, could be used. Arguments about the legitimacy of one over the other would fill another essay. In several respects Art 48 provides an easier route. It requires the EU heads of state and government to decide by simple majority to start the process and finalise it by something as vague as ‘common accord’. Art 49 requires unanimity. Art 49 also requires the consent of the European Parliament. The final condition under both procedures is ratification by the national parliaments, but Art 48 qualifies that condition by giving the parliaments a two-year deadline to confirm their approval. If at least eighty per cent have ratified, then Art 48 says the matter returns to the European Council, but it does not indicate what the Council may do next. The provision was added by the Lisbon Treaty and has never been used. It seems to hint that Council could press on with a Treaty change as long as four fifths of the MS agree.
Under Art 49 there is the risk that one dissenting voice in Council would be enough to scupper the process of change at the first step, and, according to the speculation of many people with auspicious titles (professors of law and politics, outgoing presidents of the European Commission and European Council), Scotland is in danger of being rejected by countries like Spain or Cyprus anxious to make sure no precedent is set that could be followed by secessionist movements in Catalunya, Euskadi and northern Cyprus. Even if the MS in Council were to assent to Scotland’s admission in the opening stages of the application, there is still the risk that the politicians back home could vote it down later on when the national parliaments are required to ratify.
However, anyone who claims that would be the end of the matter has brushed aside some basic principles of EU law. There is more to membership of the EU than allowing a State to have representation in the EU institutions. Conflating membership and representation in this way is a fallacy that comes from applying international law to the problem rather than EU law.
International law is concerned with the rights and obligations that exist between states. It does not confer rights on individuals. The European Union/Community in contrast, not only confers rights on the citizens of the Member States, it frequently promotes those rights ahead of competing claims by the states. The Court of Justice made this incontestably clear back in 1963 in the Van Gend en Loos ruling (case 26/62). It rejected the argument from the MS that the provisions of the treaty could only be enforced by them or by the institutions of the EC. That, as they had stated, would be consistent with the orthodox position in international law. But the Community, in the reasoning of the Court, was not founded on the principles of international law. It was a unique legal system based on rules of its own making. Far from being excluded from that system, the citizens of the States are central to it, just as they are in national law. The decisive paragraph of the judgment has been quoted many times:
The conclusion to be drawn from this is that the Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only Member States but also their nationals. Independently of the legislation of Member States, Community law therefore not only imposes obligations on individuals but is also intended to confer upon them rights which become part of their legal heritage.
The Van Gend en Loos judgment has been immensely influential in determining the course of European integration but proponents of the view that independence entails exclusion prefer to ignore it. It was a point of contention among the witnesses giving evidence to the Holyrood committee examining the Scottish Government’s proposals for independence and EU membership. David Edward, formerly a judge at the Court of Justice who describes himself as a ‘moderate unionist’, was at pains to point out that there is nothing in the Treaties that would permit the EU to deprive the Scottish people of the rights they currently enjoy under EU law. He began his analysis with reference to Van Gen den Loos. Kenneth Armstrong, a professor of law at Cambridge University, responded with the opposing view that the rights of the states in the EU prevail over those of the people – the consequence being that if the existing MS do not want to admit the Scottish State then the Scottish people are to be expelled.
Armstrong’s opinions are questionable. First and foremost, he has no answer to David Edward’s observation that there is no legal procedure allowing for the revocation of the rights of a population and thereby deleting it from the EU. Secondly, the belief that the individual’s rights are subordinate to those of the state is contradicted by a long list of landmark rulings from the Court of Justice expanding the Van Gend en Loos rationale in many unexpected ways (A few outstanding examples of the Court at its boldest in promoting the rights of the individual ahead of the state: Van Duyn case 41/74  , Marshall case 152/84  , Von Colson case 14/83 , Francovich case C-9/90  , Martina Sala case C-85/96 , Watts case C-372/04 , Ruiz Zambrano case C-34/09 . The list could go on and on.) Finally, it has to be pointed out that although David Edward has described his political perspective as that of a ‘moderate unionist’, his analysis of the law leads him to a position that supports the claims of the Yes Campaign.
The exclusionist view assumes that no express legislation would be necessary to remove Scotland (in any sense) from the jurisdiction of EU law. This was the position taken by Patrick Layden in his evidence to the Holyrood enquiry: EU citizenship derives from being a national of a Member State (Art 20 TFEU), Scotland is not among the Member States listed in Art 52 TEU and, therefore, independence removes Scotland and its citizens from the EU. The argument is succinct but the loss of citizenship, of any sort, is an enormous privation with the potential to disrupt the individual’s home, work and social and family relationships. It is not something that can or should be revoked lightly. It is difficult, therefore, to accept that it could be achieved on the basis of claiming to see something implicit the Treaties.
Scotland the People
The Scottish Government takes the view that Scotland has been a member of the EU since 1973 and will continue to be a member by default in the event of independence. This is correct if we are talking about the Scottish People. As the ECJ said in the quotation above, for the citizens of the EU their rights under EU law have ‘become part of their legal heritage’. The unionists’ argument that independence will take Scotland out of the EU and force it to submit an application for membership ignores the fact that the citizens of the EU are in possession of rights separate from those of the states. Rights cannot simply evaporate. They can only be removed by legislation.
The weakness in the unionists’ reasoning is that there is nothing in the EU treaties – neither the Treaty on European Union nor the Treaty on the Functioning of the European Union - that would allow anyone to revoke the rights of Scotland’s people. The EU can only do what the Treaties authorise it to do. Attempts to pass legislation which cannot be traced back to a Treaty provision can and have been struck down by the Court of Justice. Any attempt to revoke or even restrict the rights Scotland’s people currently have under EU law could easily suffer the same fate.
In his final 18 months as president of the European Commission, Jose Manuel Barroso became a hero to the unionists with his assertions that independence would automatically take Scotland out of the EU. However, Barroso’s declared intention of treating Scotland as a ‘third country’ (i.e. one that is not a member of the EU) has been so woefully lacking in any kind of legal analysis it is difficult to give it any credence. The Commission employs many lawyers with expertise in EU law. At least one must have pointed out that:
(a) excluding Scotland’s citizens from the Single Market would require legislation;
(b) all EU legislation must be based on a Treaty article;
(c) there is no Treaty article to authorise legislation that could exclude Scotland’s citizens from the Singe Market.
It is possible his legal advisers really kept him in the dark. However a group of Spanish representatives in the European Parliament definitely brought to his attention the problems that would beset any attempt to remove EU rights from an entire population when they asked the following question (E-008133/2012) in September 2012:
if new States are created as a result of democratic processes within the Union, what provision of the treaties could serve to expel from the EU people who are EU citizens and clearly state their wish to continue being so, albeit in the context of a new country?
Barroso, as on many other occasions, chose to evade rather than reply to the question:
It is not the role of the Commission to express a position on questions of internal organisation related to the constitutional arrangements in the Member States.
The Implications of the Third Country Thesis
Jean-Claude Juncker, Barroso’s successor at the head of the Commission, has made statements indicating he has a more accommodating position on Scottish independence. This is sensible because if the EU were to persist with Barroso’s idea of declaring Scotland a third country it would quickly run into problems.
The difficulties are evident when we consider how an attempt to exclude Scotland would affect the four of the core aspects of the single market: free movement of goods, free movement of workers, freedom of establishment and freedom to provide services. Their combined effect has been to turn most of Europe into one big market place. Goods can move from one MS to another free of import duties and quota restrictions. Workers can take up an offer of employment in another Member State without having to go through the secondary and lengthy process of obtaining a work permit or seek a residence permits for their spouse and dependents. Tradesmen can cross back and forward across national borders in the course of a working day to service boilers and replace faulty light switches.
This cross border movement of people - in and out of Scotland - would not necessarily come to an end if the EU declared Scotland to be a third country. But it would no longer be guaranteed by EU law. Instead it would be dependent on national law. The SNP policy is to encourage immigration but, if it became a third country, Scotland’s government would be able to set its own terms and conditions for receiving foreign workers. Likewise, the rights of Scottish citizens to work in the EU states would be dependent on the policy those states may choose to adopt. (The position of Scots in the EU, however, is complicated by the various possibilities surrounding UK citizenship and the possibility of dual Scottish-rUK citizenship being available. Scots with UK passports will still be EU citizens, assuming, of course that whatever remains of the UK chooses to remain in the EU. Whether the rump of the UK continues to offer rump UK citizenship and passports to Scottish citizens and on what basis – birth, parentage etc. - would be a matter to be decided at Westminster.)
When it comes to the free movement of goods, the EU faces problems that are rather more intractable. If Scotland were to be declared a third country, Scottish exporters would no longer be entitled to sell to partners in the EU on the same relaxed terms they currently enjoy. They would instead be subject to the terms of the Common Customs Tariff which determines the duty payable on goods arriving in the EU from third countries. The rate of duty varies according to the product, so if we take, by way of example, two of Scotland’s most famous exports we see that Irn Bru would be taxed at 9.6% and Aberdeen Angus livestock taxed at a minimum of 10.2% rising with the weight of the animal. (Alcohol is not subject to import duty so trade in the most famous export should not be affected.)
The Legislative Obstacles to Making Scotland a Third Country
It cannot be emphasised too often – not with so many journalists and politicians equating independence with isolation - that there is no Treaty provision that allows a territory or population to be deleted from the EU. If the politicians in the European Parliament, the Council, the Commission and the Member States were really determined and united on this point they could chance their luck and try to pass a series of acts based on the various treaty provisions on which the rules on free movement, the Common Fisheries policy etc. are based. This would amount to a piecemeal exclusion of Scotland from the EU. The flaw in this approach is that those Treaty provisions were designed to further European integration and it requires an enormous leap of logic to argue that they could legitimately be used to expel part of the EU population.
Contrived as it may be, this approach would satisfy the formal requirement of finding a Treaty provisions on which to rest the drafting of exclusionary legislation. But the draft of any legislation has to go on a long journey before it can become law. In the EU it requires the agreement of the Parliament, the Council and in most cases the Commission. Each has to host an internal debate to establish a position supported by a majority of its members.
The internal politics peculiar to the Council give rise to a unique set of obstacles. Members of the Commission, Parliament and Court are expected to put national interests aside and act in the interests of the Union. However, national self-interest is always to the fore whenever the heads of the MS convene in Council.
The Spanish motive for trying to prevent Scotland’s continued participation in the EU has been aired often. But no thought has been given to how divisive this could be in Council. While a country like Cyprus might share the Spanish concern, it is just as plausible that others might be in favour of keeping Scotland in the EU - those, for example, that want to ensure free trade continues without interruption. Some might be concerned about the legal status of migrant workers in Scotland - a Member State might want to ensure Scotland remains bound by EU law in order to protect its expatriate community. How many Poles, for example, have to live in Scotland before their rights become an issue in Polish politics? Finally, there are considerations of principle and history in some MS that could conceivably make them sympathetic to Scotland's accession. The prime ministers of Latvia and Lithuania upset the Spanish government in September 2013 when they made statements to the press mildly supportive of the idea that an independent Catalunya could become a member of the EU. Their sympathetic position is not surprising considering the journey to independence is still fresh in the collective memory in Latvia and Lithuania - and also Slovenia, Slovakia, Estonia and Croatia. In the chronology of historians even Ireland is still a young state. The Spanish government may be motivated to block Scotland’s accession but what would motivate the other MS to support the Spanish position?
Challenging Third Country Status in Court
The legislative bodies of the EU/EC have made the mistake in the past of trying to legislate outside their permitted range. The remedy is to challenge the validity of the legislation in the Court of Justice using the provisions in Article 263 or Article 277 (TFEU).
In one sense Art 263 offers the easier route to Court. It allows the ‘privileged applicants’ - the Commission, Council, Parliament or any Member State – a broad discretion to challenge the validity of EU legislation provided they initiate a challenge within two months. However, it is difficult to see why they would be motivated to act. The institutions are unlikely to challenge the raison d’être of a measure on which they had all collaborated and agreed and the MS would need a strong vested interest to move them to take the issue to Court. The Scottish Government would have the motivation but, as it belongs to the second category of applicants (‘natural and legal persons’ - individuals, businesses, sub-state governments etc.) it would struggle to satisfy the rules on standing. Applicants in this second category are only allowed to present their case if they can first convince the Court that the contested measure is of ‘direct and individual concern’ to them and the Court has adopted a very restrictive conception of what it means to be individually affected by a law. The commentary on this point is extensive and the case law often confusing and heavily criticised, but I suggest the Court would tend towards the view that a measure affecting 5 million people in Scotland cannot be said to affect one any more than the others. An applicant – even 5 million applying together – would thus probably fail the test of ‘individual concern.’ For a sub-state government the test requires it to show the contested measure ‘directly prevents it from exercising its own powers’ (Het Vlaamse Gewest (Flemish Region) v Commission case T-214/95 , at para 29). Of the many powers currently available to the Scottish Government and Parliament it is not clear that any would be lost if the Scottish state or people were deemed to exist outside the EU.
Art 277, on the other hand, would make litigation almost inevitable. Where Art 263 allows institutions to challenge the offending legislation directly, Art 277 allows private applicants to make an indirect challenge. If an importer in Germany, for example, was asked to pay duty on a delivery of goods from Scotland, he would be able to contest it in his nearest administrative court. Under Art 277 he would be able to argue that the charge ultimately rested on invalid legislation. The German court would have to refer the case to the Court of Justice (under Art 267 TFEU) asking for a ruling on whether goods from Scotland should be treated as coming from a third country.
Any obstruction to the free movement of Scottish people would raise the same kind of question. If a Scottish citizen in another MS were to claim discrimination in relation to matters of employment, education, welfare provision, or any other area where EU law says all EU citizens are to be treated equally irrespective of nationality the Court of Justice would be confronted with the question: Are Scottish citizens no longer citizens of the EU?.
Because the Court is a famously activist court it is never easy or wise to predict how it will respond to anything, but if it follows procedure it will begin with the question: Where is the Treaty article that allows the EU to declare Scotland a third country and deprive its citizens of their EU legal heritage? The answer, as David Edward, former judge at the Court of Justice, has repeated on many occasions, is: None. It would also be pertinent to ask how the third country thesis can be reconciled with the goal of ‘an ever closer union among the peoples of Europe’ (Art 1 TEU) and the obligation on MS to respect, among other things, democracy and the rights of minorities (Art 2 TEU). The concept of citizenship (Art 20 TFEU), as a growing number of commentators are pointing out, places many more legal difficulties in the way of the third country thesis.
Inaction is Not an Option
The EU could continue to talk about Scotland as a third country and keep the question in the political domain - rather than conceding it to the Court - by the simple expedient of not attempting to restrict the rights Scottish citizens have under EU law. In the interest of clarity and certainty, it could even pass legislation declaring Scotland to have continuous participation in EU markets pending resolution of any outstanding questions concerning representation of the Scottish State in the EU institutions. This is much more plausible than the naysayers’ suggestion that the EU would embark on the lengthy and complicated task of divorcing itself from Scotland as a prelude to discussing terms for its readmission.
However, allowing Scotland’s people to be part of the EU economy without giving them representation in the institutions could not be tolerated indefinitely. It would also require the consent of the Scottish Government and an agreement to pay something towards the EU budget in the same way that the EFTA countries and Switzerland have to contribute in return for access to the Single Market. The idea that the EU would be able to drive a hard bargain on budget contributions ignores the fact that comparisons can be made with current contributors. Scotland could not be forced to make disproportionate payments without giving rise to accusations of discrimination, and discrimination in any form is anathema in EU law. Without mutual agreement Scotland could not be compelled to pay anything, and allowing Scotland a free ride would not go down well with the states that have to pay for the benefits of EU membership.
Leaving Scotland’s people in the EU without representation for their State would pose problems for the enforcement of EU law. Under Art 258 TFEU it is the Commission’s task to ensure that everyone complies with EU law. Where it suspects infringement it begins an investigation which can result in litigation in the Court of Justice. No matter who the transgressor may be, action is always taken against the state which, in practice, places the burden of defence on central government. Responsibility for a breach of law falls on the state even if the breach occurs in the private sector. For example, when protesting French farmers broke the rule on free movement of goods (by preventing fruit from Belgium, Italy and Spain being delivered to customers in France) it was the French state that was named as the defendant, the rationale being that the French state has agencies to enforce law and order and should have used them in defence of EU law (Commission v France, C-265/95). Clearly, the system of law enforcement in Art 258 cannot tolerate Scotland’s people having EU rights without also having their state providing accountability for them. But if the EU denies the Scottish state admission it is impossible for it to be held accountable and the EU is left with a large and embarrassing gap at the heart of its legal system.
For the duration of the independence debate, the onus has been placed on the Yes Campaign to explain how an independent Scotland can gain membership of the EU. As far as the law is concerned it requires the EU politicians to agree to make changes to the Treaties to give Scotland representation in the institutions. Those changes, as David Edward told the Holyrood enquiry on EU membership, are few and formulaic and can easily be prepared in the time between the referendum and a formal declaration of independence. The more difficult question is the one the unionists have failed to answer: where does the EU find the legal means to exclude Scotland’s people from the EU? Questions about the conditions of membership also have to be turned around and returned to the unionists. Can the EU really change the conditions that Scotland currently has – its pro rata contribution to the budget and share of the rebate, the currency opt-out and so on? Were these given to the UK state or its population? If they are altered for Scotland but not the remnant of the UK does that not amount to national discrimination, something which is strictly prohibited in EU law?
Jose Manual Barroso took the Scotland-EU debate to its nadir in February 2014 when he appeared on BBC television and said Scotland would probably find it ‘impossible’ to be admitted to the EU. Barroso is gone but his menacing message is still being repeated by opponents of independence like Ruth Davidson, the leader of Scotland’s Conservatives. When she was asked during a debate broadcast by STV on 2 September if there was any provision in the EU treaties that would make them inoperative in an independent Scotland she gave a confident but barely coherent answer about ‘international law under the Vienna Convention’. We can pass over the fact that there are many Vienna Conventions in existence and she failed to specify which one she had in mind. What matters is that she evaded the question for the simple reason that the correct answer is: No, nothing in the Treaties makes it possible for Scotland’s people to be removed from the EU. However, it would be surprising if that omission were to persist. Having been rattled by the independence campaigns in Scotland and Catalunya it would be strange if the MS allowed the next Treaty revision to take place without trying to insert a provision stipulating that secession from a MS entails secession from the EU.
Barroso’s intrusion in the debate was an odious breach of political etiquette. But the fact that he sustained it from December 2012 – when he first announced his third country thesis – until his final months in office indicates how troubled he was by the prospect of Scottish independence. His anxiety is understandable. A vote for Scottish independence would force the EU to act, but without precedent or legal provisions to say exactly what it should do there is a risk of division among the MS. The real fear for the EU is that political obstruction from just one MS could create a situation where the Scottish people are in the EU but the Scottish state is locked out. That would produce political embarrassment and legal chaos. The easiest way to avoid that situation would be for the Scottish referendum to produce a No vote - which would explain Barroso’s statements in support of the No Campaign. However, the referendum is not being run for the benefit of EU officials and administrators. A vote for independence will put the onus on the EU to find a way to accommodate Scotland as a Member State. Otherwise the EU could find itself mired in an embarrassing political and legal mess.
Ian Merrilees taught EU law and public international law at universities in England and New Zealand. He is now retired.
 ‘Independent Scotland should stay in EU, says judicial expert’, The Guardian 28 November 2013.
 The case note by Steven Peers and Marios Costa offers a concise summary of this long-running and difficult issue and the changes made by the Lisbon Treaty: ‘Judicial Review of EU Acts after the Treaty of Lisbon; Order of 6 September 2011, Case T-18/10 Inuit Tapiriit Kanatami and Others v Commission & Judgment of 25 October 2011, Case T-262/10 Microban v Commission’, (2012) 8 European Constitutional Law Review 82.