On May 4 the European Commission refused the United Kingdom application to join the Lugano Convention. As the UK left the EU, it applied as an independent member, hence, it needs the approval of all signatories. The Lugano Convention applied to the UK till 31 January 2020 since the United Kingdom was a member of the EU.
What is the Lugano Convention?
The Lugano Convention was established in 2007 and it is an internationalism treaty made between the European Union (EU), the European Free Trade Association (EFTA), and European Economic Area (EEA). The convention includes all the European Union states, and additionally Iceland, Norway and Switzerland. Its purpose is to guarantee legal clarity and safeguarding it across the EU.
The convention allows national courts to have power in cross-border and commercial disputes, and it makes sure that the judgments which are taken in disputes are enforceable across borders. In simpler words, the Lugano convention supports relationships between the EU and third countries. As a result, the convention facilitates the access of EFTA states’ civil judgements to the EU’s area of justice in both civil and commercial matters.
To be able to join this convention it is necessary to be approved by all contracting parties. Therefore, not everyone can be a ‘member’ of this convention. At the very core of the convention, there is trust between the contracting parties. Without trust, it would have been impossible to establish this later.
This convention is a so-called ‘double convention’ as a part of governing international jurisdiction questions. It also concerns the implications of foreign judgments in both civil and criminal matters. It represents a feature of vital importance for the EU’s economic relations with the EFTA and EEA.
Why did the EU refuse the UK?
The United Kingdom automatically left the convention when it left the European Union. On April 8 2020, the UK formally applied to join the Lugano Convention to continue being a member after the transitional period which ended at the end of January 2020.
The EU decided to reject the UK as they are a third country without any special link in the internal market, hence, there is no reason for the EU to accept them. Moreover, the UK is not a member of the European Economic Area (EEA) or European Free Trade Association (EFTA).
The EU decision is not only unhelpful for the UK but also for the EU businesses trading in Great Britain. From January 1 2021, the United Kingdom is deemed as a third country with a normal Free Trade Agreement that facilitates trade but it does not cover fundamental freedoms of the internal market.
In conclusion, the European Union after having deeply analysed the facts decided the UK does not meet the requirements to join the 2007 convention as they do not have any special link in the internal market. However, this will affect both the UK and EU business trading.
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