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Scotland analysis: 
EU and international issues 
January 2014 

Scotland analysis: 
EU and international issues
Presented to Parliament
by the Secretary of State for 
Foreign and Commonwealth Affairs
by Command of Her Majesty
January 2014
Cm 8765
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link to page 6 link to page 12 link to page 17 link to page 39 link to page 55 link to page 82 link to page 97 link to page 104 link to page 112 Contents 
Executive summary 

Introduction 11 
Chapter 1  The UK’s international policy 
17 
Chapter 2  The UK’s international networks 
and influence 
39 
Chapter 3  The European Union 
55 
Annex A  An independent Scottish state and 
the EU budget 
83 
Annex B  The UN Specialised Agencies 
98 
Annex C  International organisations 
105 
Annex D  Analysis of countries of a similar size 
to an independent Scottish state 
113 


Executive summary 
In September 2014 people in Scotland will take one of the most important decisions in the 
history of Scotland and the whole of the United Kingdom (UK) – whether to stay in the UK, 
or leave it and become a new, separate and independent state. 
In advance of the referendum, the UK Government will ensure that the debate is properly 
informed by analysis, and that the facts that are crucial to considering Scotland’s future are 
set out. 
While there are many precedents for parts of nation states forming new states, there are few 
concerning such long-standing, successful and established states as the UK; and there is none 
concerning a part of a Member State of the European Union (EU). 
Independent legal opinion sought and published by the UK Government in the first paper in 
this series clarified that in the event of Scotland becoming a new, independent state, the rest of 
the UK would continue as before, retaining the rights and obligations of the UK as it currently 
stands, and its membership of international organisations and institutions would continue on 
existing terms.1 
In the event of a vote for independence, in the eyes of the world and in law, Scotland would 
become an entirely new state.2 An independent Scottish state would have to start afresh in 
terms of its formal al iances and links with every other sovereign state, including the UK. 
When a new state comes into existence, it is of fundamental importance that it is recognised 
by other states. Recognition is a formal, political act, with important legal effects.3 The UK’s 
membership of key international organisations and involvement in treaties would be largely 
unaffected by Scottish independence. The UK would no longer have any obligation to represent 
Scottish interests as it currently does. 
As a new state, an independent Scotland would have to apply for membership of the international 
institutions and organisations it both wished and was eligible to join. In some cases this would 
be straightforward; in others, notably the EU, it would not. An independent Scottish state would 
not be eligible to join the United Nations Security Council as a permanent member, nor would it 
be likely to have single state representation at the G7, G8 and G20. At some of the key bodies of 
1  Scotland analysis: Devolution and the implications of Scottish independence, HM Government, February 2013 
2  Scotland analysis: Devolution and the implications of Scottish independence, HM Government, 
February 2013, page 8 
3  Scotland analysis: Devolution and the implications of Scottish independence, HM Government, 
February 2013, page 33 

6  Scotland analysis: EU and international issues
global governance, representation of an independent Scottish state would be likely to be through 
al iances with other countries, rather than in its own right as is the case with the UK.
This paper sets out how people and businesses in Scotland are served by the UK’s foreign 
policy, its diplomatic network and its international relationships, and therefore the continuing 
benefits and advantages they will enjoy through Scotland remaining part of the UK.
The UK delivers for Scotland at an international level
The UK has a unique and historic role in world affairs. It has a range of international interests that 
it pursues on behalf of all its citizens, including enhancing the UK’s security and prosperity and 
promoting its shared values. People in Scotland benefit from the UK’s international networks 
and influence on the world stage, while having a devolved government in Edinburgh that is able 
to pursue the international aspects of its policies for Scotland alongside, and with the support of, 
the UK Government.
The UK’s diplomatic global network represents Scotland worldwide, employing over 14,000 
people in 267 Embassies, High Commissions, Consulates and other offices in 154 countries 
and 12 Overseas Territories around the world. The costs of developing an international Scottish 
diplomatic network to replicate the quality of the representation currently provided by the UK, as 
the Scottish Government has stated it intends to do, would be a significant financial burden to 
the Scottish taxpayer without replacing the reach and access currently provided by the UK.
The UK works international y to promote and protect the economic interests of businesses 
based in Scotland – for example defending Scotch whisky against counterfeits, discriminatory 
or excessive taxation, trade barriers and other restrictions. Scottish businesses benefit from the 
active support of UK Trade & Investment’s (UKTI’s) 169 offices in over 100 countries. Businesses 
in an independent Scottish state would lose access to the UKTI network and the political weight 
the UK can bring to champion them.
Scotland benefits from and contributes to the UK’s bilateral relationships and its representation 
in multilateral organisations, including the North Atlantic Treaty Organization (NATO), the 
United Nations (UN) and the EU. While an independent Scottish state would develop its own 
relationships and international identity, its influence could be diminished and it would be likely to 
become more dependent on al iances with other states. The UK would have no obligation, as it 
does now, to negotiate for and deliver on Scotland’s interests.
Scotland also benefits from the UK’s status as a ‘soft power superpower’. The British Council 
facilitated 1,000 international school partnership projects in Scotland in 2012; and the UK’s 
international scholarship programmes, such as Chevening, bring many scholars to Scottish 
universities, generating significant income for those universities.
In Chapter 6 of its White Paper, the Scottish Government suggested that Scotland holds 
international priorities and values that are distinct from the rest of the UK, with greater emphasis 
placed on international justice and peace. This is not borne out by evidence. The UK has played 
a leading role in strengthening the rule of law, supporting democracy and protecting human 
rights around the world. From the campaign against the slave trade in the early 18th century, to 
the drafting of the European Convention on Human Rights in the 1950s, and the creation of the 
UN Human Rights Council in 2006, the UK has been the driving force behind many advances 
in this area. More recently, the UK launched an initiative on preventing sexual violence in conflict 
and used the platform created by the UK’s Presidency of the G8 in 2013, as well as the UN, to 
secure commitments from international partners to tackle this. The UK takes a leading role in the 
fight against poverty and is the world’s second largest aid donor, and was on target to be the 
first G8 country to spend 0.7 per cent of Gross National Income on aid from 2013. Humanitarian 

Executive summary  7
values are shared by people in the rest of the UK. Scotland, as a part of the UK, has the tools to 
exert the influence required and gain the access needed to further its humanitarian interests.
The EU
The UK uses its influence on behalf of Scotland on a whole host of issues of particular interest 
to people and businesses in Scotland, such as budget contributions, fisheries, agricultural 
subsidies and Structural Funds. Scotland benefits from this and from the UK’s strong voice in 
Europe where it contributes to and participates in discussions and negotiations from its position 
within the UK.
•  The UK currently has the equal highest number of votes in the Council (29) and the 
third largest European Parliament delegation (73 MEPs). Voting weights within the 
Council will change in 2014 to reflect directly Member States’ population size, which 
will reduce the current over-weighting for smal er Member States. As a result, the UK 
and other large Member States will have comparatively greater weight than they  
do now.
•  Some recent examples of specific gains with particular impact in Scotland include:
–  The UK Government has secured ‘Hague Preferences’, al owing Scottish 
fishermen to benefit from higher quota shares.
–  Despite fierce opposition, the UK Government fought hard and successful y 
secured protection for Scottish salmon from unfair trade from imported Norwegian 
salmon, through anti-dumping and safeguarding measures.
–  In negotiations on the EU’s Third Energy Package, the UK Government secured 
a special provision for energy companies based in Scotland to enable them to 
comply with European legislation without needing to sel  off parts of their business.
The EU is a treaty-based organisation and the UK – not Scotland – is the contracting party to 
the Treaties of the EU. Independent legal opinion sought and published by the UK Government 
indicates that, as the remainder of the UK would be the same state as the existing UK with 
the same international rights and obligations, its EU membership would continue on existing 
terms in the event of Scottish independence. That includes the important opt-outs the UK has 
secured, al owing it to keep the pound and control of its borders and immigration policy, as wel  
as a rebate from the EU budget, which is worth over £3 bil ion to the UK each year.
By contrast, since an independent Scotland would be a new state there is a strong case that it 
would have to go through some form of accession process to become a member of the EU. It 
would also have to enter into negotiations on the terms of its membership. It cannot be assumed 
that Scotland would be able to negotiate the favourable terms of EU membership which the UK 
enjoys. All new EU Member States have been required to commit to joining both the euro and 
the Schengen area. The Scottish Government’s stated intention to retain the pound and join the 
Common Travel Area is at odds with the EU’s rules for new members, and is not in the Scottish 
Government’s gift.4 Some Member States may be unwil ing to grant special opt-outs to Scotland 
on measures which they have had to adopt themselves. Others have their own independence 
movements to consider, which will influence how they view Scotland’s membership of the EU. 
Scotland’s negotiations to join the EU could be complex and long. It could not be guaranteed 
that an independent Scottish state’s negotiations would be completed within the current 
Scottish Government’s stated 18-month timeframe for joining the EU.
4  Scotland’s Future: Your guide to an independent Scotland, Scottish Government White Paper, November 2013

8  Scotland analysis: EU and international issues 
The EU budget 
As part of any accession process, an independent Scottish state would need to negotiate the 
terms under which it contributes to, and accesses funds from, the EU budget. To il ustrate the 
implications of independence, the impacts of three scenarios have been considered over the 
course of 2014–20. 
In respect of contributions to the EU budget, Scottish taxpayers currently derive a substantial 
benefit from the UK’s rebate. However, given the negotiating realities of the EU, it would be 
extremely difficult for an independent Scottish state to secure its own budgetary correction on 
accession (something no other Member State has ever done). Furthermore, it is inconceivable 
that an independent Scottish state would secure a correction as substantial as the UK rebate. 
Instead, as a new Member State it would have to contribute to the UK rebate like other Member 
States. Without a budgetary correction, it is estimated that an independent Scottish state would 
contribute a total of around €12.9 bil ion to the EU budget over the next Multiannual Financial 
Framework (MFF). This is around €2.9 bil ion higher (€1,100 more per household) over 2014–20 
than if Scotland continues to be part of the UK. 
Fol owing recent decisions by the UK Government on intra-UK al ocations of EU budget receipts 
for 2014–20, Scotland will receive €228 mil ion more in Structural Funds than if it were an 
independent state. On the Common Agricultural Policy (CAP) an independent Scottish state’s 
receipts are uncertain and would depend on the terms of accession, which would have to 
be agreed by all 28 Member States. Scotland has been al ocated €3.6 bil ion in Pil ar 1 CAP 
receipts for 2014–20, and the Scottish Government has claimed that an already independent 
Scottish state would be receiving direct payments of €196 per hectare by 2020, increasing its 
al ocation in real terms by €950 mil ion over 2014–20. 
However, the key question is what would happen to Scottish CAP receipts if it were to become 
an independent Member State of the EU. With the EU budget ceilings agreed to 2020, any 
increase in Scottish CAP receipts would be at the expense of other Member States, all of which 
would need to agree to Scottish accession. There is also a risk that an independent Scottish 
state would be required to phase in receipts, in line with recent accessions. Given all the 
uncertainties, this paper considers two independence scenarios over 2014–20 in respect of the 
EU budget – one where CAP receipts increase by €950 mil ion compared with Scottish receipts 
within the UK, and one where they fall by €1.2 bil ion. 
Even under the most optimistic receipts scenario from the perspective of an independent 
Scottish state, the total impact of different levels of receipts is dwarfed by the impact of losing 
the benefit arising from the UK rebate. Under the most optimistic scenario for CAP receipts, 
an independent Scottish state’s net contribution would be at least around €2.2 bil ion (€840 
per household) worse over 2014–20 than as part of the UK. Under less optimistic scenarios, 
an independent Scottish state could see its CAP (and total) receipts fall substantial y, with the 
deterioration in net contributions over 2014–20 rising to as much as €4.3 bil ion (€1,650 per 
household) compared with Scotland being part of the UK. 
The Scottish Government’s position, that the UK rebate could be ‘shared’ on the basis of 
bilateral negotiations between the UK and an independent Scottish state without re-opening the 
2014–20 EU budget, misunderstands the nature of the rebate.5 
The UK rebate is not a constant, annual lump sum amount that can be divided or shared. It is a 
function of the UK’s respective shares in the EU economy and receipts. Any change in the size 
of the UK economy and receipts (for example as a result of Scottish independence) would be 
automatical y reflected in the rebate calculation, with the new amount relating to the continuing 
5  Scotland’s Future: Your guide to an independent Scotland, Scottish Government, November 2013 

Executive summary  9 
UK excluding Scotland. There would be no ‘Scottish share’ of the UK rebate left. For it to be 
otherwise would require a change to the rules relating to budgetary corrections such as the UK 
rebate. This would need the unanimous agreement of all Member States. 
Conclusion 
The analysis in this paper shows how Scotland benefits from the UK’s historic role and presence 
in world affairs, and how the UK promotes and protects Scotland’s interests global y. 
This paper sets out the clear benefits to Scotland as part of the UK of how the size and reach 
of the UK’s diplomatic network delivers for Scottish interests. It highlights the expense to 
taxpayers in Scotland of establishing and maintaining a separate Scottish diplomatic network, 
and that access to some UK services, such as international support for Scottish businesses, 
would cease. 
The terms of EU membership which the Scottish Government has said it wishes to secure is 
at odds with long-established conditions of EU accession; the problematic nature of some of 
the specific asks that the Scottish Government has said it intends to make may well render 
negotiations complex and lengthy, raising questions over whether they could be completed 
within the 18-month timeframe suggested by the Scottish Government. Terms of EU 
membership also require the unanimous agreement of all 28 Member States. 
Scotland would lose out financial y in EU funding as an independent Member State of the EU. 
It would receive less in Structural Funds during 2014–20, and lose the benefit of the UK’s 
rebate. Scotland would, instead, have to contribute to the UK’s rebate like other Member States. 
Ultimately, Scotland’s taxpayers would pay significantly more to the EU than they do now. 
Crucial y, formal independence is likely to mean greater dependence on larger states, such as 
the continuing UK, and through al iances with other countries. 
At present, people in Scotland have an absolute entitlement to international representation 
provided by the UK Government. In the event of a vote for independence, Scotland’s taxpayers 
would be likely – because of start-up and running costs – to have to pay more for their 
international representation, and the UK would no longer have any obligation to represent 
Scottish interests on the international stage. While an independent Scottish state and the 
continuing UK may choose to cooperate on issues of mutual interest, this cooperation could 
not be guaranteed. 


Introduction 
Scotland has played a prominent role in the world throughout its history. Its people have 
travel ed to all corners of the globe, taking its culture and its reputation with them. Its companies 
trade international y, and people from across the world visit Scotland every year. For 300 years, 
Scotland has shared a global outlook with the rest of the United Kingdom (UK), and its people 
are an integral part of the UK’s international effort. The UK Government believes that Scotland is 
better off as part of the UK, and that the UK is stronger with Scotland in it. 
The referendum on independence presents one of the most important decision points in 
both Scotland’s and the rest of the UK’s history. It is important that the debate ahead of the 
referendum is informed by wider analysis, and that the facts that are crucial to considering 
Scotland’s future are set out. 
Not all of the answers can be known in advance of the referendum. This is because some of 
the details can only be established through negotiations between the representatives of an 
independent Scottish state, the continuing UK and other bodies, for example the European 
Union (EU). These negotiations would have to take place in the event of a vote for Scottish 
independence. 
The objective of the UK Government’s Scotland analysis programme is to provide 
comprehensive and detailed analysis of Scotland’s place in the UK and how that would be 
affected by independence. The outputs of this analysis will provide sources of information 
and aim to enhance understanding on the key issues relating to the referendum. As such, the 
programme should be a major contribution to the independence debate. 
The first paper in the series, Scotland analysis: Devolution and the implications of independence
set out in detail the UK Government’s position, and the legal opinion informing it, on the standing 
of a newly independent Scottish state in international law. The expert legal opinion in the paper 
made clear that in international law Scotland would be considered an entirely new state in the 
event of a vote in favour of leaving the UK, with the rest of the UK continuing the UK’s legal 
personality. This would mean that the UK’s membership of key organisations (including the 
EU, the North Atlantic Treaty Organization (NATO), the International Monetary Fund (IMF), G8 
and G20) and involvement in treaties would be largely unaffected by Scottish independence; 
whereas, as a new state, an independent Scotland would be required to apply and negotiate 
to become a member of whichever international organisations it wished to join. The paper 
also argued that the UK’s key national institutions, including its diplomatic, consular and trade 
promotion services, would operate on behalf of the continuing UK as before, but would have no 
power to act in or on behalf of an independent Scottish state, and no obligation to create the 
structures to do so.1 This paper fol ows both these core arguments. 
1  Scotland analysis: Devolution and the implications of Scottish independence, HM Government, February 2013 

12  Scotland analysis: EU and international issues 
The scope of this paper 
This is the ninth paper in the Scotland analysis programme. It presents the UK Government’s 
analysis of the international implications of the debate on Scottish independence. It considers 
how the UK Government’s international policy is formed, and reviews the UK’s international 
interests in making Britain more secure and prosperous, keeping its citizens safe when they 
travel, and helping its companies trade with the rest of the world on the best possible terms. It 
looks at the role the UK plays in making the world a better place, combating poverty and the 
abuse of human rights. It considers how the UK’s global diplomatic network and its ‘soft power’ 
– its brand, reputation or attractiveness in other societies – help it achieve these objectives. It 
considers in depth the issue of an independent Scottish state’s EU membership, including the 
issues that would be important in a membership negotiation and the likely impact on Scotland’s 
contributions to the EU budget. 
Although not the focus of this paper, the UK’s relationship with the EU is relevant to the debate. 
The UK Government’s position is that it wants the UK to remain part of a reformed EU. The 
UK Government is setting out a positive vision for a reformed EU which is more competitive, 
more flexible and more democratical y accountable. The UK Government has secured and will 
continue to secure reform in the EU that is in the best interests of all Member States and people 
in the UK. In 2013, for instance, the UK Government secured important reforms to the Common 
Fisheries Policy to abolish the policy of ‘discarding’ caught fish, which will benefit Scottish 
fisheries for years to come. The UK Government also negotiated the first real cut to the EU’s 
multiannual budget, and the first ever exemption of micro-businesses from new EU proposals 
from 1 January 2013.2 
The need for EU reform is widely accepted. The UK is working closely with other Member States 
such as Germany, Ireland, the Netherlands, Sweden and others on how to take ideas for reform 
forward. The First Minister of Scotland has also recognised that “there are clearly areas where 
the EU needs to reform”.3 The UK, as one of the largest EU Member States, is likely to be better 
placed to secure EU reform for the benefit of the whole of the UK, as well as other EU Member 
States, than an independent Scottish state would be as an applicant to or new Member State 
of the EU. 
Devolution and foreign affairs 
International relations are conducted between sovereign states, which are equal in the eyes of 
international law. In even the most decentralised state structures, foreign affairs and defence are 
therefore reserved for the central government. International relations, including relations with the 
EU and other international organisations and international development assistance, are reserved 
to the UK Government under the terms of the legislation which created the Scottish Parliament 
and Government.4 This means that the UK Government, as government of the sovereign state, 
represents the people of the UK on the world stage. 
2  Businesses in Scotland 2013 published by the Scottish Government in October 2013 states: As at March 
2013, there were an estimated 343,105 private sector enterprises operating in Scotland. Almost all of these 
enterprises (98.3%) were small (0 to 49 employees); 3,705 (1.1%) were medium-sized (50 to 249 employees) and 
2,270 (0.7%) were large (250 or more employees).” See: www.scotland.gov.uk/Resource/0043/00437279.pdf 
3  The First Minister of Scotland, Alex Salmond in his speech of 21 August 2013: http://news.scotland.gov.uk/ 
Speeches-Briefings/Speech-at-Hawick-Summer-Cabinet-on-SoundCloud-34d.aspx 
4  Scotland Act 1998, Chapter 46, Schedule 5, paragraph 7 

Introduction  13 
International relations impact on many aspects of domestic policy, particularly in the economic 
sphere. In these areas (e.g. trade promotion or fisheries agreements) the Scottish Government 
has responsibility for policy as it affects Scotland, and the UK and Scottish Governments work 
closely together to promote the interests of people and businesses in Scotland at EU and 
international level. 
The UK’s constitutional arrangements mean that people in Scotland benefit from the UK’s 
strength on the world stage, while having a devolved government in Edinburgh that is able to 
pursue the international aspects of its policies for Scotland alongside, and with the support of, 
the UK Government. The Scottish Government’s International Framework document sets out 
its aims in promoting Scotland as a destination for investment, trade, education and tourism, 
working with priority countries such as Canada, the United States, China, India and Pakistan; 
and the activities of Scottish Development International and UK Trade & Investment, and of 
the Scottish Government’s development programme in Malawi and the UK’s Department for 
International Development, mutual y reinforce each other.5 
British diplomatic missions worldwide support Scottish Government Ministers and officials when 
they travel overseas in pursuit of their devolved policy responsibilities, providing logistical and 
political assistance and securing them access to the people they need to speak to. Some also 
include Scottish Government officials on their diplomatic staff. All British diplomatic missions 
routinely promote Scotland’s International interests and the Scottish brand, as well as those 
of the other nations of the UK. The Scottish Government’s International Framework document 
acknowledges the importance of the UK Government’s representation overseas in delivering 
for Scotland as part of the UK: “We will continue to make full use of the UK resources at our 
disposal. In particular, we will work with the Foreign and Commonwealth Office network and 
UK Trade and Investment around the world to maximise business, cultural and educational 
opportunities for Scotland. We will also engage directly with the British Council, so that we can 
effectively showcase Scotland’s cultural and educational excellence abroad.” 

Small states on the world stage 
An independent Scottish state could, like other small states, be a successful player on the 
international stage. The important question is whether it would be more successful in promoting 
the interests of people and businesses in Scotland international y than the UK currently is. 
Academic theories of international relations tend to recognise that while small states can play an 
international role out of proportion to their size, particularly in specialist areas, they are political y, 
militarily and economical y more vulnerable than larger states, and therefore seek protection 
through close relationships with larger neighbours or through memberships of international 
organisations and al iances.7 
5  Scotland’s International Framework, Scottish Government, October 2012, www.scotland.gov.uk/ 
Publications/2012/10/3096/4 
6  Scotland’s International Framework (updated October 2012), www.scotland.gov.uk/ 
Publications/2012/10/3096/0 
7   Bailes AJK, Thorhal sson B and Johnstone RL, ‘Scotland as an Independent Small State’, Icelandic Review 
of Politics and Administration (2013) 9(1); supplementary written evidence from Catarina Tul y, Director, 
FromOverHere published in the Foreign Affairs Committee report Foreign policy considerations for the UK and 
Scotland in the event of Scotland becoming an independent country
, HC 643 2012–13, May 2013, Ev 110 

14  Scotland analysis: EU and international issues 
This can mean that they are more constrained in their choices on the international stage 
than larger states. The Director of the Centre for the Study of Public Policy at the University 
of Strathclyde has noted that “the lack of the ‘hard’ power of military force and a large Gross 
Domestic Product forces small states to rely on ‘smart’ power, that is, a conscious strategy of 
engaging with other counties in order to call attention to common interests that may be pursued 
for common advantage. While Scotland has the advantage of being an internationally known 
‘brand’ that may help to open doors abroad, this is insufficient to seal deals.” 

Therefore, an independent Scottish state may find itself continuing to need to work with, 
and through, the UK. As a separate state, the UK would no longer have any obligation to 
use its resources to represent Scottish interests as it currently does. The government of an 
independent Scottish state would have to consider how to replicate those resources – not just 
budgets, buildings and people, but a country’s presence on the international stage – to deliver 
its international policy. 
As well as outlining the UK’s current international activity and the benefits it brings for people 
and businesses in Scotland, this paper examines some of the choices an independent Scottish 
state would need to make in the event of a vote for independence. 
The structure of this paper 
•   Chapter 1 sets out the UK’s current international policy, its role in key organisations 
and the benefits to Scotland. It analyses how independence may affect an 
independent Scottish state’s capacity for action and influence overseas. 
•   Chapter 2 examines the delivery of that policy for the whole of the UK, including 
Scotland, through formal and informal networks and relationships. It looks at the 
considerations for an independent Scottish state in seeking representation at a 
bilateral and multilateral level. 
•   Chapter 3 looks at the issue of EU membership, a key consideration for an 
independent Scottish state. The chapter examines how the terms of an independent 
Scottish state’s membership may be negotiated and analyses the potential impact on 
Scottish contributions to the EU’s budget. 
•   The annexes provide detailed information on the EU budget analysis, the UN 
Specialised Agencies and other international organisations, and set out a brief analysis 
of countries of a similar size to an independent Scottish state. 
Other aspects of international policy in its widest sense are only considered briefly in this paper. 
Separate papers in the Scotland analysis series have covered defence and security matters. 
8   Written evidence from Professor Richard Rose, Director, Centre for the Study of Public Policy, University of 
Strathclyde, Glasgow published in the Foreign Affairs Committee report Foreign policy considerations for the UK 
and Scotland in the event of Scotland becoming an independent country
, HC 643 2012–13, May 2013, Ev 101 


Chapter 1: 
The UK’s international policy 
•   The UK has a unique and historic role in world affairs, with a range of international 
interests that it pursues on behalf of all of its people. These include enhancing the 
UK’s security and prosperity, and promoting shared values, such as democracy 
and human rights and the fight against poverty. A secure and stable world is in 
the interests of Scotland and the whole of the UK, and Scotland, as part of the 
UK, is well placed to work towards it. 
•   People in Scotland benefit from the UK’s influence on the world stage, while 
having a devolved government in Edinburgh that is able to pursue the international 
aspects of its policies for Scotland alongside, and with the support of, the UK 
Government. It would be for the government of an independent Scottish state to 
decide what its foreign, national security and defence policies would be. Whatever 
choices it made, an independent Scottish state could lose significant benefits that 
Scotland is currently entitled to as part of the UK. 
•   The North Atlantic Treaty Organization (NATO) has confirmed that an independent 
Scottish state would need to apply for membership and the North Atlantic Council 
would decide whether it met the membership criteria. Any decision would be 
subject to consensus approval by all NATO’s 28 members. 
•   As one of the world’s largest economies, the UK is a member of the G7, G8 
and G20 – the key bodies of global governance. Its membership contributes 
to the UK’s strong voice in world affairs, from economic, finance and trade 
policy to social, security and environmental issues, all of which are important to 
Scotland. An independent Scottish state would not be eligible for individual state 
representation at these bodies, but could be represented as part of the European 
Union (EU), once it had become an EU Member State. 
•   The UK works internationally to promote and protect the economic interests of 
businesses based in Scotland – for example defending Scotch whisky against 
counterfeits, discriminatory or excessive taxation, trade barriers and other 
restrictions. Scottish businesses benefit from the active support of UK Trade 
& Investment’s (UKTI’s) 169 offices in over 100 countries. Businesses in an 
independent Scottish state would lose access to the UKTI network and the 
political weight the UK can bring to champion them. 

18  Scotland analysis: EU and international issues 
•   When they travel, people in Scotland have access to UK consular representation 
in over 144 countries, with more than 800 ful -time staff working on consular 
issues at any one time, delivering a comprehensive service to British citizens 
who find themselves in difficulty overseas. Although the Scottish Government 
has stated it would build on its existing Scottish Development International (SDI) 
network in 16 countries (which has trade rather than consular expertise) and 
appoint Honorary Consuls to represent Scottish interests, it is likely, at least in the 
short term, that citizens of an independent Scottish state would be dependent on 
other countries for consular assistance.1 An independent Scottish state would be 
responsible for its citizens in any country where it had representation of any kind. 
What is ‘international policy’? 
1.1   Every state has interests that it can only pursue by virtue of its relations with other states. 
The most fundamental is the security of the state and its population from external threats. 
In an open economy the state must also ensure that its firms have the freest possible 
access to foreign markets. And states must do what they can to protect their citizens 
when travel ing abroad. 
1.2   In addition, in many countries, citizens expect their state to do more than simply promote 
its own interests. The people of richer countries will often want their state to try and help 
the governments of poorer countries provide a better future for their own people. Citizens 
of free societies will expect their state to promote and project their values of human rights 
and democratic government, and to hold to account those countries which deny their own 
people those rights. And many people feel it is the responsibility of states that are able to 
intervene in other parts of the world to prevent oppression and genocide, to do so. 
1.3   The UK is no different. Its people – whatever part of the country they come from – expect 
their government to keep them safe from external threats, promote growth and prosperity 
through international trade, protect them when they travel abroad, and act in a way that 
reflects their values and identity and extends the benefits of a free and prosperous society 
to their fel ow human beings wherever they are in the world. 
1.4   This chapter discusses these different aspects of the UK’s international policy, the 
benefits they bring for people and businesses in Scotland, some of the implications of 
independence for Scotland’s interests in the world, and the choices an independent 
Scottish state would face in formulating its international policy. 
Protecting the UK from external threats 
1.5   In determining its defence and security needs, any state has to assess the threats 
and risks it faces, prioritise them and decide how it will tackle them. In a world which 
is increasingly interconnected and interdependent, the UK is an open, outward-facing 
state that depends on trade and whose citizens live all over the world. This brings great 
opportunities, but also vulnerabilities. Like most other countries, the whole of the UK, 
including Scotland, faces a diverse and unpredictable range of threats and risks, many of 
which come from overseas and require an international and proactive response. 
1  Scotland’s Future: Your guide to an independent Scotland, Scottish Government, November 2013 

Chapter 1: The UK’s international policy  19 
1.6   The UK Government’s 2010 National Security Strategy2 identifies the priority risks to the 
UK as a whole, with four assessed as being of greatest concern: 
•   international terrorism affecting the UK or its interests; 
•   hostile attacks upon UK cyber space; 
•   a major accident or natural hazard; and 
•   an international military crisis between states, drawing in the UK and its al ies as well 
as other states and non-state actors. 
1.7   The Scotland analysis papers on defence and security consider these issues in more 
depth. This section considers the importance of the UK’s international relationships in 
protecting the UK from external threats. 
1.8   The UK’s security is underpinned by several factors. These include strong institutions that, 
in many areas, are world-class and deliver economies of scale and embedded cross­
governmental links between those institutions. This domestic architecture is supported 
and enabled by the UK’s international and inter-governmental networks including 
membership of a range of international organisations and al iances; its relationships across 
the intel igence world, including with key international partners; and technological and 
human capabilities. None of these networks can be taken for granted, and they have been 
painstakingly created over many years. The UK, and its constituent nations, benefit hugely 
from these arrangements. 
1.9   The UK maintains a firm commitment to collective security through a rules-based 
international system, and through a strong network of international al iances and 
relationships. This includes traditional al ies such as the United States (US) and France, 
Norway and Denmark, as well as other states such as India, Turkey, Japan and the 
Gulf states. It also includes a range of al iances, from NATO and the EU to the G8 and 
G20; from its permanent seat on the United Nations Security Council to its leading 
positions in the Commonwealth and the Organization for Security and Co-operation in 
Europe (OSCE). The UK’s objective is to broaden and deepen the UK’s strategic security 
partnerships with its traditional al ies, emerging powers and key global partners through 
defence engagement, diplomatic dialogue and capacity-building support to build trust, 
understanding and mutual support, to help reduce threats to the UK from unstable parts 
of the world. 
1.10   The global reach of its diplomatic network al ows the UK to benefit from a greater 
understanding of the situation on the ground across the globe, and al ows the UK to help 
respond to changes and al eviate potential threats at source before they reach the UK. The 
UK’s diplomats work with development experts to improve security in unstable areas of 
the world; with intel igence agencies, in detecting possible threats to the UK; with civilian 
and military defence col eagues, in helping to stabilise fragile states and regions. The UK 
Government’s Stabilisation Unit, formed between the Foreign and Commonwealth Office 
(FCO), the Department for International Development (DFID) and the Ministry of Defence 
(MOD), works to ensure an integrated, comprehensive approach wherever it is necessary. 
2  A Strong Britain in an Age of Uncertainty: National Security Strategy, HM Government, October 2010, 
www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_191639.pdf 

20  Scotland analysis: EU and international issues 
1.11   The UK continues to play a leading, constructive role in a number of international security 
regimes, working with international partners to shape global rules and norms, and to 
mitigate threats to the UK by strengthening global rules. These include measures such 
as the Treaty on the Non-Proliferation of Nuclear Weapons, the Chemical Weapons 
Convention, the Treaty on Conventional Armed Forces in Europe and the Arms Trade 
Treaty (ATT) – all of which the UK played a leading role in negotiating. 
1.12   Scotland analysis: Security shows how Scotland benefits from the UK’s extensive security 
and intel igence, law enforcement and protective security machinery – both domestical y 
and overseas – while preserving the distinct Scottish legal system. This constitutional 
setup brings benefits to all who live in the UK. While an independent Scottish state and 
the continuing UK might of course cooperate on issues of mutual interest, geographic 
proximity and historical relations would not guarantee continued access to the UK’s 
security and intel igence capabilities. International intel igence sharing depends on making 
a contribution valued by partners and on mutual trust, both of which an independent 
Scottish state would need to establish. Scotland would lose the economies of scale 
intrinsic to the existing UK-wide arrangements and therefore may have to accept less 
efficient and effective capabilities. 
1.13   An important part of dealing with the threat of international terrorism is effective measures 
for tackling money laundering and terrorism financing. The UK is a founding member of the 
Financial Action Task Force (FATF), the body that sets the global standards in these areas, 
including those for financial institutions on customer due diligence requirements, record 
keeping and supervision.3 Countries seek membership to demonstrate commitment to 
robust anti-money laundering and counter-terrorism financing regimes, to play a part in 
setting FATF standards, and to take part in the mutual evaluation process which assesses 
jurisdictions’ compliance with those standards. As such, an independent Scottish 
state may still want to be a part of FATF. However, there is currently a moratorium on 
membership. FATF has set up a working group to consider the question of whether FATF 
should expand, and if so on what grounds. It is therefore not yet possible to say whether 
an independent Scottish state would meet the admission criteria as these are yet to be 
agreed by FATF. Membership of a FATF-style regional body such as MONEYVAL4 would 
present an alternative option if an independent Scottish state failed to meet the admission 
criteria for FATF, or if FATF chose not to expand at a time when an independent Scottish 
state was seeking membership. 
1.14   The current UK external border is control ed and managed by the UK Border Force and 
the UK Visas and Immigration and the Immigration Enforcement commands within the 
Home Office. They are assisted by the National Crime Agency (NCA), the police, and the 
security and intel igence agencies and their international liaisons. They work to protect 
the citizens of the UK from the threats of terrorism, organised crime and il egal migration. 
They work throughout the UK and overseas, operating in over 130 countries to facilitate 
legitimate travel by issuing visas while stopping or removing those who have no right to be 
in the UK. An independent Scottish state and the UK could agree to col aborate closely but 
that col aboration, between two independent states, is unlikely to be as effective or efficient 
as the current arrangements. An independent Scottish state would be required to make 
decisions about how to manage the flow of people and goods across its borders. These 
issues will be explored in more detail in future papers in the Scotland analysis series. 
3   FATF was founded by the G7 in 1989. More information can be found on the FATF website: 
www.fatf-gafi.org/pages/aboutus/historyofthefatf/ 
4   The Committee of Experts on the Evaluation of Anti-Money Laundering Measures 

Chapter 1: The UK’s international policy  21 
1.15   Different countries make different choices about the global security contribution they 
wish, or are able, to make. Some, such as Sweden, Ireland and Austria, choose to 
remain neutral, outside al iances such as NATO, and to restrict their role to peacekeeping 
operations under the auspices of the UN. Others can, and do, make an important 
contribution to wider global security objectives. To do so, however, requires strong 
al iances and credible, well funded and equipped armed forces in order to contribute 
effectively to the shared commitment to col ective defence, through burden-sharing 
and pooling of capabilities. Annex D contains a table of comparator countries of 
a similar size to an independent Scottish state. Further detail can also be found in 
Scotland analysis: Defence
1.16   While an independent Scottish state might seek to engage in cooperative security and 
defence arrangements (as the UK does today), as a new state its capability and credibility 
would be unproven. This may create complications for establishing new relationships and 
partnerships and require significant time, resource and investment to match the current 
benefits it currently has as part of the UK. 
The North Atlantic Treaty Organization 
NATO’s fundamental and enduring purpose is to safeguard the freedom and security of all 
28 members by political and military means. The UK is a significant contributor to NATO in 
political, military and financial terms. In 2011, the UK remained the second largest military 
spender in NATO after the US, and one of only three NATO countries which met the 
NATO target of spending the equivalent of 2 per cent or more of Gross Domestic Product 
on defence. This leads to significant influence within the al iance as well as the col ective 
resources and security the al iance provides to members. 
In October 2012*, the Scottish National Party (SNP) revised its stance on NATO membership 
and suggested that an independent Scottish state would remain in NATO, provided NATO 
“takes all possible steps to bring about nuclear disarmament”. While this long-term goal 
is not incompatible with the aspirations of NATO and its members, it would be for an 
independent Scottish state to reconcile its policy on nuclear weapons with NATO’s Strategic 
Concept, agreed by all al ies, which states that “NATO will remain a nuclear al iance for as 
long as nuclear weapons exist”. 
Previous SNP statements** that “on independence, Scotland will inherit its treaty obligations 
with NATO” are incorrect. NATO has confirmed† that an independent Scotland, as a new 
state, would need to apply for membership and the North Atlantic Council would decide 
whether it met the membership criteria. Any decision would be subject to consensus 
approval by NATO’s 28 members. NATO’s position was accepted by Keith Brown, 
the Scottish Government’s Minister for Transport and Veterans, in evidence to the UK 
Parliament’s Defence Select Committee on 2 July 2013. NATO is also discussed in 
Scotland analysis: Defence
*   SNP members vote to ditch the anti-NATO policy, BBC News Scotland, 19 October 2012, 
www.bbc.co.uk/news/uk-scotland-scotland-politics-19993694 
**  NATO resolution passed at SNP party conference in Perth in October 2012 
†   Scottish independence: Alex Salmond ‘certain’ on NATO membership, BBC News Scotland, 10 April 2013, 
www.bbc.co.uk/news/uk-scotland-scotland-politics-22089955 
1.17   Most countries work together where they have complementary requirements and 
capabilities. The UK works closely with security al ies through NATO and its bilateral 
relationships. For example, France’s role in NATO and as a permanent member of the UN 
Security Council make it the UK’s leading foreign and security policy partner in Europe. 

22  Scotland analysis: EU and international issues 
The bilateral defence relationship includes very close working, even in areas of sovereign 
sensitivity – for instance, on nuclear issues. The Lancaster House Treaty of 2010 has 
brought the UK’s and France’s defence forces even closer together.5 In terms of foreign 
policy, the UK is closely aligned with the French on many issues such as Syria, Iran, the 
Middle East Peace Process and Mali. In addition, France and the UK have significant 
shared commercial and economic interests in the energy and other sectors. 
The Arms Trade Treaty (ATT) 
In June 2013, the UK, France, Germany and Brazil signed the world’s first legal y binding 
treaty to regulate the arms trade. The introduction of the ATT has been a top priority for the 
UK Government and it worked at an international level for a robust agreement that could 
achieve the broadest possible support. The ATT will make a difference. By introducing 
international y agreed standards for the arms trade it will reduce human suffering by 
preventing arms from being used in serious violations of human rights and international 
humanitarian law. It will also help to combat terrorism and crime by steadily reducing the 
unfettered proliferation of weapons. A properly regulated arms trade will help states to 
meet their legitimate defence and security needs to protect their citizens. Since opening 
for signature on 3 June, over 70 states have signed the treaty and Iceland has become the 
first to complete ratification. Scotland, as part of the UK, is currently playing an active role in 
driving this agenda forwards. 
UK growth and prosperity 
1.18   There are four main channels through which the UK Government delivers on its 
commitment to generating growth and prosperity for the whole of the UK, including 
Scotland: 
•   open markets – where the UK promotes market access and fights protectionism 
and corruption; 
•   trade – where the UK works to break down barriers to trade and promote free trade 
agreements, such as its active role in launching the EU/US Transatlantic Trade and 
Investment Partnership (TTIP) in July 2013, which is expected to add £10 bil ion to the 
UK’s economy; 
•   transparency – where promoting transparent and inclusive institutions for open 
societies and open economies delivers benefits for the UK; and 
•   security – where the UK works to deliver a secure global energy supply and a 
sustainable low carbon economy; mitigates threats to growth from global resource 
volatility, il icit financial flows and cyber attacks; and manages political crises in pursuit 
of global economic stability. 
5  The 2010 UK–France summit saw the signing of the Defence and Security Co-operation Treaty (the Lancaster 
House Treaty)See: www.gov.uk/government/news/uk-france-defence-co-operation-treaty-announced--2 

Chapter 1: The UK’s international policy  23 
Promoting economic wel being through international cooperation 
1.19   Effective international cooperation is a vital component in promoting the UK’s economic 
wel being. As one of the world’s largest economies, the UK is a member of the G7, G8 
and G20. Within these institutions the UK has the power to shape responses to global 
issues, and played a leading role in the response to the financial crisis; the UK chaired the 
G20 in 2009 and continues to play a leading role in the decisions it takes. Its membership 
contributes to the UK’s strong voice in world affairs, from economic, finance and trade 
policy to social, security and environmental issues, all of which are important to Scotland. 
The G20, G8 and G7 
1.20  The G20 is the premier forum for international economic cooperation and is unique in 
bringing together the political leaders of the world’s major economies − advanced and 
emerging alike − on an equal footing. The UK’s place at the G20 table ensures that 
Scottish interests are represented when key decisions and agreements which affect the 
global economic system are made. G20 members are the world’s major economies, 
accounting for 85 per cent of global economic output and 80 per cent of global trade. 
The G20 played a vital role in shaping the global response to the economic crisis which 
began in 2008. It covers major economic issues including global financial regulation, 
anti-corruption, energy, labour and jobs, and development. Through chairing the G20 in 
2009, the UK shaped the global response to the financial crisis and the policies that were 
agreed at a vital moment to prevent a greater global downturn. The G20 has continued to 
shape the global response to the world economic downturn and support strong, sustainable 
and balanced growth. This includes agreement to refrain from protectionism, which could 
harm export-led markets; to reform the global financial system, which affects the financial 
services industry; and, ultimately, to support strong, sustainable and balanced growth in the 
global economy. The UK, representing Scotland’s large financial services industry and proud 
trading history, is a key participant in the global economy. 
1.21  The G8 remains a leading forum in which economic, political and security issues are 
discussed, al owing the UK a seat at the table where global responses to foreign policy 
and development issues are formulated. The G8 (which comprises Canada, France, 
Germany, Italy, Japan, the UK, the US and Russia) has a broad agenda, covering the key 
global chal enges of the day, including foreign policy, while the G7 (which Russia does not 
attend) traditional y discusses economic issues. The G7 and the G8 represent around half 
of global Gross Domestic Product (GDP), and are key opportunities for the UK to project 
its international objectives and make its voice heard. The G8’s work on the trade, tax and 
transparency agenda under the UK’s Presidency this year, for example, will have a lasting 
impact on these issues in the UK and global y. Improving international standards will al ow 
countries to col ect tax that is due to them, al owing them to strengthen public services in 
areas such as health and education. It will protect public finances and improve confidence 
in the global economic system. 

24  Scotland analysis: EU and international issues 
1.22  Each country takes its turn to hold the rotating Presidency of the G7/8 every eight years 
and can bid every four years to host the G20. The UK holds the Presidency of the G7 and 
G8 in 2013 and also held the G20 Presidency in 2009 (at the height of the global financial 
crisis). In 2005, the UK Government hosted the G8 in Gleneagles, Scotland. In June 2013, 
the UK hosted the G8 summit in Lough Erne, Northern Ireland, where leaders announced 
the start of negotiations on the TTIP, a once-in-a-generation opportunity that will increase 
trade between the US and the EU – the two largest economies in the world. The benefits 
to the UK could be worth up to £10 bil ion a year, or more than £380 per UK household.6 
1.23  Scotland is represented by the UK’s individual state participation in discussions with the 
world’s leading economic powers, at the G7, G8 and G20 and the International Monetary 
Fund (IMF). This representation would cease under independence: the size and strategic 
significance of an independent Scottish state’s economy would not warrant its inclusion as 
an individual state among the leading economies of the world. An independent Scottish 
state could be represented at the G7, G8 and G20 as part of the EU representation, 
once it has joined the EU. Its position would have to be agreed with the rest of the EU 
membership whereas the UK speaks for itself (in close coordination with EU partners) at 
G7, G8 and G20 meetings. Should an independent Scottish state apply to join the IMF 
it is unlikely to be represented by a single seat, as is the case with the UK. As with other 
small states, it would be likely to be required to join an IMF constituency, most likely one 
representing other European countries. Another option would be to form a constituency 
with the UK. Annex C looks at the terms of membership of the main international 
organisations of which the UK is a member in more detail. 
Promoting trade and investment 
1.24   ‘Commercial diplomacy’ is central to the UK Government’s prosperity agenda, bringing 
together the Government’s international activity in support of the UK economy, aligning UK 
foreign policy goals with the Government’s overall objective of returning the UK to strong 
economic growth and using diplomacy to help create and promote the conditions for that 
growth through trade and investment. The UK is managing a significant shift of network 
resources to strengthen bilateral and regional relationships with key emerging powers, 
which will contribute to the UK’s longer-term prosperity and capacity to tackle chal enges 
such as corruption, climate change and transparency (for example through the UK Bribery 
Act 2010). 
1.25  UK Government departments such as the FCO, the Department for Business, Innovation 
and Skil s (BIS) and UKTI work in partnership to help create and promote the conditions 
for growth through international trade and investment. Together they are able to support 
business by providing high level political and economic analysis and access to decision 
makers around the world; identifying new business opportunities; sharing intel igence and 
managing risk through expert knowledge of the local political and economic environment; 
using inward and outward high level visits to lobby on behalf of UK interests and trade 
opportunities; supporting UK trade missions around the world; and coordinating 
government relationships with key businesses to help remove barriers to international trade 
and investment. 
6   Estimating the Economic Impact on the UK of a Transatlantic Trade and Investment Partnership (TTIP) 
Agreement Between the European Union and the United States, Department for Business, Innovation and 
Skil s, 13 May 2013 

Chapter 1: The UK’s international policy  25 
Case study: Scottish power company contract in Southern Africa 
The UK’s diplomatic and trade networks were instrumental in helping a leading Scottish 
power company to land energy contracts in Southern Africa worth in the region of 
£140 mil ion. The company, employing 400 people in Scotland, was introduced to the 
Mozambican Ministers for Energy and Trade at a UKTI trade event in Johannesburg. The 
company’s Chief Executive Officer was also part of the Prime Minister’s business delegation 
on his visit to South Africa, where the delegation was introduced to the South African 
Minister for Trade and to the President. 
These contacts, initiated by the UK, led to the setting up of an energy agreement in which 
the Scottish company constructed a power plant in Mozambique near the South African 
border – the first cross-border, interim Independent Power Provider to the Southern 
African Power Pool, which is one of the largest interconnected grids in the world linking the 
power networks of nine countries in Southern Africa. The plant started power production 
in July 2012, supplying electricity to Mozambique and South Africa. The long-term value 
of the project, which will also involve power supply to Namibia, is likely to be in excess of 
£140 mil ion. 
1.26  UKTI7 is a joint, non-ministerial government department of the FCO and BIS. UKTI teams 
support businesses throughout the UK in trading international y and identify high value 
business opportunities for the UK around the world. It has over 1,200 officers in 169 
offices in over 100 countries. UKTI’s work is supplemented by the UK’s wider diplomatic 
and consular network, which also is able to help UK businesses in smal er markets where 
UKTI is not directly represented, as well as lobbying governments to improve market 
access and the business environment for UK products and services. Businesses from all 
parts of the UK, including Scotland, therefore benefit from UKTI’s expertise in country and 
market sectors, and the UK’s unparal eled reach, access and influence across the world.8 
This level of access and support would change for businesses based in an independent 
Scottish state as they would lose access to the UKTI global network. 
7   More information about UKTI’s work is available at: www.ukti.gov.uk 
8   Events designed to encourage inward investment to the UK and promoting UK exports overseas are one of 
the UK Government’s main foreign policy priorities and since April 2011 the FCO has implemented a policy 
of not charging other Government departments for holding events in its network of posts overseas, except 
for passing on direct costs incurred by the FCO. Under the terms of the Memorandum of Understanding 
with the Scottish Government, the FCO applies the same policy for recovering costs of services provided to 
the Scottish Government as it does with UK Government departments. The FCO does not therefore charge 
Scottish Development International for holding events in FCO premises overseas, and only passes on direct 
costs incurred on its behalf by the FCO. UKTI’s main chargeable product is the Overseas Market Introduction 
Service, a bespoke service that puts businesses directly in touch with UKTI staff in overseas markets who 
provide tailored business advice, undertake research and support events and visits. A set of activities meeting 
each business’s needs will be discussed, developed and agreed with the UKTI adviser in the chosen overseas 
market. A price will be quoted based on the time required to deliver the work and will vary according to the 
country, the access to information in those markets and the type of activity required. UKTI’s charging policy 
applies to all companies wherever they are located in the UK. 

26  Scotland analysis: EU and international issues 
Case study: Food exports outside the EU 
Scottish salmon is Scotland’s largest food export.* The UK Government negotiates market 
access for UK agri-food products through the Department for Environment, Food and Rural 
Affairs (Defra) as the Competent Authority for the UK. An independent Scottish state with 
its own separate Competent Authority would need to renegotiate market access for its 
products as it could no longer export under UK export health certification. These market 
access procedures general y take several years to complete. Products to which sanitary and 
phytosanitary protocols apply (i.e. those that carry a potential risk to human, animal or plant 
health) cannot be exported without valid export health certification. 
The UK Government secured the inclusion of Scottish Farmed Salmon on a pilot list of ten 
EU Geographical Indication of Origin products to be granted protection in China. This means 
that Scottish salmon producers now have a legal basis to take action against companies 
sel ing salmon not produced in Scotland under the Scottish Farmed Salmon label in China. 
As well as giving support to visiting Defra officials in market access negotiations and helping 
Scottish companies with compliance issues (most often involving consignments of goods 
held at ports of entry due to regulatory or documentation problems), UKTI has actively 
promoted Scottish Farmed Salmon at a series of events. These included an EU–China Trade 
Project event in 2012 where Chinese officials from different provincial China Inspection and 
Quarantine Services (CIQs), who implement import-export controls on food at China’s ports 
of entry, were given presentations on Scottish Farmed Salmon, its production methods 
and its qualities. UKTI has also helped SDI secure the approvals needed to bring Scottish 
seafood into China for trade shows and other promotional events, most recently for a 
promotional event in Shanghai in summer 2013. 
*   Exports: The largest food export from Scotland, Scottish Salmon Producers’ Association, April 2013, 
www.scottishsalmon.co.uk/markets/exports.aspx 
1.27  Exporting is invariably a source of sustainable growth. Exports contribute about 
60 per cent of UK productivity growth and one in four jobs in the UK are linked to 
overseas business.9 In 2012, total UK goods exports were £296.2 bil ion, at least 
£17.4 bil ion (5.9 per cent) of which came from Scotland.10 
1.28  Support in Scotland for exports is currently delivered through a partnership between 
UKTI and SDI11 – a joint venture between the Scottish Government, Scottish Enterprise 
and Highlands and Islands Enterprise. This means businesses based in Scotland have the 
best of both worlds: access to the significant expertise and global reach of the UK, and 
the Scotland-specific focus of the SDI effort, which has 26 offices in 15 countries outside 
the UK.12 
9   BIS Economics Paper No.13: International Trade and Investment: The economic rationale for government 
support, May 2011, www.gov.uk/government/publications/the-economic-benefits-of-support-for-international­
trade-and-investment, page 56 

10   Regional Trade Statistics Archive, HM Revenue and Customs, www.uktradeinfo.com/Statistics/RTS/Pages/ 
RTSArchive.aspx 
11   Scottish Development International: Who we are, Scottish Development International, 2013, www.sdi.co.uk/ 
about-sdi/who-we-are.aspx 
12   SDI has offices in Australia, France, Germany, Denmark, Norway, Russia, Brazil, Canada, China, Japan, India, 
South Korea, Singapore, UAE and the US. 

Chapter 1: The UK’s international policy  27 
1.29  In the period 2012/13, UKTI teams both at home and overseas provided trade support 
(a total of more than 5,000 interactions) to over 1,900 companies and organisations 
across Scotland. Examples include 141 grants provided to Scottish firms through support 
under UKTI’s Tradeshow Access Programme and 288 Overseas Market Introduction 
Service services delivered on behalf of Scottish firms through UKTI overseas teams. 
Additional y, UKTI provides funding of £50,000 per annum to SDI under UKTI’s Market 
Visit Support (MVS) programme to support Scottish companies visiting overseas markets. 
In 2012/13, two Scottish missions (to India and South Africa) were supported under 
the MVS programme; for 2013/14, missions have already taken place to Brazil, China, 
UAE/Qatar and the US, and missions to Turkey and India are being planned. SDI also 
has the opportunity to participate in and host UKTI seminars and events as part of the 
UK-wide programme. 
1.30  UKTI’s Defence and Security Organisation (DSO) provides the essential government­
to-government relationships which underpin commercial campaigns in these sectors. 
According to DSO figures, in 2012 the UK’s share of the global defence market as 
measured by winning new defence business was 17 per cent, worth £8.8 bil ion13 and 
meaning that the UK maintained its position as the second largest exporter of new 
defence products and services in the world. Scottish companies, and multi-national 
companies with facilities in Scotland, benefit from access to this highly specialist resource. 
Scotland analysis: Defence considers the value of this industry to Scotland in more detail. 14 
13   UKTI DSO annual survey, DSO, 20 June 2013, www.ukti.gov.uk/uktihome/pressRelease/527180.html 
14   Scotland analysis: Defence, HM Government, October 2013, www.gov.uk/government/publications/scotland­
analysis-defence 

28  Scotland analysis: EU and international issues 
Case study: Scotch whisky 
Scotch whisky is the UK’s biggest export in the food and drink sector, total ing £4.3 bil ion 
in 2012. It is the number one global y traded spirit drink. Exports have grown by more than 
80 per cent over the last decade. The industry supports 35,000 jobs in Scotland. The 
Scotch Whisky Association (SWA) represents the industry around the world, working closely 
with the UK Government and, with its support, the European Commission. The SWA uses 
the UK’s global diplomatic network, with its excel ent local connections, knowledge and 
commercial expertise, to promote whisky exports and tackle barriers to trade. 
Defending Scotch whisky against counterfeit, discriminatory or excessive taxation, trade 
barriers and other restrictions is an important priority for UK diplomats. In 1996, with the 
support of the UK Government, the EU successful y chal enged Japanese excise taxes on 
alcoholic beverages which discriminated against Scotch whisky and other products in favour 
of the domestical y produced Shochu. The World Trade Organization (WTO) panel found in 
favour of the EU arguments and asked Japan to bring its tax policies into conformity with its 
obligations. Similar successful WTO cases were brought against Korea and Chile. 
Since then, the UK Government has provided strong support to the efforts of the SWA to 
remove and prevent a range of trade barriers across a large number of countries, notably 
India, Thailand, Uruguay and the Philippines. More recently, the UK acted swiftly in the 
interests of the Scotch whisky industry when all imported alcohol was banned from the 
Czech Republic and Slovakia, fol owing a counterfeit drinks scandal in 2012. The UK’s 
Ambassadors in those countries lobbied strongly against this, which helped to resolve the 
ban and al ow normal trade to resume. 
Outside the EU, in 2012 the UK’s missions in Brazil, China, Colombia, India, Indonesia, 
Mexico, Russia, South Korea, Taiwan, Thailand, Turkey and Vietnam supported the industry 
by working to have discriminatory barriers to whisky imports removed, intel ectual property 
laws improved and onerous customs procedures reduced. 
This work was recognised by the SWA which said: “the industry works closely with the UK 
Government. . FCO, BIS, UKTI, DEFRA, and the British Embassy network. The generally 
high quality level of support received over many years supports the industry’s market access 
ambitions. Working together, the industry and government can point to numerous trade 
barriers that have been removed, supporting the competitiveness of the sector.”

*   SWA written evidence to the Foreign Affairs Committee inquiry published in Foreign policy considerations 
for the UK and Scotland in the event of Scotland becoming an independent country, www.publications. 
parliament.uk/pa/cm201213/cmselect/cmfaff/643/64302.htm 

UK Export Finance 
1.31  UK Export Finance (UKEF) is the UK’s export credit agency (ECA). Its principal statutory 
purpose is to support exports. It does so mainly by providing insurance to UK exporters 
and guarantees to banks (in respect of export credit loans they make available to finance 
UK exports). This protects exporters against the risk of overseas buyers not paying them, 
and banks against the risk of loans not being repaid. UKEF’s remit is to complement the 
provision of finance and trade credit insurance available from the private market. In doing 
so it provides a level playing field for UK exporters, who are competing for export contracts 
with overseas companies that are able to get support from the ECAs in their respective 
countries. ECAs operate under a number of EU and Organisation for Economic 
Co-operation and Development (OECD) regulations and states are not permitted to 
subsidise the activities of their ECAs under WTO rules. 

Chapter 1: The UK’s international policy  29 
1.32  The amount of UKEF support that is provided in respect of contracts won by Scottish 
companies varies year by year depending on the success of those companies in winning 
overseas orders and whether UKEF support is required to make finance available or 
insure against payment risks. In the 2012/13 financial year, UKEF issued guarantees and 
insurance of some £51 mil ion in respect of companies that were based in Scotland. 
1.33  Scottish exporters would lose access to UKEF in an independent Scottish state. There 
would also be a transition issue over responsibility for the contingent liability of existing 
insurance and guarantees issued by UKEF to companies based in Scotland. It would be 
a matter for the government of an independent Scottish state to decide whether or not to 
have an ECA (Ireland, for instance, does not have one), and if so on the model for delivery 
that it wished to adopt. Under WTO rules, a Scottish ECA would need to charge an 
adequate premium for its services to cover its long-term operating costs and losses. 
Case study: UKEF Bond Support Scheme 
UKEF launched the Bond Support Scheme in March 2011 to increase capacity for contract 
bonds issued by banks on behalf of UK exporters. These bonds are a form of credit which 
enables companies to hold large export contracts. By sharing the risk of these bond issues 
by providing a partial guarantee to the issuing bank, UKEF is able to reduce the amount of 
col ateral needed by the exporter, thereby releasing cashflow to perform the export contract. 
An engineering company employing more than 800 people in Scotland found its cashflow 
restricted by its existing banking facilities and was finding it difficult to issue contract bonds 
for its overseas projects. This put it at a disadvantage international y when competing for 
export contracts. The Bond Support Scheme helped remove this barrier, al owing the 
company to protect ongoing contracts worth £35 mil ion and also helped it to secure 
additional contracts worth £2 mil ion. 
Foreign direct investment 
1.34  In 2012/13, the UK attracted 1,559 foreign direct investment (FDI) projects, which created 
or safeguarded 170,000 jobs. UKTI and its partners provided significant assistance in 
85 per cent of these projects.15 Some 13,519 jobs associated with 111 of these projects 
went to Scotland – 7 per cent of the total number of projects, and 8 per cent of the total 
jobs. UKTI was involved in 84 out of the 111 projects; 20 on its own, and 64 in partnership 
with SDI. SDI has full access to UKTI’s investment opportunities, so that where SDI 
believes Scotland has an appropriate offer, it is able to contribute to propositions being 
developed by UKTI for companies which are investigating coming to the UK. In the event 
of a vote for independence, an independent Scottish state would compete with the rest of 
the UK to attract FDI, and access to the pipeline would cease. Scotland analysis: Business 
and microeconomic framework
16 considers the importance of FDI to the UK, including 
Scotland, in more detail. 
15   Inward Investment Report, UKTI, 24 June 2013, 
www.ukti.gov.uk/investintheuk/uktipublications/item/553980.html 
16   Scotland analysis: Business and microeconomic framework, HM Government, 2 July 2013, 
www.gov.uk/government/publications/scotland-analysis-business-and-microeconomic-framework 

30  Scotland analysis: EU and international issues 
1.35  UKTI has a key policy-influencing role within the UK Government, representing the views 
of existing foreign direct investors in the UK, such as where they have identified potential 
barriers to investment resulting from new or amended legislation or regulation. SDI feeds 
into this on behalf of foreign investors based in Scotland, thereby having direct input into 
the regulatory framework of the UK, the number one FDI destination in Europe. 
Protecting British citizens abroad 
1.36  The extent of the UK’s connections overseas – particularly trading relationships and family 
ties – means that the UK maintains one of the most extensive and effective consular 
networks of any country in the world. Consular staff work for the protection of British 
citizens visiting or living overseas. Whenever things go wrong for British citizens abroad, 
they have access to one of the most comprehensive consular services in the world.17 
The UK has consular representation at 216 posts in 144 countries, with more than 800 
staff working on consular issues at any one time in the UK and abroad, serving British 
citizens who find themselves in difficulty overseas. This is supplemented by over 230 
Honorary Consuls. 
1.37  Honorary Consuls are volunteers who can help posts to provide a more accessible 
and responsive service to British and other nationals for whom the UK has consular 
responsibility abroad. They are usual y appointed in areas where the UK has no formal 
consular representation. They receive no salary from the FCO, but some are paid a small 
honorarium in recognition of their services. Honorary Consuls do not work independently 
but are tasked on all areas of their work by their superintending post. They are considered 
Consular Officers under the Vienna Convention on Consular Relations but do not perform 
all functions that a Diplomatic Consular Officer does; for example, they do not issue 
emergency travel documents. 
1.38  There are also 160 other staff, trained in crisis management, ready to be deployed at any 
moment in response to a crisis overseas. In 2011 these Rapid Deployment teams were 
deployed on ten occasions to support British citizens, including from Scotland, during 
unrest in Tunisia, Egypt, Bahrain, Côte d’Ivoire and Syria; the Japanese tsunami; the New 
Zealand earthquake; the Marrakesh bombing; and floods in Thailand. 
1.39  Each year, UK consular staff around the world deal with around one mil ion enquiries from 
members of the public. Of those, over 19,200 are from people who need help because 
they are facing particularly difficult circumstances. In 2012/13,18 that included: 
•   6,193 deaths; 
•   5,435 arrests and detentions; 
•   3,707 other assistance which includes: child abduction and custody, forced marriage, 
abduction, assault (general), missing persons, mental health, repatriation and welfare; 
•   3,599 hospitalisations; 
•   172 sexual assaults; and 
•   138 rape cases. 
17   There is no legal right to consular assistance. All assistance provided is at the discretion of the Consular 
Directorate of the FCO. 
18   British Behaviour Abroad Report 2013, HM Government, August 2013, www.gov.uk/government/uploads/ 
system/uploads/attachment_data/file/212707/British_Behaviour_Abroad_report_2012-13.pdf 

Chapter 1: The UK’s international policy  31 
1.40  While there is a charge for some of the UK’s consular services, such as for legalising 
documents, the cost of maintaining the global consular operation is met from the ‘consular 
premium’, a small charge added to the cost of every new British passport. This means 
that around £1.50 from each newly issued passport goes towards the cost of the consular 
service. 
1.41   The UK’s substantial overseas footprint, together with its national expertise and capabilities 
developed over many years, enables it to provide support overseas to UK citizens which 
surpasses the boundaries of most countries’ consular services. Examples of where this 
might apply are cases of the kidnap overseas of UK citizens, child abduction and forced 
marriage. This needs-based assistance is provided by the UK Government for its citizens, 
and does not form part of any agreement to provide consular services to citizens of other 
states. In the event of independence, it would be for the government of an independent 
Scottish state to determine the level of resources, beyond the access to standard consular 
services, which it would al ocate to ensure the protection of its citizens overseas. 
1.42  This assistance is underpinned by a wide range of specialised agencies. The Anti-Kidnap 
and Extortion Unit, for instance, which now sits within the UK’s NCA, is recognised 
worldwide as a centre of excel ence. In 2012, it was informed of 108 kidnaps overseas 
involving a UK citizen. The NCA can provide support to UK diplomats and to the law 
enforcement agencies of other countries, and be deployed overseas. NCA resources 
are available currently to all UK police forces, including in those parts of the UK, such as 
Scotland, where responsibility for policing is devolved. 
Case study: UK response in kidnapping case 
A five-year-old British child was kidnapped in central Pakistan in 2010 during an armed 
robbery at the family home. The kidnapping was reported to the British High Commission 
in Islamabad. The UK’s Serious Organised Crime Agency (SOCA) coordinated the response 
to the kidnap investigation by providing tactical and strategic advice which resulted in the 
safe recovery of the child.* A ransom sequence payment under the control of the Greater 
Manchester Police and SOCA was initiated in Manchester and taken by courier while under 
surveil ance by British, French and Spanish officers. The hostage takers released the child 
when they received information that the ransom had been safely delivered in Spain.** A 
number of arrests were then made in Pakistan, Spain and France and the ransom money 
was recovered. In 2011, one of the hostage takers was sentenced to 60 years’ imprisonment. 
*  SOCA was merged into the NCA which became operational in October 2013. 
**  In the UK there is a clear distinction between criminal kidnap and terrorist/political kidnap. The payment of 
any form of ransom to a terrorist group is a criminal offence in the UK and other jurisdictions. The payment 
of a ransom in the UK in a criminal kidnap by, for example, the victim’s family or company does not 
constitute a criminal offence. However, in some countries the payment of a ransom in a criminal kidnap 
is outlawed. 

32  Scotland analysis: EU and international issues
What consular support could citizens of an independent Scottish state expect?
1.43  The rights of states to determine who their nationals are is a principle of public international 
law. The references in this section relating to ‘dual citizenship’ (British and Scottish) and 
‘sole Scottish citizenship’ are used to il ustrate what might apply in various scenarios. In the 
event that the people of Scotland voted for independence, post-referendum negotiations 
would be critical in determining the arrangements for many issues, including citizenship, 
which determines access to UK consular services. Until the outcome of the referendum is 
known, neither the UK Government nor the Scottish Government has a mandate to carry 
out those negotiations, and this means that inevitably there will be some uncertainty on the 
details of independence before the referendum. Further papers in the Scotland analysis 
series wil  consider the issues arising from citizenship in more detail.
1.44  It is clear, however, that an independent Scottish state would be responsible for providing 
consular assistance to its citizens in countries where Scotland was represented, regardless 
of the level or type of Scottish representation. Currently this representation is limited to 
26 SDI offices, not always in capital cities and of which seven are based in FCO offices, 
in 15 countries and Scottish Government offices in Brussels, Beijing and Washington.19 
None provides consular services, as consular provision is a matter for the UK Government. 
An independent Scottish state would need to decide how to provide consular assistance 
to its citizens, both in countries where it would have a diplomatic presence and those 
where it would not.
1.45  When considering the provision of consular services, some common principles apply. 
For example, outside the countries where Scotland has representation, its citizens would 
be compel ed to seek consular assistance from other states. The UK would provide 
consular assistance to anyone who retained their British nationality fol owing Scottish 
independence. If a British citizen were also a Scottish citizen with dual citizenship they 
would still be able to access UK consular services, except in Scotland.
Consular cooperation within the EU
1.46  If an independent Scottish state were to become a member of the EU, Scottish citizens 
would be entitled to assistance from any EU Member State in a country where Scotland 
was unrepresented.20 The assisting Member State is entitled to recover the costs of 
providing assistance from the Member State of the consular customer concerned. There 
is no uniform standard of consular assistance provided to EU nationals, and the level of 
assistance offered by EU Member States varies considerably. For example, the French 
Government will pay for the medical repatriation of its citizens, the costs of which can 
run into thousands of pounds. If the French Government were to provide this type of 
assistance to a Scottish citizen, the government of an independent Scottish state would 
be liable for the costs of this assistance.
1.47  However, as set out in Chapter 3, the process for an independent Scottish state’s 
membership of the EU is likely to be complex and lengthy, and the government of an 
independent Scottish state would need to consider how to provide consular assistance 
to its citizens overseas including during any period before EU accession. An independent 
Scottish state would need to develop its own consular policy and, as an EU Member 
State, to fund the assistance its citizens sought from other Member States.
19  The Scottish Government has offices in Washington, Beijing and Brussels. The offices in Washington and 
Beijing are based on the FCO platform. All three offices are formal y part of the UK’s diplomatic representation 
in the host country.
20  Article 20(2)(c) and Article 23, Treaty on the Functioning of the European Union

Chapter 1: The UK’s international policy  33 
1.48  There are, however, services which EU Member States do not provide for each other 
overseas, such as birth, marriage and death registrations, which the government of an 
independent Scottish state would need to resolve. As set out in paragraph 1.39, there 
are services which the UK does not provide for non-British citizens, relating to kidnap 
overseas, child abduction and forced marriage. An independent Scottish state would 
remain responsible for providing consular services to its citizens in countries where 
Scotland was formal y represented, regardless of the level or type of representation. 
1.49  Annex D gives details of the diplomatic networks of countries of a similar size to an 
independent Scottish state. 
Consular cooperation within the Commonwealth 
1.50  Under informal arrangements, unrepresented Commonwealth citizens can often seek 
assistance from another Commonwealth member in a non-Commonwealth foreign 
country. For example, the UK provides consular services for Australians and Canadians 
in certain countries under local arrangements. If an independent Scottish state were to 
become a member of the Commonwealth, it could seek to put similar arrangements in 
place with the UK or other Commonwealth countries. But unlike in the EU, there would be 
no legal obligation for any country to agree, and the terms of the agreement would have 
to be negotiated on a case-by-case basis for each country, and would depend on an 
independent Scottish state being a member of the Commonwealth. 
Passports and emergency travel documents 
1.51  In 2012/13, UK consular staff dealt with nearly 30,000 cases of British citizens with lost or 
stolen passports. Many of them were issued with emergency travel documents (ETDs) so 
that they could continue their journey or return to the UK. British citizens, including those 
who hold dual nationality, can access the UK’s passport service for renewal of a standard 
adult or child passport as well as being able to apply for an ETD at British Consulates 
overseas in the event that their passport is lost or stolen. It is uncertain what passport 
arrangements would be in place for anyone with sole Scottish citizenship. It is likely that 
the Scottish Government would have to develop its own emergency travel document for 
any sole Scottish citizens and bear the costs of doing so. 
Projecting UK values: making the world a better place 
The fight against poverty: international development 
1.52  The UK is one of the world’s leaders in the fight against poverty, with a large and influential 
programme, transforming mil ions of lives and playing a leading role in shaping the way 
the world tackles development chal enges. On provisional data, in 2012, the UK provided 
£8.6 bil ion of Official Development Assistance (ODA),21 second only to the US. 
1.53  The UK is on track to achieve its commitment to meeting the global target of spending 
0.7 per cent of Gross National Income (GNI) on ODA from 2013 – the first G8 country to 
do so. Scottish taxpayers – like all UK taxpayers – can be proud of the contribution they 
have made to achieving this. 
21  Preliminary ODA 2012, OECD DAC database, www.oecd.org/dac/stats/oda2012-interactive.htm 

34  Scotland analysis: EU and international issues 
1.54  The size and reach of the UK programme enables UK aid to deliver real impact across 
its 28 focus countries, 15 of which are in the Commonwealth. For example, from 2010 to 
2013, UK support enabled 30.3 mil ion people, over half of them women, to work their way 
out of poverty by providing access to financial services; it supported 5.9 mil ion children 
to go to primary school; and prevented 12.9 mil ion children and pregnant women from 
going hungry. 
1.55  The UK delivers significant results through DFID funding to multilateral organisations 
which helps to draw in other donors to add their contributions to effective multilaterals. 
For example, in 2012, organisations that DFID supported gave 97.2 mil ion people food 
assistance and immunised 46 mil ion children against preventable diseases. The UK 
plays an important role in influencing global international development organisations. One 
example is the World Bank’s International Development Association (IDA), a major provider 
of grants and loans to the world’s poorest countries. UK support typical y accounts for 
10–14 per cent of donor contributions to IDA, making it one of the largest contributors and 
giving the UK a powerful voice in fund governance structures to help improve impact. IDA 
was assessed in the groundbreaking DFID Multilateral Aid Review 2011 as very good value 
for money.22 
Nutrition for Growth 
“You [DFID] have convened the entire world. You’re doing it at a time when budgets are very 
chal enging. People will be amazed at what comes out of tomorrow.” – Bill Gates on the eve 
of the Nutrition for Growth event, at the opening of DFID’s Whitehall office, 7 June 2013 
DFID works with a wide scope of partners – such as the Bill & Melinda Gates Foundation – 
to change the way the world tackles global poverty and its causes together. 
The Prime Minister’s Nutrition for Growth event held in London on 8 June 2013 was part of a 
major UK effort to mobilise governments, donors, civil society, philanthropists, business and 
science to invigorate and improve policy making on nutrition. This huge social media event 
secured financial and policy commitments from participants to improve nutrition, particularly 
among pregnant women and young children in the world’s poorest countries. The event 
also established new partnerships on nutrition research between business and science, and 
increased focus on nutrition in Africa. 
1.56  The UK uses the size and reputation of its development programme to lead international 
efforts in ways consistent with UK values to eliminate global poverty. Building on its strong 
global reputation, the UK is invited to hold a number of unique and transformational 
leadership positions. For example, in 2012 and 2013, the Prime Minister co-chaired the 
high level panel to shape the framework that fol ows the Mil ennium Development Goals 
after 2015. The panel set out a vision in May 2013, welcomed by the Secretary General 
of the UN, on how to eradicate extreme poverty from the world by 2030. The Secretary 
of State for International Development co-chairs the Global Partnership for Effective 
Development Co-operation, which aims to give development cooperation more impact 
per pound spent. Positions like these enable the UK to influence global development 
agreements and to help shape the way that countries around the world are supported to 
grow and prosper. 
22   Multilateral Aid Review 2011, DFID, March 2011. The International Development Committee, the National 
Audit Office and the Public Accounts Committee all welcomed the Multilateral Aid Review. It was the first 
review of its kind, focusing on the costs and results delivered to improve value for money. Other international 
donors have since emulated the approach. See: www.publications.parliament.uk/pa/cm201213/cmselect/ 
cmpubacc/660/660.pdf; www.publications.parliament.uk/pa/cm201314/cmselect/cmintdev/349/349.pdf; an
www.nao.org.uk/report/dfid-the-multilateral-aid-review/ 

Chapter 1: The UK’s international policy  35 
1.57  DFID has a substantial part of its UK headquarters in East Kilbride, with more than 600 
people based there, constituting almost half of DFID’s staff working in the UK. DFID staff in 
Scotland are an intrinsic part of the UK team delivering the UK’s international development 
effort, working in a mix of policy, programme and corporate positions. This presence 
would be necessarily reviewed in the event that Scotland became an independent state. 
1.58  International development is reserved to the UK Government under the Scotland Act 
1998, and the vast majority of the budget is administered by DFID as the lead department 
in the UK Government’s efforts to fight global poverty. However, with agreement 
from the Secretary of State for International Development, the Scottish Government 
has been developing a small targeted programme since 2006 to complement UK 
Government action. 
1.59  The Scottish Government’s £10 mil ion per annum programme contributes to the UK’s 
ODA target and is directed towards areas of particular interest to Scotland. A total of 
£3 mil ion is earmarked for Malawi, with which Scotland has deep and broad links, with 
the remainder going primarily through non-governmental organisations to a smal  number 
of countries in Africa and South Asia. The Scottish Government programme is in addition 
to the significant contribution Scottish taxpayers already make to Malawi through the 
UK Government’s development budget. The UK Government, through DFID, is one of 
the largest donors in Malawi, spending £117.5 mil ion in 2012/13 to improve the lives 
of its citizens. The UK’s work in Malawi focuses on addressing poverty and inequality, 
supporting wealth creation and economic growth and promoting an open society with 
more capable, accountable and responsive governance. With UK support in 2012/13, 
8,000 girls were supported in secondary school with UK bursaries, 130,000 people were 
provided with sustainable access to clean drinking water and an improved sanitation 
facility and 5,000 people accessed credit. 
1.60  The existing arrangement works well with Scotland (as part of the UK) already contributing 
to a world leading development programme. Scotland contributes to and benefits from 
the UK Government’s wider international development effort and expertise, but has scope 
to pursue complementary Scottish priorities within the agreed UK policy framework. 
Continuing to pool resources is the most effective way to make best use of UK taxpayers’ 
money and to get the best return for every pound spent. Splitting the UK’s unified aid 
programme, as the Scottish Government proposes,23 would result in duplication of fixed 
costs and less money going to those who need it most. 
1.61  Compared with the role it has now as part of the UK, an independent Scottish state would 
have to establish a very different role for itself in international development. Assuming 
that an independent Scottish state would aim for an aid budget of 0.7 per cent (or more) 
of GNI, this is likely to be considerably smal er than the UK programme that Scotland 
currently contributes to. However, the government of an independent Scottish state would 
need to develop the capacity to manage what would be a significantly larger programme 
than the £10 mil ion programme currently handled by the Scottish Government. This 
would have important implications for the speed and quality with which an independent 
Scottish state could reach, or exceed, the 0.7 per cent ODA/GNI target which the Scottish 
Government has stated it intends to do.24 
23   Humza Yousaf MSP and Minister for External Affairs and International Development, Scottish Government, 
in oral evidence to the International Development Committee, 31 October 2013 
24   Scotland’s Future: Your guide to an independent Scotland, Scottish Government, November 2013 

36  Scotland analysis: EU and international issues 
Human rights and democracy 
1.62  The UK draws on its full range of relationships, networks and soft power assets described 
in this paper to work consistently and with confidence across the globe. The UK’s values 
include respect for the rules-based international system, so it is natural that the UK 
places great emphasis on working within that system, through international and inter­
governmental organisations, including the UN, the EU, the Commonwealth, the OSCE and 
the Council of Europe, to encourage the implementation of human rights standards and 
the rule of law, and to strengthen the international response to human rights violations. 
1.63  The UK’s reputation as a human rights defender has been built up over centuries. From 
the campaign against the slave trade in the early 18th century to the drafting of the 
European Convention on Human Rights in the 1950s and the creation of the UN Human 
Rights Council in 2006, the UK has been the driving force behind many advances in 
this area. More recently, the UK launched an initiative on preventing sexual violence in 
conflict and used the platform created by the UK’s Presidency of the G8 in 2013, as well 
as its position on the UN Security Council, to secure commitments from international 
partners to address and tackle the issues surrounding sexual violence in conflict. The UK 
has the reputation, relationships, networks and experience to make a real difference to 
human rights and the rule of law. Scottish efforts have been and are an integral part of 
the UK’s efforts on the international stage. The UK is one of the world’s most successful 
multi-national and multi-cultural states. This is a major source of the UK’s power and 
resilience, and has enabled it to see beyond national solutions to build lasting constitutional 
and institutional foundations. 
1.64  Balancing values with other vital national interests is not always easy. Countries which the 
UK works closely with in some areas may not always share its values, or place the same 
importance as the UK does on human rights at home and abroad. Scotland, as a part of 
the UK, has the tools to exert the influence required and gain the access needed to further 
its economic, political and humanitarian interests.25 As a new country establishing itself on 
the world stage, an independent Scottish state may have to be selective in its efforts to 
influence, and be realistic about its capacity for activism within, international organisations. 
The government of an independent Scottish state would have to work harder to defend 
direct national, commercial and other interests with larger global powers, without the 
guaranteed support and influence of the UK’s established global position. 
Working abroad to mitigate and adapt to the effects of climate change 
1.65  Tackling climate change is a key UK foreign policy priority. While there is action at a 
national level (both the UK Government and Scottish Government have low carbon 
targets), that alone will not solve the problem. The UK Government plays a leading role 
across the world in helping developing countries to tackle climate change, including 
through its commitment to provide £2.9 bil ion from the International Climate Fund up to 
March 2015; with an additional £969 mil ion of funding agreed for 2015/16 in the Spending 
Round 2013. Scottish Government officials and Ministers form part of the UK delegation 
at the annual UN international conference. At the UN Framework Convention on Climate 
Change Conference of the Parties (COP) at Durban 2011, the UK Government, working 
through the EU and along with other international partners, successful y negotiated 
agreement for a plan towards a global treaty. Further progress was made at the COP in 
Doha in 2012 and in Warsaw in 2013 towards the key objectives of the 2015 agreement, 
increasing ambition in the period up to 2020 and building and implementing the 
architecture of the global climate regime. 
25  How the UK, and Scotland as a part of the UK, does this is considered in more detail in Chapter 2. 

Chapter 1: The UK’s international policy  37 
1.66  Climate diplomacy is a recognised area of UK expertise. The FCO has a unique network 
of over 100 climate and energy attachés based in its posts across the world. Working 
closely with the FCO, DFID, Defra and the Department of Energy and Climate Change, its 
attachés are helping other countries to put in place the necessary policies to al ow them to 
take more ambitious action against climate change and to build the political conditions for 
the new global agreement on climate by 2015. 
Conclusion 
1.67  In an interconnected, interdependent world, the security and prosperity of the rest of the 
globe have an important and tangible effect on security and prosperity at home. The 
UK, as one of a handful of countries with global influence and interests, can go some 
way to shaping its environment, identifying and tackling threats and spotting and seizing 
opportunities. The ways in which it does this are explored further in the fol owing chapter. 
1.68  By drawing on the resources of the UK’s international trade network and expertise to 
support particular Scottish interests, Scotland gets the best of both worlds: the flexibility to 
target resources to priority areas overseas; as well as the strength and certainty provided 
by the worldwide reach and influence it has as an integral part of the UK. Scottish-based 
companies regularly form part of trade delegations which accompany UK Ministers around 
the world. Companies based in an independent Scottish state would lose access to the 
global UKTI and wider FCO networks and to the UK Government services to Scottish 
exporters and for investors into Scotland. 
1.69  In the event of a vote for independence, an independent Scottish state would be 
responsible for its citizens in any country where it had representation of any kind. It is likely, 
at least in the short term, that people with sole Scottish citizenship would be dependent 
on other countries for consular assistance. 


Chapter 2: 
The UK’s international networks 
and influence 
•   The UK’s diplomatic global network represents Scotland worldwide, employing 
over 14,000 people in 267 Embassies, High Commissions, Consulates and other 
offices in 154 countries and 12 Overseas Territories around the world. The costs 
of developing an independent Scottish diplomatic network to replicate the quality 
of the representation currently provided by the UK, as the Scottish Government 
has stated it intends to do, would be a significant cost to the Scottish taxpayer 
without replacing the reach and access currently provided by the UK. 
•   Scotland benefits from the UK status as a ‘soft power superpower’. The British 
Council facilitated 1,000 international school partnership projects in Scotland 
in 2012; and through the UK’s international scholarship programmes such as 
Chevening, where many of its scholars chose to study at Scottish universities, 
significant income is generated for Scottish universities. 
•   Scotland benefits from and contributes to the UK’s bilateral relationships and 
representation in multilateral organisations, including the North Atlantic Treaty 
Organization (NATO), the UN and the EU. While an independent Scottish state 
would develop its own relationships and international identity, its influence could 
be diminished and it would likely become more dependent on alliances with other 
states. The UK would have no obligation, as it does now, to negotiate for and 
deliver on Scotland’s interests. 
2.1   Chapter 1 looked at the range of the UK’s international policy, and its benefits for people 
and businesses in Scotland. It argued that there are many areas of important national 
interest, concerning security, the economy and values that must be pursued international y. 
This chapter examines how the UK achieves its international objectives through its 
international networks and influence on the world stage. 
2.2   The tools at a state’s disposal are much more limited when operating international y 
than when domestic policy is concerned. Short of coercion (military action or economic 
sanctions, for example) or incentivisation (for instance through financial aid), states can only 
achieve their objectives international y through persuasion. To deliver tangible benefits for 
their citizens and businesses, and to encourage development and the promotion of human 
rights, successful states must build and nurture complex networks of relationships, either 
bilateral y or through multilateral organisations, and use them to persuade and negotiate 
with other countries. Much of this work is the primary function of their diplomatic services, 

40  Scotland analysis: EU and international issues 
operating through Embassies or High Commissions in foreign countries, or Permanent 
Representations or delegations to international institutions. 
2.3   As well as formal diplomacy, the extent to which a country’s arguments and negotiating 
positions translate into tangible outcomes is also affected by what the Harvard political 
scientist Joseph Nye describes as ‘soft power’: the essential attractiveness of a country 
projected through its values, culture, history, language or society.1 This chapter examines 
the extent of the UK’s relationships, underpinned by its diplomatic network, its soft power 
and its position in international organisations; and how it uses them to deliver positive 
outcomes for the UK. It looks at some of the considerations for an independent Scottish 
state in seeking to replicate a network of relationships and a capacity to engage and 
persuade other countries, in the event of a vote for independence. 
The diplomatic network 
2.4   The bedrock of global influence is a network of bilateral relationships, underpinned by 
active diplomacy. The UK has an extensive network of deep relationships with nations 
all over the world. Its strongest partnership is that with the United States (US); President 
Obama described the UK during the 2012 Presidential election campaign as “our closest 
ally”,2 and the UK and the US are each other’s largest investors. 
2.5   Bilateral relationships are maintained primarily by diplomats working in each other’s countries. 
The UK has one of the most extensive and effective diplomatic networks in the world – 267 
offices in 154 countries and 12 Overseas Territories, employing over 14,000 staff, with an 
annual budget of £1.6 bilion.3 This network represents the whole of the UK overseas, and 
provides a platform for promoting the UK’s international political, economic and commercial 
interests, and the identity of the UK and its constituent parts, in every major city. Seven new 
diplomatic posts have been opened since 2010, three more will have opened by the end of 
2013 and overall 20 offices will have been opened or upgraded by 2015. 
2.6   These offices are the base for the UK in the host country. They are the places where UK 
officials work, but they are also places to bring together opinion formers, business leaders 
and lawmakers, to influence, exchange ideas, negotiate and showcase the UK’s culture 
and products. The marketplace in which they compete for access is often crowded – 
178 countries have Embassies in Washington DC,4 151 in Tokyo5 and 130 in Pretoria.6 
Ambassadors, even those who represent a large country, or one that has a significant 
political, defence or commercial relationship with the host country, have to work hard to 
create access to and influence the key players in the society in which they work – the 
people who will be taking decisions that impact on UK interests. The UK, by virtue of its 
size and status in the world and the extent of its interests (as set out in Chapter 1), and its 
access and influence, is better placed than almost all other countries to make contacts 
and build relationships to deliver its objectives. 
1   Nye Jr JS, Soft Power: The means to succeed in world politics (New York, 2004) 
2   www.bbc.co.uk/news/world-us-canada-19514925 
3   Foreign and Commonwealth Office Annual Report and Accounts 2012/13, published 1 July 2013 
4   Diplomatic List, US State Department, www.state.gov/documents/organization/205353.pdf 
5   Diplomatic List, Japanese Ministry of Foreign Affairs, www.mofa.go.jp/about/emb_cons/protocol/ 
6   Diplomatic List, South African Department of International Relations and Cooperation, www.dfa.gov.za/foreign/ 
forrep/preced_alp130221.pdf 

Chapter 2: The UK’s international networks and influence  41 
2.7   The UK’s Ambassadors and High Commissioners in the emerging powers and traditional 
markets alike lead campaigns to win new business, attract inward investment and 
champion the reputation of the UK economy, and work to build an environment in which 
UK business can thrive. The UK’s diplomatic network is working to help UK companies 
overseas to win contracts, secure investment to the UK and break down barriers to trade; 
promote the UK’s economic and sectoral strengths; build coherent col ective international 
responses to shared chal enges; and understand, explain and influence to our advantage 
economic, financial and political conditions in other countries. UK Ministers have led a 
number of successful trade missions overseas highlighting investment opportunities and 
contracts worth hundreds of mil ions of pounds and safeguarding thousands of jobs in 
the UK. 
2.8   The UK diplomatic network also provides a platform for other parts of the government 
working overseas. These include: 
•   military staff, including defence attachés, in 70 missions, working with al ies on 
capabilities ranging from intel igence sharing, to access to training sites for UK troops 
to prepare for overseas operations, and promoting Scotland’s defence industry;7 
•   the National Crime Agency (NCA), which has an international network of over 
130 officers based in around 40 countries, enabling an operational reach across over 
120 countries for law enforcement agencies in Scotland and in the rest of the UK; 
•   UK Trade & Investment (UKTI), which has over 1,200 staff in 169 offices in over 
100 countries; 
•   the Department for International Development (DFID), with 1,445 staff working 
overseas, over 1,300 of whom are based in DFID’s 28 focus countries; 
•   the Science and Innovation Network, funded by the Foreign and Commonwealth 
Office (FCO) and the Department for Business, Innovation and Skil s (BIS), with 90 staff 
in 46 offices in 29 countries and territories; and 
•   the British Council, which is represented in 110 countries. 
2.9   In some countries, the UK will share offices with other international partners. Although 
local arrangements vary, general y each country’s diplomats within the shared building will 
have separate office space, IT systems and communications, and will only share some 
common space, such as a reception area, and the perimeter security. For example, in 
Beirut, the UK is located in a multi-national building where diplomatic representatives of 
Australia, Japan, Brazil, Denmark and Norway are also tenants. Each mission has its own 
office and a separate, independently negotiated lease. Security costs are shared, which 
the UK and Australian Embassies manage. In Dar es Salaam the UK co-owns the building 
housing its diplomatic premises with Germany, the Netherlands and the European External 
Action Service; and in Port of Spain, the UK rents a proportion of its High Commission to 
Germany. The sharing and recovery of costs is on a full economic basis and the amount 
involved is usual y included in the individual licence agreements drawn up by the FCO, 
which decides how much to charge. 
2.10   Scotland benefits directly from the UK’s international network. The UK offices described 
above work to achieve the international policy objectives that benefit the whole of the 
UK, including promoting Scottish companies and products, its culture, and Scotland as 
a destination for investment, tourism and study. Nine UK offices also play host to officials 
7  Scottish Development International states the value of this industry to Scotland as “in excess of £1.8 bil ion a 
year”, www.sdi.co.uk/sectors/aerospace-defence-marine/adm-sub-sectors/defence.aspx 

42  Scotland analysis: EU and international issues 
from the Scottish Government or Scottish Development International (SDI), who can use 
the profile and access gained from belonging to the UK diplomatic mission specifical y in 
the pursuit of Scottish Government priorities.8 The Scottish Government recognises the 
value of the UK’s diplomatic network. Its International Framework document (updated on 
22 October 2012) acknowledges the importance of the UK Government’s representation 
overseas in delivering for Scotland: “We will continue to make full use of the UK resources 
at our disposal. In particular, we will work with the Foreign and Commonwealth Office 
network and UK Trade and Investment around the world to maximise business, cultural 
and educational opportunities for Scotland. We will also engage directly with the British 
Council, so that we can effectively showcase Scotland’s cultural and educational 
excellence abroad”
. 9 
2.11   The FCO has an important role to play in ensuring VIP visits to and from the UK, 
including Scotland, run smoothly. For large events such as the London 2012 Olympic 
and Paralympic Games (when the FCO managed the visits of 121 Heads of State or 
Government) or for a single visit by a foreign Head of State, the FCO has a unique record 
of organising highly professional visits. For example, the FCO worked with the Scottish 
Government during the visit to the UK by the President of Malawi in March 2013 and this 
joint planning helped to deliver a successful visit. 
2.12   The FCO also has a key part in delivering a secure and successful Commonwealth Games 
in Glasgow in 2014. It has a significant amount of experience to offer from the London 
2012 Olympics, including on dignitary management, diplomatic engagement and the 
international aspects of accreditation. The FCO is providing the Glasgow 2014 Organising 
Committee and the Scottish Government with advice, unavailable from other sources, on 
a range of complex and sensitive international political issues which will contribute to the 
smooth running of the Commonwealth Games. 
2.13   In addition, the FCO’s overseas posts in Commonwealth countries and Overseas 
Territories will play a key role during the international leg of the Queen’s Baton Relay and 
will help to deliver a comprehensive public diplomacy campaign around the Games. 
The campaign will promote the UK – with a focus on Glasgow and Scotland – as the 
destination of choice for trade, education and tourism. It will also promote UK and 
Commonwealth values. 
An independent Scottish state’s diplomatic network 
2.14   The current Scottish Government has indicated that it would seek to build a separate 
Scottish diplomatic network of 70 to 90 missions for an independent Scottish state, 
on the basis of its existing SDI offices in 15 countries outside the UK and the Scottish 
Government offices in Brussels, Washington and Beijing, which form part of the UK’s 
representation.10 Only eight of the existing SDI offices are in capital cities.11 The SDI’s remit 
is solely to promote international trade and inward investment opportunities for Scotland; 
it currently has no role to play in foreign policy, consular or bilateral relations with the host 
government, which is the responsibility of the UK’s diplomatic representation. 
8   The Embassies in Washington, Beijing and Dubai; the High Commission in Delhi; the Deputy High 
Commissions in Mumbai and Hyderabad; the Consulates-General in Toronto, Rio and Hong Kong. 
9   Scotland’s International Framework, Scottish Government, October 2012, www.scotland.gov.uk/ 
Publications/2012/10/3096/4 
10   Scotland’s Future: Your guide to an independent Scotland, Scottish Government, November 2013 
11   Beijing, Copenhagen, Moscow, New Delhi, Paris, Seoul, Singapore, and Tokyo, www.sdi.co.uk/about-sdi/ 
office-locations.aspx 

Chapter 2: The UK’s international networks and influence  43 
2.15   An independent Scottish state’s diplomatic service would also need to staff and 
accommodate missions to whichever international organisations it would seek to join. 
Achieving a network of around 100 missions from this basis – acquiring property, hiring 
and training staff, and procuring secure communications equipment, for instance – 
would be expensive and take a long time, with the burden of funding this fal ing to the 
Scottish taxpayer. Scottish Government staff currently based in UK Embassies and High 
Commissions overseas may be required to find new bases from which to represent an 
independent Scottish state. Annex D sets out the level of diplomatic representation of 
states of a similar size to that of an independent Scottish state. 
2.16   An independent Scottish state would not be entitled by right to any UK diplomatic 
premises, equipment or staff. As set out in Scotland analysis: Devolution and the 
implications of Scottish independence
, the legal position is clear: the bodies that support 
the UK now, for example the Bank of England, would continue to operate on behalf of 
the remainder of the UK on the same basis as before Scottish independence.12 If an 
independent Scottish state wanted to continue to receive services from UK institutions 
or utilise them to carry out functions in relation to Scotland, that would be a matter for 
negotiation and would have to be agreed with the continuing UK. 
Soft power 
2.17   By sharing the UK’s culture and values, and by making the most of the assets which 
attract others, the UK builds trust and credibility in the international community, and 
attracts the brightest and best to choose the UK over its competitors. The UK’s soft power 
– the ability to influence others through the power of attraction – makes a vital contribution 
to its influence and reputation around the world. 
2.18   The UK’s soft power arises from a wide range of assets including, among others, the 
UK’s heritage, culture and language, the strength of its education and cultural sectors, 
the promotion of free speech and parliamentary democracy, thriving civil society and 
cultural diversity. While the UK Government cannot, and does not, seek to control all of 
these directly, it can support them and harness their strengths, for instance through the 
UK’s international scholarships, aid programmes or collaboration with public diplomacy 
partners including the British Council, which provide an unrival ed platform for the sharing 
of UK culture and values with people from other countries. The UK is regularly recognised 
in international comparisons for its outstanding tradition of nurturing these activities and 
networks, and YouGov research has described the UK as a ‘soft power superpower’.13 
The UK brand is also considered to be strong in comparison with other nations around 
the world.14 
12   Scotland analysis: Devolution and the implications of Scottish independence, HM Government, February 2013, 
www.gov.uk/government/publications/scotland-analysis-devolution-and-the-implications-of-scottish­
independence 

13   Britain: A soft power super power?, YouGov, October 2012, yougov.co.uk/news/2012/10/15/britain-soft-power­
superpower/ 
14   Anholt-GfK Nation Brand Index 2012, www.gfk.com/Documents/Press-Releases/2012/20121023_NBI_2012_ 
final.pdf 

44  Scotland analysis: EU and international issues 
Building the UK’s brand: the GREAT campaign 
The GREAT campaign was launched in 2011 to maximise the economic benefits to the UK 
from the unprecedented levels of attention associated with the events of 2012. Drawing 
the national promotion efforts of UKTI, VisitBritain, the British Council and the FCO into a 
single campaign, it aims to deliver significant and long-term increases in trade, tourism and 
investment in support of the UK Government’s prosperity agenda. The campaign has made 
an impact in its ten priority markets (Australia, Brazil, Canada, China/Hong Kong, France, 
Germany, India, Japan and the US) and is currently being targeted at new emerging markets 
such as South Korea, Mexico, Indonesia, Turkey, Poland and emerging Europe. 
Scotland is being actively marketed under GREAT: some of the advertising features images 
of Scotland, such as Glenfinnan Viaduct, the University of Edinburgh and the Edinburgh 
Tattoo, with a Scotland message, while trade promotions feature Scottish companies such 
as Touch Bionics. 
The UK Government has committed a further £30 mil ion to continue GREAT into 2014/15. 
This will drive the campaign forward in key markets where GREAT is performing wel , 
particularly China, India, the US and Brazil. Tourism activity will be extended to the Gulf, 
while trade and investment-focused activity will also target new emerging markets where 
GREAT can help the UK gain a competitive advantage, including Russia, South Korea, 
Mexico, Turkey, Indonesia, Poland, Hungary, the Czech Republic, Slovakia and Romania. 
The VisitBritain target return on investment for 2013/14 is that every pound spent on this 
campaign will generate £15 spent in the UK. 
2.19   Through its soft power, the UK is one of the few countries that can convene al iances to 
deal with some of the greatest international chal enges of our time. It does this through 
framing the agenda, building partnerships and responding in an agile way to chal enges 
as well as opportunities. Moreover, it does so in a way that has real impact: the initiative 
on preventing sexual violence in conflict has demonstrated the UK’s ability to mobilise the 
international community to take action that makes a difference on the ground, resulting in 
the clearest statement to date by the international community that these crimes must, and 
wil , be confronted. The London 2012 Olympic and Paralympic Games were extraordinarily 
successful examples of the projection of UK soft power. 

Chapter 2: The UK’s international networks and influence  45 
Preventing Sexual Violence Initiative (PSVI) 
The UK has led an international campaign to end the culture of impunity for sexual violence 
in conflict. In May 2012, the Foreign Secretary, together with the Special Envoy of the UN 
High Commissioner for Refugees, Angelina Jolie, launched an initiative on the prevention of 
sexual violence in conflict. The international campaign aims to end the culture of impunity 
for sexual violence crimes and replace it with one of deterrence by building national and 
international capacity to tackle sexual violence in conflict. 
Working with the UN Special Representative for Sexual Violence, Zainab Bangura, and the 
Special Envoy, the UK has increased international focus on the eradication of sexual violence 
in conflict. The UK has held a series of high profile events, including a projection of the PSVI 
campaign messages onto the Coliseum in Rome on International Women’s Day, participation 
in the 16 Days of Activism Against Gender Violence in the UK, and a screening of the film 
In the Land of Blood and Honey in Tokyo. The Foreign Secretary’s visit to the Democratic 
Republic of Congo (DRC) with Angelina Jolie, who directed the film, generated extensive, 
positive UK and international media coverage.* 
The proactive use of UK networks, including NGOs, as well as the UK’s strong convening 
power, has resulted in further commitments from international partners. Under the UK’s 
leadership, in April 2013 the G8 Foreign Ministers adopted a historic Declaration on 
Preventing Sexual Violence declaring that rape and serious sexual violence in conflict are 
grave breaches of the Geneva Convention – a vital step towards eradicating safe havens 
for perpetrators. This international effort is accompanied by engagement with countries 
including Bosnia, DRC, Kosovo, Libya, Mali and Somalia, including joint funding with the 
United Arab Emirates to support PSVI practical action in Somalia, to strengthen national 
capacity to investigate al egations of sexual violence and support survivors. On the Syrian 
borders alone, UK experts have trained over 40 healthcare professionals and human rights 
defenders who are helping hundreds of Syrians, including survivors of sexual violence. 
The UK has promoted its messages through an extensive digital diplomacy campaign. 
During the UN Security Council Debate in June 2013, the hashtag #TimeToAct was used 
over 6,000 times on Twitter, reaching an estimated 5 mil ion accounts. The UK Government 
built on this in the run-up to the UN General Assembly with extensive social media activity, 
including launching a Thunderclap campaign which reached an audience of nearly 2.5 mil ion 
people, to encourage countries to support the new Declaration of Commitment to end 
sexual violence in conflict, which was endorsed on 24 September 2013 in New York by 119 
countries. The Declaration sets out practical and political commitments to end the use of 
rape and sexual violence as a weapon of war. It is the clearest statement to date that the 
international community must and wil  confront these crimes. 
*  http://storify.com/foreignoffice/this-week-at-the-foreign-office-16/elements/f8fd39d6b6ca0f5d87c1f75e 
2.20  The UK continues to explore new ways to inform and influence both traditional partners 
and new audiences including civil society, businesses, pressure groups, UK citizens and 
diaspora communities. This section explores different ways in which the UK uses various 
aspects of its soft power, and channels beyond traditional government-to-government 
diplomacy, to achieve its international objectives. 
The British Council 
2.21  The British Council is an FCO non-departmental public body and a charity. It shares the 
UK’s great cultural assets – its language, arts and education – with the rest of the world 
and supports the reciprocal exchange of ideas and culture to bring the rest of the world 

46  Scotland analysis: EU and international issues 
to the UK. Through this work the British Council builds trust in the people and institutions 
of the UK, supporting global prosperity and security, and encourages people to visit, 
study in and do business with the UK. The British Council received £162 mil ion in FCO 
Grant in Aid funding for 2013/14. It has offices in Belfast, Cardiff, Edinburgh, London and 
Manchester and has served the whole of the UK for more than 75 years. 
2.22  The British Council has an extensive international network with offices in over 100 
countries including: 
•   Brazil, China, India, Indonesia, Mexico, Turkey and other high growth countries that 
offer much potential for the UK’s businesses and institutions; 
•   fragile and post-conflict states such as Libya, South Sudan, Iraq and Afghanistan that 
are strategical y key to the UK’s security; 
•   marginalised places such as Burma and Zimbabwe where it builds capacity and 
international connections for those who want access to the wider world; and 
•   Europe, the US, Japan and the Commonwealth where it works to maintain, renew and 
enrich traditional ties. 
2.23  In 2012 more than 40,000 international students came to Scotland, representing over 
12 per cent of the UK’s share of the market.15 The British Council supports access for 
students, academics and researchers to high quality international opportunities into and 
outward from the UK. British Council Services for International Education Marketing 
supports the international market intel igence needs of UK institutions across 46 overseas 
markets. In 2012, it served over 300 UK col eges, schools and universities and reached 
250,000 students.16 The British Council’s Education UK website received over 2 mil ion 
unique visitors researching study opportunities in the UK. 
2.24  The British Council also supports outward student mobility, with the number of students 
from Scottish higher education institutions (HEIs) taking advantage of the European 
Erasmus programme having increased by 34 per cent in the last four years. 
2.25  The British Council supported missions by senior academics from Scottish HEIs to China 
and India, leading to £1.09 mil ion of new Scottish business. Scottish HEIs are now linked 
with 52 HEIs in China, 47 in India, 26 in the US, 15 in Canada, 14 in Pakistan and 13 in 
Russia.17 
2.26  DFID will contribute £17 mil ion over three years to the £42.9 mil ion UK-wide Connecting 
Classrooms programme, which is managed by the British Council. DFID funds to the 
Connecting Classrooms programme support links between schools in the UK and 
in 29 countries in Sub-Saharan Africa and South Asia, professional development for 
teachers and school heads both in the UK and overseas, and awards to schools which 
demonstrate a strong global dimension in their curriculum. 
2.27  In 2012/13 the British Council supported over 1,000 school partnerships in Scotland 
through programmes such as Connecting Classrooms, Comenius and eTwinning. 
Charleston Academy in Inverness, for example, has been partnered with Lotsane Senior 
Secondary School in Botswana since 2010. Head teacher Chris O’Neill explains that: 
“Connecting Classrooms will enable pupils to learn about the world around them, about 
15   Study in Scotland, www.scotland.org/study-in-scotland 
16   British Council Annual Report 2012/13, British Council, www.britishcouncil.org/sites/britishcouncil.uk2/files/ 
annual-report-2012-13.pdf, page 24 
17   Scotland Fact File, British Council, www.britishcouncil.org/about/scotland 

Chapter 2: The UK’s international networks and influence  47 
the facts of poverty that face children their own age in developing countries, and how 
education can help eradicate poverty. It will also benefit teachers by enhancing their 
professional skills.”18 
2.28  The British Council also brings an international dimension to the Edinburgh Festivals, 
creating overseas opportunities for Scottish artists, companies and audiences. In 
2013 it brought 50 world renowned writers to take part in the Edinburgh World Writers’ 
Conference. It also helped the National Youth Orchestra of Iraq to play in Scotland and 
supported a series of South African performances as part of the Edinburgh Festival Fringe. 
2.29  Through international arts programmes such as Transform, a four-year programme 
embracing the opportunities of the Olympic handover from the UK to Brazil, the British 
Council has brought the best of Scotland’s arts and creative industries to new audiences 
around the world. The 2013 Festival Cultura Inglesa in Sao Paulo, for example, included 
six productions from the UK – five of which were from Scotland. To date Transform has 
reached an audience of more than 932,000. In 2014 the British Council will be holding 
major arts seasons in Russia and South Africa which will build on the successes of 
Transform and the 2012 UKNow Festival in China. By sharing the best of Scottish culture 
with audiences around the world, the British Council showcases Scotland as an attractive 
destination for tourism, education and investment. 
International scholarships 
2.30  The UK’s scholarship programmes draw on UK expertise in education to help build a 
strong, international network of friends of the UK who will rise to increasingly influential 
positions over the years. They are key features of UK soft power diplomacy and give 
scholars both a first-class academic qualification and exposure to UK values, culture 
and diversity. 
2.31  The UK Government operates three significant scholarship programmes: Chevening, 
Marshall and Commonwealth. Of these, the Chevening Scholarships programme is the 
largest, offering postgraduate scholarships to students in 118 countries. In the 2013/14 
academic year, approximately 1,400 scholarships from all three schemes were awarded 
worldwide. Scholars are ful y funded, often in partnership with the university and private 
sectors. They study at a wide range of UK universities including Scottish universities, 
generating significant income. 
2.32  The DFID-funded Commonwealth Scholarships programme also sends large numbers of 
scholars to Scottish universities. The Marshall Scholarships programme is for US citizens 
only and has been in operation for more than 60 years. It is regarded as one of the most 
prestigious scholarship programmes in the US. Chevening’s alumni network of 42,000 and 
Marshal ’s network of 1,700 are influential and high achieving networks. 
2.33  These programmes operate alongside Scotland-specific initiatives such as the Scottish 
Government’s Saltire Scholarships programme, which makes 200 awards of £2,000 each 
annual y for students from Canada, China, India and the US. UK-wide schemes, with wide 
international coverage and attraction to international students, therefore complement and 
add value to schemes specific to Scotland. 
18  www.highland.gov.uk/yourcouncil/news/newsreleases/2013/March/2013-03-22-01.htm 

48  Scotland analysis: EU and international issues 
The transparency revolution 
The UK used its leadership of the G8 in 2013 to drive an ambitious push for greater 
transparency, freer trade and fairer taxes (the 3Ts). On 15 June, the UK hosted a high profile 
‘Open for Growth’ event to catalyse a worldwide movement towards greater transparency. 
The ‘Open for Growth’ event occurred before the main G8 summit, and the UK’s use of 
soft power at this event – including making use of its diplomatic network particularly with 
African governments, and engaging with a wide range of business and non-governmental 
organisations (NGOs) – helped pave the way for the ambitious outcomes at the G8 summit in 
support of UK values and economic interests. 
Developing countries, international organisations, business and civil society, and G8 
members participated at senior level, and launched ambitious individual and collective 
commitments on the 3Ts. The G8 digital platform provided access across many channels, 
including live video streaming, live tweeting from UK Government accounts and the use of a 
unique hashtag for the event. 
One of the event’s themes was how to achieve greater transparency and accountability 
through the supply of government data and the use of digital technology. This resulted 
in commitments on open data which drive growth and innovation, release economic 
and social benefits, and promote new businesses and efficiencies. Mozil a launched a 
UK-wide campaign to inspire a generation of young people to create, as well as use, digital 
technologies. The World Bank announced its ‘Open and Col aborative Private Sector 
Initiative’ which will use open data to accelerate support for economic growth. The Open 
Data Institute announced an Open Data Certificate which will rate or classify the quality of 
any dataset published on the internet and will be available to anyone to use. 
Science and innovation diplomacy 
International col aboration in science and innovation is vital for meeting policy chal enges on 
a global scale. Chal enges such as pandemic disease, climate change and food security 
require the ability to engage other governments with, and through, science. The UK Science 
and Innovation Network (SIN) is made up of more than 90 staff, in 46 different locations 
in 29 countries and territories. SIN officers engage with the local science and innovation 
community in support of UK policy overseas. 
The China SIN team brokered the relationship between the University of Edinburgh and 
Peking University enabling them to establish a laboratory for col aboration on stem cell 
research. The SIN team in Guangzhou also used FCO funding to fund two visits in 2012 by 
the Edinburgh team to meet local government, academics and industries. Scotland analysis: 
Science and research*
 examines this area in more detail. 
*  Scotland analysis: Science and research, HM Government, November 2013, 
www.gov.uk/government/collections/scotland-analysis 

Chapter 2: The UK’s international networks and influence  49 
Defence diplomacy 
The UK Government launched the UK’s International Defence Engagement Strategy in 
February 2013.* Defence engagement is the means by which the UK uses its defence assets 
and activities, short of combat operations, to achieve influence.** Its aims are to protect 
UK citizens abroad, promote and protect UK prosperity, understand other nations’ security 
objectives, deter threats to UK interests, and build international capability, capacity and will 
among UK al ies. 
Defence engagement has achieved significant results, for example, in the Western Balkans. 
The UK is leading the ‘Changing Perception’ project in Serbia, a NATO-neutral Partner 
for Peace. Serbia is keen to play a role in international security by supporting EU and UN 
peacekeeping missions as a responsible international partner. The UK military is working 
closely with the Serbian Government and military to help develop Serbia’s role in fostering 
regional and wider stability and security, and help improve the Serbian public’s view of 
working with NATO and within the framework of Euro-Atlantic cooperation. 
Senior UK military personnel are also working with the Kosovo Government and security 
forces to help build a civilian-led military administration based on international law, doctrine 
and standards. This is having a positive impact on Kosovo’s relationship with NATO, its 
approach to national and regional security issues, and the bilateral relationship between the 
UK and Kosovo. It is helping Kosovo develop into an effective Euro-Atlantic security supplier 
and partner in the region. 
Ten years ago the Peace Support Operations Training Centre was established in Sarajevo; 
this was a UK concept which drew on multi-national donor funding support. It is now 
regarded as one of the top five international training centres in the world, delivering high 
quality NATO and UN-accredited training, rooted in UK values and military ethos, to students 
across the Western Balkans. This has helped strengthen UK political and military influence 
in the region, created a more professional cadre of pro-NATO, pro-UK Bosnian officers and 
non-commissioned officers, improved cross-border relations as a result of joint training 
and enabled well trained Bosnian troops to share the burden of security duties in Helmand 
province, Afghanistan. 
*   UK Government International Defence Engagement Strategy, February 2013, www.gov.uk/government/ 
publications/international-defence-engagement-strategy 
**  Also discussed in Scotland analysis: Defence, HM Government, October 2013, www.gov.uk/government/ 
collections/scotland-analysis 
International organisations and groupings 
2.34  Many of the UK’s international objectives are pursued through its activity in multilateral 
fora – either formal international organisations such as the UN, or more informal groupings 
such as the G8. The UK sits at the nexus of a huge variety of international groupings, 
of many of which it is a founder member, leading player or major contributor. It uses its 
leading role in these organisations to shape the international legal framework, and improve 
security and prosperity across the world.19 
19  See Chapter 1 (paragraphs 1.1–1.22) for more details on the policy goals the UK pursues through its 
membership of international organisations and groupings. 

50  Scotland analysis: EU and international issues
 The United Nations 
2.35  The UK was a founder member of the UN, which was established in 1945 as the 
centrepiece of the new global order fol owing the Second World War. The UN remains 
a key part of the international system to this day, and influence within it is crucial to a 
country’s ability to shape the global environment and promote its interests. 
2.36  The UK has a strong record of contributing to the UN’s activities and through it plays a key 
role in the world’s security and development. It is one of the five permanent members of the 
UN Security Council, which gives the UK influence at all levels in the UN. Its global diplomatic 
network is also invaluable, giving it the authority to address matters of international peace 
and security in the Security Council. The UK is also well represented on UN committees, 
giving considerable leverage on issues that affect its citizens. The UK makes a significant 
contribution to UN peacekeeping and is one of the top five financial contributors, paying 
around £365 milion in assessed contributions in 2011/12, or nearly 7 per cent of the total 
peacekeeping budget. The UK also contributes nearly 270 armed forces personnel to UN 
peacekeeping operations as well as providing police and civilian experts. 
2.37  If an independent Scottish state were to join the UN it would have to pay a share of 
assessed contributions. In comparison with countries that have a similar population size 
and economy to those of an independent Scottish state (Denmark, Austria, Norway, 
Slovenia or Ireland), it is estimated that Scotland’s assessed contribution, had it been a UN 
Member State in 2012, would have been between those of the highest and lowest paying 
comparator countries: 
Table 2.1: UN contributions of comparator countries 
Budget (total in US$ millions) 
Minimum contribution 
Maximum contribution 
of comparator countries 
of comparator countries 
(US$ millions) 
(US$ millions) 
UN Regular Budget (2,700) 
12.9 (0.48%) 
18.0 (0.67%) 
UN Peacekeeping Budget (7,500) 
50.6 (0.67%) 
63.8 (0.85%) 
2.38  If an independent Scottish state wished to deploy its own military forces in UN 
peacekeeping operations, it would bear the majority of the costs; the UN reimbursement 
for troop contributions is modest, based on additional costs only. 
2.39  The UK delivers for Scotland as a large and influential UN member which is party to most 
of the UN’s Specialised Agencies – see Annex B for a detailed analysis. An independent 
Scottish state’s influence would be dictated by its administrative and financial capacity 
to contribute to the work of Agencies, which may be less than that of the UK at present. 
Therefore an independent Scottish state may have less influence in some Agencies than 
Scotland currently does as part of the UK. 
2.40  The UK’s size and the range of its expertise mean that its voice is heard right across the 
range of international cooperation, from scientific endeavours such as CERN and the 
European Space Agency, to the bodies that keep the world communicating such as the 
Universal Postal Union and the International Telecommunication Union. Other examples 
include supporting the work of the World Health Organization on the International Health 
Regulations which help prevent and respond to acute public health risks that have the 
potential to cross borders and threaten people worldwide and which have helped prevent 
pandemics, such as severe acute respiratory syndrome (SARS) and avian influenza, from 
taking hold in any part of the UK; and ensuring that the international intel ectual property 
system is balanced and effective, and best able to protect the UK’s intel ectual property 
rights through the World Intellectual Property Organization. 

Chapter 2: The UK’s international networks and influence  51 
The Arctic 
2.41  As the most northerly country outside the Arctic itself, the UK has a long association 
with the Arctic, a region that matters to Scotland. The UK is an active player in the Arctic 
and has a long history of working closely and cooperatively with the eight Arctic States 
(Canada, Denmark, Iceland, Finland, Norway, Sweden, Russia and the US), indigenous 
peoples and others on the issues facing the Arctic, both bilateral y and multilateral y in 
international fora. 
2.42  The impact of climate change on the Arctic region has been significant. Arctic sea ice is 
shrinking rapidly – its extent in 2012 was the lowest on record. These changes are now 
thought to have the potential to affect European weather and climate, as well as the fish 
stocks that are economical y so important to countries in the north Atlantic and the North 
Sea. Reductions in sea-ice cover also mean the sea routes to and from Asia are becoming 
increasingly navigable; and improvements in technology mean the Arctic’s potential y large 
reserves of oil, gas, metals and rare earths are becoming more accessible. The Arctic is 
also an increasingly attractive destination for British tourists. Responding to these changes, 
while supporting rigorous protection of the environment, is one of the many chal enges 
facing the region and the wider world. 
2.43  The UK has a strong interest in these developments. It also has a large Arctic science 
community and extensive polar assets involved in Arctic research, including a research 
station in Svalbard, ice-capable research vessels and a fleet of research-capable aircraft, 
which have given the UK a major role in forming the international community’s response to 
the changing circumstances of the Arctic. The UK has been an observer state at the Arctic 
Council, the pre-eminent regional forum on environmental and sustainable development 
issues in the Arctic, since its inception in 1996. During that time, UK scientific expertise 
has contributed extensively to the work of the Council, including on issues such as Arctic 
biodiversity, Arctic Ocean acidification, persistent organic pol utants and climate change, to 
help inform Arctic policy development. 
2.44  The UK’s engagement in and understanding of the region also means British companies 
are well placed to undertake responsible business activity in the Arctic, which the UK 
Government supports and facilitates. UKTI’s Nordics and Baltics Network (NBN) has 
identified high value opportunities in the Arctic in mining, shipping, oil and gas and tourism 
sectors, and is supporting UK businesses, for example through an event to focus on Arctic 
mining opportunities in Finland, Norway and Greenland, to be held in December 2013. 
UKTI NBN teams work closely with the two SDI officers in Norway and Denmark to ensure 
that Scottish companies can benefit from the UK’s extensive networks and knowledge of 
the opportunities that exist in the region. 
2.45  As Scotland analysis: Defence shows, the UK also has clear security interests in the 
Arctic and is an active player in the defence of the region, notably through the Arctic 
Security Forces Roundtable, which aims to enhance multilateral Arctic security and safety 
operations and adapt to the changing environment and emerging missions in the Arctic.20 
2.46  In October 2013 the UK Government published a policy framework document on its Arctic 
policy setting out the detail of its interests in the Arctic, how it will work with Arctic States 
and the wider international community, and what expertise the UK can offer to help meet 
some of the long-term chal enges facing the region.21 
20  Scotland analysis: Defence, HM Government, October 2013, pages 63–64 
21  Adapting to Change: UK policy towards the Arctic, HM Government, October 2013 

52  Scotland analysis: EU and international issues 
An independent Scottish state and international organisations 
2.47  As set out in the Introduction, an independent Scottish state would be required to 
apply or negotiate to become a member of whichever international organisations it 
wished to join. Each organisation or grouping has its own criteria and processes for 
achieving membership. Membership of the UN would be fairly straightforward, although 
an independent Scottish state would not be a permanent member of the UN Security 
Council, as the UK is, as the five permanent members of the UN Security Council are fixed 
by Article 23 of the UN Charter. Other organisations, though, such as the EU and NATO, 
have stringent criteria and pre-conditions and a set procedure for negotiating the terms of 
membership, which may involve the unanimous approval of the existing members. 
2.48  In no case would membership be automatic. Membership of one organisation may 
also be dependent on being a participant in another; for example, a country wishing 
to join the European Bank for Reconstruction and Development must be a member of 
the International Monetary Fund, and membership of the European Investment Bank 
is dependent on membership of the EU. Membership of each of the individual UN 
Specialised Agencies must be applied for separately once a country has become a 
UN Member State.22 
2.49  There are associated start-up costs for new members of international organisations in 
additional to annual subscriptions. For example, in order to take up membership of the 
UN, an independent Scottish state would be required to establish an office in New York, 
and appoint a Permanent Representative and a supporting team to represent it in UN 
meetings. This would also be the case for membership of NATO. 
2.50  Annex C sets out and discusses in more detail the main international organisations of 
which the UK is a member. In many of them, the UK is permanently represented in the 
central decision making structures, such as the Security Council of the UN or the Board 
of Governors of the International Monetary Fund; an independent Scottish state, if it 
were to become a member of these organisations, would either have to seek election to 
these bodies or be represented on them by others. Membership of all organisations also 
requires subscriptions or other financial contributions. Broadly speaking, costs arising from 
an independent Scottish state’s membership of the Commonwealth might be comparable 
with those of New Zealand, which currently pays around £446,000 per annum, with an 
approximate further £3.4 mil ion in discretionary funds. There would be a likely cost of 
€3 mil ion per annum to the non-discretionary Council of Europe budgets. 
22  More detail on the accession processes of the UN Specialised Agencies, and other aspects of their 
membership and work, is set out at Annex B. 

Chapter 2: The UK’s international networks and influence  53 
Conclusion 
2.51  The analysis in this chapter has set out the UK’s role on the international stage. People 
in Scotland are currently well represented as part of the UK at an international level; in an 
independent Scottish state the capacity of their international representation to defend or 
promote their interests would be reduced. 
2.52  The UK has one of the highest international profiles and a global reputation. Scotland 
benefits from its own unique brand; it also benefits from the additional attraction the UK 
has to tourists, investors and students right across the world. The UK uses its soft power 
to promote Scottish cultural events international y, bring some of the brightest international 
students to its universities through its large scholarship programmes, and create links 
between schoolchildren at more than 1,000 Scottish schools with partners overseas. 
2.53  As a new state, an independent Scotland could seek to develop its own bilateral 
relationships and membership of whichever international institutions and organisations it 
wished to become a member of. It would have to decide which international organisations 
were priorities for it to be a member of and, fol owing the criteria for membership being 
met, bear the start-up costs of initiating its representation or membership and ongoing 
subscription costs. An independent Scottish state would be unlikely to wield such 
influence as it enjoys as part of the UK. 


Chapter 3: 
The European Union 
•   The UK uses its influence within the EU to Scotland’s advantage on a whole 
host of issues of particular interest to people and businesses in Scotland, such 
as budget contributions, fisheries, agricultural subsidies and Structural Funds. 
Scotland benefits from this and from the UK’s strong voice in Europe, where it 
contributes to and participates in discussions and negotiations from its position 
within the UK. 
•   The EU is a treaty-based organisation and the UK – not Scotland – is the 
contracting party to the Treaties of the EU. Independent legal opinion sought 
and published by the UK Government indicates that, as the remainder of the UK 
would be the same state as the existing UK with the same international rights 
and obligations, its membership of the EU would continue on existing terms. 
That includes the important opt-outs the UK has secured, allowing it to keep 
the pound and control of its borders and immigration policy, as well as a rebate 
from the EU budget, which sees a rebate of over £3 bil ion to the UK taxpayer 
each year. 
•   By contrast, since an independent Scottish state would be a new state, it would 
have to go through some form of accession process to become a member of 
the EU, which would involve negotiations on the precise terms of its membership. 
It cannot be assumed that Scotland would be able to negotiate the favourable 
terms of EU membership which the UK enjoys. Fol owing the introduction of this 
acquis – the body of EU law and practice that accession states are expected to 
adopt – all new EU Member States have been required to commit to joining both 
the euro and Schengen. The Scottish Government’s stated intention to retain 
the pound and join the Common Travel Area (CTA) is at odds with the EU’s long­
established conditions of EU accession, and is not in the Scottish Government’s 
gift. It would have to convince all 28 EU Member States to grant unanimous 
approval to change these conditions. 
•   Some Member States may be unwil ing to grant opt-outs to an independent 
Scottish state on measures which they have had to adopt themselves. Others 
have their own independence movements to consider, which may influence how 
they view an independent Scottish state’s membership of the EU. Scotland’s 
negotiations to join the EU could be complex and long, and the outcome could 
prove less advantageous than the status quo. 

56  Scotland analysis: EU and international issues 
•   As part of any accession process, an independent Scottish state would need to 
negotiate the terms under which it contributes to, and accesses funds from, the 
EU budget. To il ustrate the implications of independence, the impacts of three 
scenarios have been considered over the course of 2014–20. 
•   In respect of contributions to the EU budget, Scottish taxpayers currently derive 
a substantial benefit from the UK’s rebate. However, given the negotiating 
realities of the EU, it would be extremely difficult for an independent Scottish 
state to negotiate its own budgetary correction on accession (something no 
other Member State has ever done). Furthermore, it is inconceivable that an 
independent Scottish state would secure a correction as substantial as the UK 
rebate. Instead, as a new Member State it would have to contribute to the UK 
rebate like other Member States. Without a budgetary correction, it is estimated 
that an independent Scottish state would contribute a total of around €12.9 bil ion 
to the EU budget over the next Multiannual Financial Framework (MFF). This 
is around €2.9 bil ion higher (€1,100 more per household) over 2014–20 than if 
Scotland continues to be part of the UK. 
•   Fol owing recent decisions by the UK Government on intra-UK allocations of EU 
budget receipts for 2014–20, Scotland will receive €228 mil ion more in Structural 
Funds than if it were an independent state. On the Common Agricultural Policy 
(CAP) an independent Scottish state’s receipts are uncertain and would depend 
on the terms of accession, which would have to be agreed by all 28 Member 
States. Scotland has been allocated €3.6 bil ion in Pil ar 1 CAP receipts for 
2014–20, and the Scottish Government has claimed that an already independent 
Scottish state would be receiving direct payments of €196 per hectare by 2020, 
increasing its allocation in real terms by up to €950 mil ion over 2014–20. 
•   However, the key question is what would happen to Scottish CAP receipts if it 
were to become an independent Member State of the EU. With the EU budget 
ceilings agreed to 2020, any increase in Scottish CAP receipts would be at the 
expense of other Member States, all of which would need to agree to Scottish 
accession. There is also a risk that an independent Scottish state would be 
required to phase in receipts, in line with recent accessions. Given all the 
uncertainties, this paper considers two independence scenarios over 2014–20 
in respect of the EU budget – one where CAP receipts increase by €950 mil ion 
compared with Scottish receipts within the UK, and one where they fall by 
€1.2 billion. 
3.1   This chapter considers Scotland’s relationship with the EU. It examines the benefits to 
people and businesses in Scotland through the UK’s position as one of the largest EU 
Member States and the favourable terms of membership which the UK enjoys. It also 
considers the process for states wishing to join the EU and the complexities inherent in the 
negotiations for an independent Scottish state’s EU membership, given the terms which 
the current Scottish Government has said it aims to secure. Final y, it looks at the costs to 
people in Scotland in the event of an independent Scottish state joining the EU. 

Chapter 3: The European Union  57 
How the EU works 
The Council of the EU: The Council is the EU body which directly represents the 
governments of the Member States. In some areas, such as the EU’s finances, taxation, 
membership of the EU, foreign policy and defence policy, it makes decisions by unanimity; 
that is, each Member State has a veto over EU action. In most others, including decisions on 
the rules governing the European Single Market, decisions are taken by a qualified majority 
voting system. Fol owing changes in 2014, voting in the Council will reflect the respective 
size of the Member States’ populations. Therefore the UK, with a population of 62 mil ion, of 
a total EU population of 504 mil ion, will have just over 12 per cent of the vote. Scotland has 
1 per cent of the EU population. 
The European Council is the grouping of the leaders of the Member States and the 
President of the Commission, chaired by a permanent President. 
The European Parliament: Members of the European Parliament (MEPs) are distributed 
according to a set of criteria outlined in the Treaties; this includes, in addition to maximum 
and minimum caps on the number of MEPs from any given Member State, a requirement 
for representation of citizens to be digressively proportional. Of the 766 MEPs in the 
current session of the European Parliament (2009–14), the UK has 73, the third largest 
delegation behind Germany with 99 and France with 74. Of these 73 seats, six are for MEPs 
representing Scotland. 
The European Council recently adopted a decision on the composition of the European 
Parliament for the 2014–19 session. There are currently a number of derogations in place 
which end at the 2014 elections; the composition of the European Parliament therefore 
needed to be revisited to ensure the total number of MEPs respected the cap outlined in the 
Treaties of 751 MEPs, and reflected the other criteria set out in the Treaties, such as the cap 
on MEPs at 96 for any one Member State. The UK will continue to have 73 MEPs during 
the 2014–19 parliamentary term. Composition will be revisited again in advance of the 2019 
European Parliamentary elections. 
Further enlargements of the EU will have to accommodate new Member States’ delegations 
within the cap, and other Treaty criteria. It is impossible, therefore, to say with any certainty 
how many MEPs a new Member State would get. 
The European Commission: The European Commission is the EU’s executive arm, 
governed by a Col ege of Commissioners composed of one national of each Member State, 
regardless of that Member State’s population size, of whom one is the President. 
The Court of Justice of the European Union (CJEU): All Member States nominate one 
judge to each of the two Chambers of the CJEU, the Court of Justice and the General Court, 
regardless of population size. 

58  Scotland analysis: EU and international issues 
The UK in the EU 
3.2   The UK joined the European Economic Community (EEC), as it then was, in 1973, 
alongside Ireland and Denmark, as part of its first enlargement from the original six 
Member States. The UK has been a key player in the EU ever since. 
3.3   As one of the largest Member States, the UK’s size and importance are reflected in the 
composition of the EU’s two legislative bodies: the Council of the EU and the European 
Parliament. The UK currently has the equal highest number of votes in the Council (29) 
and the third largest European Parliament delegation (73 MEPs). Voting weights within 
the Council will change in 2014 to reflect directly Member States’ population size, which 
will reduce the current over-weighting for smal er Member States. As a result, the UK and 
other large Member States will have comparatively greater weight than they do now. The 
UK also uses its extensive and effective diplomatic presence in Brussels and Member 
States’ capitals to build al iances and secure agreements that promote the interests of the 
UK and all its people. 
3.4   The UK enjoys favourable terms of membership, reflecting its unique position and 
interests, which it has negotiated over a long period of time. It has secured opt-outs 
from the European single currency, the euro, which al ows it to keep the pound sterling 
as its currency, and from the Schengen travel area, which al ows it to maintain control 
of its own borders and immigration policy (although it does participate in the police 
cooperation aspects of the Schengen system). Only one other Member State, Denmark, 
has a permanent opt-out from the euro, and only Ireland also has an opt-out from the 
borders and immigration aspects of Schengen. The UK has also negotiated a rebate from 
the EU budget, worth £3.11 bil ion to UK taxpayers in 2012, and highly favourable fish 
quotas – both of which directly benefit Scotland and are a direct consequence of the UK’s 
negotiating weight. 

Chapter 3: The European Union  59 
Case study: Fisheries 
Fisheries management is subject to exclusive EU competence under the Common Fisheries 
Policy (CFP). This means that fisheries management decisions, negotiations on quotas and 
structural funding decisions are taken at EU level, with implementation detail devolved to a 
limited degree to Member States. Within the UK, the Scottish Government is responsible for 
managing Scottish fisheries, including quota management and enforcement of rules. 
Scottish interests are represented in CFP negotiations as part of the UK, and Scotland has 
an important role in shaping UK policy priorities. Scotland has around 60 per cent of UK 
fishing opportunities (by tonnage and by value) and around 40 per cent of UK fishermen. 
Approximately 40 per cent of UK spending under the current European Fisheries Fund (EFF) 
has been in Scotland (€55 mil ion out of €138 mil ion). 
Scotland benefits from UK influence in Europe, both in annual negotiations on management 
priorities and in discussions on the reform of the CFP framework itself, as shown by recent 
successes in the Fisheries Council. Reforms that will benefit Scottish fisheries (such as a 
more ‘regionalised’ CFP and the elimination of discarding of dead fish) are high priorities for 
UK government in reforming the CFP, and are areas that UK negotiators secured crucial 
agreements on in reform negotiations in 2013. 
Scottish fishermen currently enjoy access to EU waters across UK and other Member 
States’ (and some third countries’) territorial limits, subject to quota restrictions, under the 
CFP framework. An independent Scottish state that was not part of the EU would manage 
its own fisheries within its national waters, subject to any bilateral agreements it concludes 
with the EU and any other fishing nations. This would mean more direct control over Scottish 
fishing grounds and management measures, but any wider access beyond Scottish waters, 
and/or reciprocal agreements, would be subject to bilateral international negotiation with 
other countries and the EU. Access to funding under the EFF successor – the European 
Maritime and Fisheries Fund – would also cease. 
Membership of the EU would require an independent Scottish state to be part of the CFP 
and negotiate within that framework. Most immediately this would include determining its 
share of EU fishing opportunities, known as the ‘Relative Stability’ share of total al owable 
catches, which would involve dividing up the current UK share of over 100 different stocks. 
Although the CFP is based around free access to waters, there is no access for foreign 
vessels to Member States’ 0–6 mile limits, and access to the 6–12 mile limits is restricted 
based on historic rights. The rest of the UK’s access in the Scottish 0–12 mile zone and 
Scottish access in the rest of the UK’s 0–12 mile zone would need to be reconsidered, as 
would other agreements such as the application to Scotland of ‘Hague preferences’ that 
al ow the UK and Ireland to benefit from higher quota shares than would otherwise be 
the case. 
More general y, an independent Scottish state would need to take part in the full range 
of EU negotiations under the CFP, including the annual total al owable catches and quota 
agreement, discussions on limits of ‘days at sea’ and agreeing long-term management 
plans for stocks (e.g. cod). It would also need to seek to influence the position the European 
Commission took in discussions with third countries such as Norway and Iceland, where 
agreements may impact on Scottish interests. This would be without the wider influence and 
voting strength that the UK as a whole can deploy. While an independent Scottish state and 
the continuing UK may chose to cooperate on issues of mutual interest, this cooperation 
could not be guaranteed. 

60  Scotland analysis: EU and international issues 
Case study: Fisheries (continued) 
As fisheries management is subject to exclusive EU competence, an independent Scottish 
state in the EU would be one of many Member States seeking to negotiate fisheries 
management arrangements (including stable shares of total al owable catches) that address 
its own priorities under an existing CFP framework. 
The influence an independent Scottish state could exert within fisheries talks would depend 
on the al iances it could build with like-minded Member States and, for example, the number 
of votes it could deploy as a relatively small Member State under a qualified majority system 
in the Fisheries Council. The extent to which an independent Scottish state could drive 
reforms in EU policy would also depend on what priorities it might wish to pursue. 
3.5   In certain areas of EU policy, the UK has set the agenda in the 40 years of its membership. 
The UK is a strong voice for open, competitive economic policies, and was one of the 
prime shapers of the European Single Market, which has been of such immense benefit to 
businesses in the UK and across Europe. As the countries of the euro area look for ways 
of integrating their economic governance more closely, the UK is the leading voice in the 
EU arguing for a renewed focus on increasing competitiveness and growth within the EU. 
A strong UK, speaking with one voice, is the best way of ensuring that the EU does not 
retreat into protectionism or the erosion of the European Single Market. 
3.6   Scotland benefits from the UK’s strong voice in Europe and is able to contribute to and 
participate in discussions and negotiations from its position within the UK. While foreign 
and European affairs are reserved to the UK Government under the current devolution 
arrangements, it routinely consults the administrations in Wales, Northern Ireland and 
Scotland when developing the UK’s position in EU negotiations where they have an 
interest. There is also a Scottish Government EU Office based in Brussels, which forms 
part of the UK’s representation to the EU. The UK Government and the three devolved 
administrations participate in a Joint Ministerial Committee on the European Union 
consisting of UK Government, Scottish, Welsh and Northern Ireland Ministers. This 
Ministerial committee operates as one of the principal mechanisms for consultation on UK 
positions on EU issues which affect devolved matters. This close working can extend to 
Ministers from the Scottish Government joining the UK delegation attending EU Council 
meetings and, when appropriate, speaking on behalf of the UK. 
3.7   The UK has some of the most inclusive policy making arrangements for its regions in the 
whole of the EU. Of all the other Member States, only Belgium al ows a devolved region 
(in its case Flanders) to represent it at Councils; and then only in respect of Fisheries 
Councils, given that Flanders is the only part of Belgium with a coastline. 
3.8   The UK uses its influence on behalf of Scotland on a whole host of issues of particular 
interest to people and businesses in Scotland, from budget contributions to fisheries 
quotas, health and safety regulations to agricultural subsidies and Structural Funds. 

Chapter 3: The European Union  61 
Case study: The EU Third Energy Package 
The UK Government secured a special provision for Scottish energy companies to enable 
them to comply with European legislation without needing to sell off parts of their business. 
A key aspect of the EU’s Third Energy Package was that utilities companies in Member 
States must ful y separate their transmission activities from the production and supply 
aspects of their businesses, to help promote competition and exchange between countries. 
Two Scottish electricity companies, Scottish Power and Scottish and Southern Electricity, 
would have fal en foul of this requirement. In order to comply, the two companies would have 
had to sell off their transmission businesses, which was not in their commercial interest. 
The UK Government successful y argued for a special provision covering the Scottish 
situation, so that instead of having to split the different aspects of their businesses, they 
would have to demonstrate that the safeguards in the domestic regulatory framework 
provided the same level of consumer protection as separating the businesses. This outcome 
protected the Scottish energy companies from sel ing off their businesses, with minimal 
changes to their internal governance. The electricity and gas market regulator, the Office of 
Gas and Electricity Markets (Ofgem), in line with the European Commission’s opinion, has 
now certified both companies as compliant with EU legislation. 
Case study: Farmed salmon 
The UK fought hard for the right of the Scottish salmon industry to secure protection against 
what it saw as unfair (dumped and subsidised) trade from imported Norwegian salmon. The 
UK successful y secured anti-dumping and safeguard measures despite fierce opposition 
within Europe. Although the weight of economic interests against measures final y prevailed 
a few years later, the UK secured protection for the Scottish salmon industry in the form of 
safeguard quotas during 2005, and anti-dumping tariffs and then minimum import prices 
between 2005 and July 2008. This protection provided the Scottish salmon industry 
with an important ‘breathing space’ to help it rationalise and improve the productivity of 
its operations. 
Case study: Cashmere 
In 1999, fol owing a successful World Trade Organization chal enge against EU quotas 
on the import of bananas, the US announced its intention to impose retaliatory tariffs of 
100 per cent on a range of high profile EU exports to the US. Among these products were 
cashmere sweaters, an industry which, at the time, exported around $30 mil ion to the US 
and employed around 2,000 people in Scotland. Persuading the US to remove cashmere 
from the retaliation list was one of the top trade policy objectives of the then Department of 
Trade and Industry, and lobbying took place at the highest level. This objective was achieved 
when in September 2000 the US agreed to remove the product from the list. 

62  Scotland analysis: EU and international issues 
An independent Scottish state and the EU 
3.9   The Scottish Government has stated that an independent Scottish state would be a 
member of the EU and that membership would be on the same terms as the UK currently 
enjoys.1 However, these assertions are not accepted by many experts and informed 
commentators.2 This section looks at the question of how an independent Scottish state 
might become a member of the EU, and what the terms of its membership might be. 
Could Scotland automatical y continue in membership? 
3.10   The EU is a treaty-based organisation. From the Treaty of Rome, signed by the original 
six Member States in 1957, to the Lisbon Treaty of 2007, the powers and membership 
of the EU flow from its Treaties, signed and ratified by each Member State. The UK is a 
contracting party to the Treaties of the EU; Scotland is not. 
3.11   As set out in legal opinion sought and published by the UK Government in Scotland 
analysis: Devolution and the implications of Scottish independence, since it is clear that 
under international law the rest of the UK would be the same state as the UK with the 
same international rights and obligations, its EU membership would continue, and on 
its existing terms. An independent Scottish state could not automatical y become a new 
member of the EU upon independence because there is no explicit provision for this 
process in the EU’s own membership rules. Nor would an independent Scottish state 
automatical y ‘inherit’ the UK’s opt-outs.3 
3.12   The President of the European Council – the body which decides whether and how to 
amend the Treaties or admit a new Member State – has said: “The separation of one part 
of a Member State or the creation of a new State would not be neutral as regards the 
EU Treaties. The European Union has been established by the relevant treaties among 
the Member States. The treaties apply to the Member States. If a part of the territory 
of a Member State ceases to be a part of that state because that territory becomes a 
new independent state, the treaties will no longer apply to that territory. In other words, 
a new independent state would, by the fact of its independence, become a third country 
with respect to the Union and the treaties would, from the day of its independence, not 
apply any more on its territory. Under Article 49 of the Treaty on European Union, any 
European State which respects the principles set out in Article 2 of the Treaty on European 
Union may apply to become a member of the Union according to the known accession 
procedures. In any case, this would be subject to ratification by all Member States and the 
Applicant State.”
4 This echoes the position of the President of the European Commission, 
who has said: “The EU is founded on the Treaties which apply only to the Member States 
who have agreed and ratified them. If part of the territory of a Member State would cease 
to be part of that state because it were to become a new independent state, the Treaties 
would no longer apply to that territory. In other words, a new independent state would, 

1   Deputy First Minister, Nicola Sturgeon MSP, in oral evidence to the Foreign Affairs Committee inquiry Foreign 
Policy Considerations for the UK and Scotland in the Event of Scotland Becoming an Independent Country, 
HC 643 2012–13, May 2013, Ev 54 
2  Dr Fabian Zuleeg, Chief Economist, European Policy Centre; Catarina Tul y, Director, FromOverHere; Professor 
Malcolm Chalmers, Research Director, Royal United Services Institute; Dr Jo Eric Mukens, Senior Lecturer, 
Law School, London School of Economics in evidence to the Foreign Affairs Committee inquiry Foreign Policy 
Considerations for the UK and Scotland in the Event of Scotland Becoming an Independent Country. 

3  Scotland analysis: Devolution and the implications of Scottish independence, UK Government, 2013, page 34 
4  Remarks in a press conference, Madrid, 12 December 2013, www.consilium.europa.eu/uedocs/cms_Data/ 
docs/pressdata/en/ec/140072.pdf 

Chapter 3: The European Union  63 
by the fact of its independence, become a third country with respect to the EU and the 
Treaties would no longer apply on its territory.”

3.13   This would be a unique situation: there is no precedent for one part of a Member State 
becoming independent and then seeking to become a Member State of the EU in its 
own right. 
EU accession: the process 
3.14   Despite the lack of precedent and uncertainty around the process which would unfold 
in the event of Scotland becoming an independent state, there is value in examining 
the accession process as there are aspects of it which must apply regardless of the 
background context. The legal basis for becoming a member of the EU is Article 49 of 
the Treaty on European Union. Under Article 49, states need to apply for membership, 
obtain unanimous support of the European Council for this request and have membership 
approved through an Accession Treaty, ratified in accordance with the constitutional 
requirement of each Member State. 
3.15   The Scottish Government has stated that its preferred legal basis for joining the EU is the 
‘ordinary revision procedure’ (ORP) set out in Article 48 of the Treaty on European Union, 
not Article 49. The ORP is the mechanism by which the Treaties can be amended and has 
never been used to expand the membership of the EU. The European Parliament may also 
insist on holding a Convention, which enjoys broad membership, to examine the proposals 
and adopt a recommendation by consensus in advance of the Intergovernmental 
Conference negotiations. It is unlikely that Member States, which have to agree to any use 
of Article 48 by consensus, or the Commission or the European Parliament, which also 
have to be consulted, would agree to Article 48 being used in this unprecedented way, 
given that Article 49 explicitly provides for the process that must be fol owed for a state to 
become a member of the EU. 
3.16   Even if the Member States agreed to use Article 48, the subsequent negotiations would 
be likely to be very complex. Unlike Article 49, Article 48 al ows any aspect of the Treaties 
to be revised, which could open the way to other Member States, the Commission or 
European Parliament to use the consequent negotiation to call for revisions to the Treaties 
in other areas, thus linking an independent Scottish state’s membership negotiations to 
a wider, complex set of negotiations on other aspects of reforming the EU. The resulting 
Treaties, if they altered the competences or functioning of the EU in significant ways as 
well as providing for an independent Scottish state’s membership, could be subject to 
referenda in several Member States before they could be ratified. 
3.17   The Scottish Government has stated it would wish to secure opt-outs from joining the euro 
or the Schengen area;6 something no other new Member State has asked for. In any case, 
it is clear that an accession negotiation would be required, to discuss the terms and timing 
of membership, and this negotiation would be subject to the unanimous agreement of the 
existing Member States. Paragraphs 3.18–3.31 examine the accession process that new 
Member States have recently gone through. 
5   Letter to the Lords Economic Affairs Committee, 10 December 2012, www.parliament.uk/documents/lords­
committees/economic-affairs/ScottishIndependence/EA68_Scotland_and_the_EU_Barroso’s_reply_to_Lord_ 
Tugendhat_101212.pdf 

6   Scotland’s Future: Your guide to an independent Scotland, Scottish Government, November 2013 

64  Scotland analysis: EU and international issues 
Opt-outs and derogations 
As the EU has developed since the UK’s accession in 1973, it has taken on new areas of 
responsibility. The UK decided that some of these were not in its interests, and negotiated 
opt-outs or derogations from them. For example, in the Maastricht Treaty of 1992, the UK 
secured permanent opt-outs of membership of the single currency and the ‘social chapter’, 
although a later UK government dropped the latter in 1997. Along with Ireland, the UK also 
has a permanent opt-out from the Schengen passport-free travel area (although it does 
participate in the police cooperation aspects of the Schengen system). It has the right to opt 
in to legislation proposed on the EU’s area of freedom, security and justice (often referred to 
as Justice and Home Affairs or JHA), and the right to opt out of measures building on the 
police cooperation aspects of the Schengen system. 
Similarly, Denmark has also secured opt-outs, exempting it from participation in the euro, 
the Common Security and Defence Policy, and cooperation in the area of freedom, security, 
justice and EU citizenship (although the position negotiated for Denmark, that EU citizenship 
is dependent on and additional to, and does not replace, national citizenship, now applies to 
all Member States). 
3.18   Accession negotiations cover important and complex issues and the EU Member States 
must reach unanimous agreement at numerous decision points to al ow a candidate 
to progress through them. Once an applicant state has submitted its application to join 
the EU, the Council of the EU (and the European Council) considers it, and refers it to 
the Commission for an opinion.7 The European Parliament and national parliaments are 
notified. Following a Commission opinion that recommends opening negotiations, the 
Council of the EU (and, in practice, the European Council) agrees by unanimity to open 
accession negotiations, and also agrees by unanimity a framework that will govern those 
negotiations. 
3.19   A ‘screening’ process takes place to assess the candidate country’s compliance with the 
EU acquis – the body of EU law and practice that accession states are expected to adopt, 
and which is divided into 35 negotiating ‘chapters’ covering different policy areas, such 
as fisheries or taxation. Although the negotiations are carried out by the Commission, 
the Member States are very closely involved throughout the process and take the final 
decisions: they unanimously agree the ‘Common Position’ for each chapter that assesses 
the candidate’s preparedness, define what further progress is necessary, and set opening 
and closing chapter benchmarks that the candidate will need to meet. They formal y 
agree by unanimity whether to open chapters in an Accession Conference, and agree by 
unanimity when to provisional y close them, doing so only once the candidate country has 
met the requirements. 
3.20  In the case of an independent Scottish state, it could be expected that the technical 
aspect of these negotiations would be relatively straightforward: by virtue of having been 
part of the UK, it would already meet the membership conditions and comply with the vast 
majority of the EU acquis – except those areas where the UK itself has opt-outs, opt-ins or 
other derogations from the acquis. 
7   An ‘applicant’ is a country which has applied to join the EU. A ‘candidate’ is a country in accession negotiations 
with the EU. An ‘accession state’ is a country that has completed negotiations but has not yet formal y joined 
the EU. 

Chapter 3: The European Union  65 
3.21  However, should any substantive or political difficulties arise, this could affect a candidate’s 
progress in the negotiations. For example, as the negotiating frameworks make clear, 
accession to the EU implies the acceptance of the EU’s acquis, and that a candidate 
country will have to commit to apply the acquis as it stands at the time of its accession.8 
3.22  It is possible, however, for a candidate country to negotiate special arrangements. The 
onus is on the candidate county to make the case and persuade the EU and its Member 
States to grant it flexibility. For example, the EU may grant candidates transitional periods 
on a range of issues so that they have more time to align and comply with the EU acquis 
post-accession. However, the EU makes explicit that these provisions will only be granted 
exceptionally. 
3.23  In very exceptional cases, the candidate may be granted permanent derogations from 
particular areas of the acquis. However, permanent derogations are rarely granted 
and, even then, have tended to be fairly limited in scope (e.g. on the acquisition of 
secondary residences). 
3.24  In line with precedent, the Commission has already stated that all new Member States 
will be expected to adopt the euro and Schengen portions of the acquis. Moreover, as 
no candidate country that has joined the EU since these areas became part of the EU 
acquis have sought to opt out from these Treaty commitments, the Scottish Government’s 
stated intention to do so would place an independent Scottish state in uncharted territory.9 
Requests from the candidate for unprecedented concessions and exceptions to the 
acquis, particularly if they concern important and sensitive policy areas, have the potential 
to lengthen the process considerably and are not guaranteed a successful outcome. 
3.25  Once the EU Member States have agreed to close all the negotiating chapters, the 
Commission recommends concluding accession negotiations. The Council of the EU 
and the European Council must reach unanimous agreement on the decision to close 
negotiations, a target date for accession and the content of the Accession Treaty. The 
draft Accession Treaty is submitted to the European Parliament for its consent, acting by 
a majority of its entire membership (i.e. 376 votes out of 751, fol owing the 2014 European 
Parliamentary elections). 
3.26  All parties – the existing Member States and the accession state – must sign the 
Accession Treaty. The Treaty must then be ratified, again by all parties. This often involves 
a referendum in the accession state. Once each Member State and the accession state 
have completed their ratification processes successful y, the Council of the EU issues a 
Decision, agreed by unanimity, agreeing the admission of the new Member State. The 
Accession Treaty takes effect, and the candidate accedes as a Member State. 
8   The negotiating framework establishes the guidelines and principles for the accession negotiations with each 
candidate country. The European Commission draws up a draft negotiating framework, the EU Member States 
adopt it and the Council Presidency presents it at the start of the accession negotiations. 
9   Scotland’s Future: Your guide to an independent Scotland, Scottish Government, November 2013 

66  Scotland analysis: EU and international issues 
How long do accession negotiations take? 
There is no set timetable for accession negotiations. The speed of the process depends on 
how closely aligned the applicant state is to the EU acquis and to broader EU conditionality, 
on how capable its administrative and judicial systems are of applying what the EU requires 
of them, and on the nature of the candidate’s demands for special arrangements. 
The countries that entered accession negotiations to join the EU in the fourth wave of 
enlargement already applied large swathes of the EU acquis as it then stood by virtue of their 
membership of the European Economic Area. This, and the fact that they required limited 
transitional or specific arrangements, al owed them to make extremely rapid progress in 
their negotiations. For example, Norway moved from opening accession negotiations to the 
signing of the Accession Treaty in just over a year (April 1993 to June 1994), although people 
in Norway voted against this in a referendum on EU membership. Austria, Finland and 
Sweden moved from the opening of accession negotiations to becoming EU members in 
just over two years (December 1992 to January 1995). 
But those states were in a rather unusual position. Recent rounds of accession negotiations 
have taken much longer. Poland, Hungary, the Czech Republic, Estonia, Slovenia and 
Cyprus began their accession negotiations in March 1998 and joined the EU in May 2004. 
Croatia, which joined the EU on 1 July 2013, began its accession negotiations with the EU 
in October 2005. 
None of these negotiations involved the candidate country asking for significant opt-outs or 
a rebate on their contributions to the EU budget. 
3.27  Recent EU negotiating frameworks now recognise the fact that, although the shared 
objective of negotiations is accession to the EU, the negotiations are an open-ended 
process whose outcome cannot be guaranteed beforehand. On a small number of 
occasions, despite having completed the negotiation process, a candidate country has 
not acceded to the EU as a result of its ultimate decision (and not necessarily in line with 
its government’s recommendation) that their greater national interest is better served by 
not joining the EU. 
3.28  The people of Norway have twice reached this conclusion. The first time was after having 
completed accession negotiations to the European Communities at the same time as the 
UK, Ireland and Denmark. Although the EEC had agreed special arrangements in order 
to address specific problems faced by Norway (notably on agriculture and fisheries), and 
the Norwegian Government had decided to accept these arrangements in signing its Acts 
of Accession on 22 January 1972, a majority of the Norwegian population chose to reject 
the EU’s offer in a referendum. Consequently, the Norwegian Government decided that 
Norway would not complete its accession process. The Norwegian people subsequently 
reached the same negative conclusion in 1994 about the deal that Norway had secured in 
its second set of accession negotiations with the EU. 

Chapter 3: The European Union  67 
Other Member States’ views 
3.29  As all 28 Member States would have a veto on both the process for an independent 
Scottish state’s accession, and on the terms of its membership, the views and 
reservations of other Member States must be taken seriously. The House of Commons 
Foreign Affairs Committee noted in their report into the foreign policy considerations 
for the UK and Scotland in the event of independence that the Scottish Government 
“underestimates the unease which exists within the EU Member States and EU institutions 
about Scottish independence”.10 The European Policy Centre set out in its evidence to the 
Committee that should an independent Scottish state seek to secure favourable terms 
of EU membership, which may prove an attractive model for other potential breakaway 
regions within Europe or aspirant members, other Member States may view this as a more 
palatable political reason to reject an independent Scottish state’s membership while at 
the same time quashing a precedent for independence which may resonate within their 
own countries.11 Given the precedent that an independent Scottish state’s membership 
of the EU would set, Member States coping with domestic independence movements 
in their own countries might object to an independent Scottish state’s application for EU 
membership, regardless of the terms of membership sought. Even Member States without 
these domestic considerations may have concerns about further fragmentation of the 
EU. In the event of a vote for independence this would be the wider political backdrop for 
an independent Scottish state’s application to join the EU. It is far from straightforward 
and therefore the Scottish Government may well find that it is unable to secure terms of 
membership in line with its domestic political assertions, as others have recognised.12 
3.30  As an example, the Spanish Prime Minister Mariano Rajoy has commented publicly that 
“It is very clear to me, as it is to everybody, that a region that obtains independence 
which is part of a nation state of the EU will stay outside the EU. It’s good that the 
citizens know this, the Scottish know this, as well as citizens of the EU… The treaties 
of the European Union apply only and exclusively to member states that have agreed 
to them and ratified them. If a region or territory of a member state breaks away and 
becomes a new independent country they will become a third country, with respect to 
the EU, and its treaties won’t apply to them… This is the law – and the law as it is in all 
the European states – and it is natural that it is applied.”
13 This suggests that the process 
for an independent Scottish state to become an EU Member State and the terms of that 
membership are unlikely to be as smooth as stated by the Scottish Government. As others 
have also suggested, the Scottish Government may well find that it is unable to secure the 
terms of membership it has asserted it would achieve. 
3.31  In its paper Scotland in the European Union, the Scottish Government appears to suggest 
that the agreement reached between the UK Government and Scottish Government 
binds the UK to specific actions in relation to an independent Scotland’s application for 
EU membership. Under the ‘Edinburgh Agreement’ both governments committed to 
“continuing to work together in good faith in the light of the outcome of the referendum, 
whatever it is”; nothing further. It does not mean that representatives of the continuing 
10  Foreign Affairs Committee, Sixth Report, UK Parliament, www.publications.parliament.uk/pa/cm201213/ 
cmselect/cmfaff/643/64302.htm 
11  Foreign Affairs Committee, Written Evidence, UK Parliament, www.publications.parliament.uk/pa/cm201213/ 
cmselect/cmfaff/643/643we01.htm 
12   Dr Fabian Zuleeg, Chief Economist, European Policy Centre; Catarina Tul y, Director, FromOverHere; Professor 
Malcolm Chalmers, Research Director, Royal United Services Institute; Dr Jo Eric Mukens, Senior Lecturer, 
Law School, London School of Economics in evidence to the Foreign Affairs Committee inquiry Foreign Policy 
Considerations for the UK and Scotland in the Event of Scotland Becoming an Independent Country 

13   http://news.stv.tv/politics/250628-mariano-rajoy-says-independent-scotland-would-stay-outside-the-eu/ 

68  Scotland analysis: EU and international issues 
UK would or could facilitate everything that the Scottish Government has said it hopes to 
achieve through independence, for example on the terms of its EU membership.14 
What would the terms of an independent Scottish state’s 
EU membership be? 
3.32  As set out above, an independent Scottish state’s negotiations with the continuing UK 
and other existing Member States to join the EU would be detailed, complex and resource 
intensive. They would address the terms of an independent Scottish state’s membership, 
including complex areas such as fisheries quotas and its financial contributions. They 
would have far-reaching implications for an independent Scottish state and the continuing 
UK as they would also need to address an independent Scottish state’s position in 
relation to the European single currency and the Schengen free movement area. Under 
the terms of the EU Treaties – and as stipulated explicitly in accession treaties – all new 
Member States are formal y obliged to make the political and legal commitment to join 
the economic and monetary union, adopting the euro as their currency once they meet 
the necessary monetary and budgetary convergence criteria. The mechanism for an 
independent Scottish state to become a member of the EU would also depend on the 
outcome of negotiations and on the attitude of other EU institutions and Member States. 
Negotiations on the terms of EU membership for an independent Scottish state are 
therefore likely to be lengthy and complex. It could not be guaranteed that an independent 
Scottish state’s negotiations would be completed within the current Scottish Government’s 
preferred 18-month timeframe for joining the EU. 
3.33  Paragraphs 3.34–3.61 examine certain parts of the acquis – the body of EU law and 
practice that accession states are expected to adopt. 
The euro 
3.34  As part of the negotiations of its EU membership, an independent Scottish state would 
need to resolve the question of euro membership. The EU Treaties oblige EU Member 
States to adopt the euro upon meeting certain monetary and budgetary convergence 
criteria; only the UK and Denmark have negotiated exemptions. Under EU enlargement 
criteria, membership of the single currency is obligatory for all accession states, and all 
countries that have joined the EU since 1993 have been formal y required to commit to 
adopt the euro in due course.15 
3.35  The implications of different currency options, including euro membership, for an 
independent Scottish state have been set out in more detail in Scotland analysis: Currency 
and monetary policy
, which was published in April 2013. It concludes that continuing 
membership of the UK is in the best economic interests of Scotland and the rest of the 
UK. None of the options under independence would serve an independent Scottish state 
as well as the current arrangements within the UK. 
3.36  The current Scottish Government’s stated policy of a formal sterling currency union with 
the rest of the UK is at odds with the formal EU requirement for a commitment to join the 
14   Scotland in the European Union, Scottish Government, November 2013, page 83: “Accordingly in approaching 
the question of Scotland’s independent membership of the EU, the Scottish Government is confident that the 
UK Government will ful y support this process, and will do its utmost to ensure the procedure is completed 
smoothly and timeously.” 
15   Under its Accession Treaty, Sweden is obliged to join the euro area once it meets the necessary conditions. 
Although the Swedish people rejected euro membership in a 2003 referendum, and Sweden has yet to fulfil 
the final criterion (membership of the European Exchange Rate Mechanism (ERM II) , the Swedish Government 
acknowledges that the political and legal obligation persists, although it has set no timetable for meeting it. 

Chapter 3: The European Union  69 
euro, as well as acceptance of the Maastricht conditions on deficit and debt, as part of 
the acquis. Since an independent Scottish state would be a new state and would have to 
go through some form of accession process to become a member of the EU, it would in 
principle be required to make a formal commitment to adopt the euro at some time in the 
future, unless it were able to negotiate a formal opt-out. Such a decision would not be in 
the hands of the continuing UK or an independent Scottish state but would require the 
agreement of all 28 EU Member States. 
3.37  Adopting the euro would require serious consideration by an independent Scottish 
state. There would be a significant one-off cost to the economy from the change-over of 
notes and coins and from changes to business accounting and payment systems. If an 
independent Scottish state were to adopt the euro, monetary policy set by the European 
Central Bank would be likely to be less well suited to the Scottish economy than that 
currently set by the Bank of England. 
3.38  At a macroeconomic level, euro area monetary policy would be set for the euro area as a 
whole, and an independent Scottish state’s size means that its economic conditions would 
have limited influence on euro area monetary policy. Less well adapted monetary policy 
could put more pressure on an independent Scottish state’s fiscal policy to compensate 
for the poorer suitability of monetary policy. 
3.39  Adopting the euro would result in an independent Scottish state being subject to sanctions 
and stronger fiscal and economic rules than non-euro area countries under the EU’s 
Stability and Growth Pact and the European Semester. For example, it would be required 
under Article 126.1 of the Treaty on the Functioning of the European Union (TFEU) to “avoid 
excessive deficit”, defined as a deficit of 3 per cent of Gross Domestic Product (GDP) 
and a debt of 60 per cent of GDP. The UK, as a result of its opt-out from the euro under 
Protocol 15 of the TFEU, is only required to “endeavour to avoid excessive deficit”. The 
UK cannot face any form of sanctions under the Stability and Growth Pact as a result of 
Protocol 15, which exempts the UK from coercive measures. 
3.40  In the event that an independent Scottish state failed to avoid excessive deficit and 
was placed in the EU’s excessive deficit procedure, the European Council would agree 
recommendations on correcting the deficit. These would set out the measures that an 
independent Scottish state should take to get its deficit below the 3 per cent target. In the 
event that these recommendations were not implemented, the Council of the EU could 
decide, on the basis of a Commission recommendation, that an independent Scottish 
state had failed to take effective action to correct the deficit and it could subsequently face 
annual fines from the EU up to 0.5 per cent of its GDP. 
3.41  In the event that an independent Scottish state did not have an excessive deficit, it would 
still be required to make progress towards a Medium-Term Budgetary Objective, which 
is a deficit well below 3 per cent. Again, in the event of inadequate action to meet this 
objective, an independent Scottish state could face sanctions under EU rules. Under the 
recently agreed reform to euro area governance (the Budgetary Monitoring Regulation, 
commonly known as ‘the two pack’), an independent Scottish state would have to 
submit a draft budgetary plan to the Commission every October for the opinion of the 
Commission and for discussion by other euro area Member States. 
3.42  As well as stronger fiscal rules, an independent Scottish state would also face stronger 
economic surveil ance measures if it were to join the euro. Under the EU’s new 
macroeconomic imbalances procedure, an independent Scottish state could face 
sanctions if an excessive macroeconomic imbalance in its economy was identified by 
the Council and it failed to correct it in sufficient time. In addition, it could face sanctions 

70  Scotland analysis: EU and international issues 
in the form of what is known as macro-conditionality, where budget payments would be 
suspended in the event that it did not comply with economic and fiscal recommendations. 
The latter would apply even if an independent Scottish state was not a member of the 
euro. The UK has secured an opt-out from this. 
3.43  In addition, it is worth considering the trajectory of euro area governance which is currently 
toward much closer forms of financial, fiscal and economic integration. The President 
of the European Council is currently leading a process to create a ‘genuine economic 
and monetary union’. On the financial side, agreement has been reached on a Single 
Supervisory Mechanism giving the European Central Bank supervisory responsibility 
for euro area banks. No decisions have been taken on the shape of further fiscal and 
economic integration but a number of possible proposals have been put forward, including 
contractual arrangements between the EU and euro area Member States on reforms they 
would be required to undertake. Many of those countries that have not yet joined the euro 
have decided to sign up to closer integration measures which will eventual y apply to them 
when they join. 
3.44  Of course, an independent Scottish state may not be ready to join the euro immediately on 
joining the EU. Those countries that are committed to join but have not yet met the criteria 
for doing so have what is cal ed a ‘derogation’. Those countries cannot face sanctions 
before they join the euro (apart from in the form of macro-conditionality as outlined above) 
but must take steps to meet the convergence criteria to ensure their economies are ready 
to join the euro. Progress is assessed annual y. The UK is not required to prepare to join 
the euro given its opt-out. 
The European Stability Mechanism 
The European Stability Mechanism (ESM) was inaugurated on 8 October 2012 and is 
a permanent mechanism providing financial assistance to euro area Member States 
experiencing or threatened by financing difficulties. The ESM has provided financial 
assistance to Spain (up to €100 bil ion, with the objective to recapitalise Spanish banks) 
and Cyprus (€9 bil ion). Euro area financial assistance to Ireland, Portugal and Greece 
was provided by its predecessor, the temporary European Financial Stability Facility. The 
members of the ESM are the euro area Member States, and EU members that adopt the 
euro are expected to join the ESM. The UK is not a member of the ESM, and has no liability 
for ESM assistance. 
Schengen 
3.45  Membership of the Schengen area has been part of the EU legal framework since 1999 
and all new members of the EU since 1999 have been required to commit to joining 
the Schengen area. The Schengen area is founded upon the Schengen Agreement of 
1985, which along with its related acquis was integrated into the EU Treaties in 1999. 
The principal purpose of the Schengen area is to facilitate the free movement of persons 
through the removal of internal border controls between participating countries, which the 
EU regards as a fundamental goal for new Member States. This means that movement 
across internal Schengen borders is general y free from checks. Common rules and 
procedures are applied across Schengen countries with regard to visas for short stays, 
asylum requests and external border controls. 
3.46  At present 22 EU Member States are full members of the Schengen area, along with 
four non-EU European countries. Four other EU Member States are working to join 

Chapter 3: The European Union  71 
the Schengen area.16 If an independent Scottish state were to join the Schengen area, 
it would need to complete a separate Schengen membership process. This includes 
implementation of all EU Schengen acquis measures into national law and extensive work 
to build command centres and IT systems supported by flexible border force and policing 
resourcing and provision of high level technical equipment. An evaluation process would 
assess whether they had met the criteria before a decision to al ow them to join ful y was 
taken. 
3.47  Only the UK and Ireland have a permanent opt-out from joining the border aspects 
of Schengen and are therefore able to maintain their own border control systems 
permanently. Both the UK and Ireland participate in the police cooperation aspects of 
the Schengen system. 
3.48  The UK and Ireland, with Guernsey, Jersey and the Isle of Man, are instead members of 
the Common Travel Area (CTA). The CTA al ows people to travel between the participating 
jurisdictions without internal borders for immigration purposes. 
3.49  Membership of the border and immigration parts of Schengen is incompatible with 
membership of the CTA, but full membership of Schengen is now a condition of EU 
membership for new Member States. The Scottish Government has stated that an 
independent Scottish state would seek to join the CTA, not the border and immigration 
parts of Schengen – a significant opt-out demand that will have implications for its 
negotiations with all Member States on EU membership.17 This opt-out would need 
to form part of an independent Scottish state’s Act of Accession to the EU, as that 
carries conditions for the application of the Schengen accession process referred to in 
paragraph 3.24. 
3.50  Future papers in the Scotland analysis series will consider these issues and their 
implications for an independent Scottish state in more detail. 
Justice and Home Affairs 
3.51  The JHA aspects of the EU acquis cover particularly sensitive areas including immigration, 
policing and criminal law. The UK has therefore negotiated special conditions for its 
participation, al owing it to choose whether to take part in each proposed piece of 
legislation. The UK has used this power to protect the nation from measures that it does 
not wish to take part in, such as those that would require changes to UK immigration law, 
while participating where it is in UK interests to do so; for example, the UK participates in 
measures against human trafficking. 
3.52  This JHA opt-in applies to Scotland as part of the UK. The UK Government currently 
exercises its power to opt in to JHA measures taking account of the interests of the whole 
of the UK, including Scotland. The Scottish Government is consulted on all decisions on 
whether to take part in JHA measures. It is questionable whether an independent Scottish 
state would be able to negotiate such favourable provisions on its own behalf as part of its 
EU accession process: this would be unprecedented, as no other new Member State has 
done so. 
3.53  The Scottish Government has stated that it would want to negotiate a similar opt-in to that 
currently enjoyed by the UK.18 If an independent Scottish state was unable to negotiate 
similar provisions, it would be likely to have to adopt the JHA acquis in its entirety. It would 
16  Bulgaria, Croatia, Cyprus and Romania. 
17  Scotland’s Future: Your guide to an independent Scotland, Scottish Government, November 2013 
18  Scotland’s Future: Your guide to an independent Scotland, Scottish Government, November 2013 

72  Scotland analysis: EU and international issues 
also automatical y be bound by new measures in the JHA field, with implications for an 
independent Scottish state’s legal system. 
3.54  Under the terms of the Lisbon Treaty, the UK Government is required to decide by 2014 
whether to opt out of, or remain bound by, all EU police and criminal justice measures 
adopted prior to the entry into force of the Lisbon Treaty. These measures will become 
subject to the full jurisdiction of the Court of Justice of the European Union and the 
enforcement powers of the European Commission on 1 December 2014, and this will 
apply to the UK unless it opts out of them al . 
3.55  In total, there are more than 130 measures within the scope of this decision. These 
measures include the European Arrest Warrant, UK participation in the police and judicial 
cooperation elements of the Schengen Convention, Europol, Eurojust, the Second 
Generation Schengen Information System (SIS II), ECRIS (electronic exchange of criminal 
records) and the Prisoner Transfer Framework Decision, a measure enabling EU prisoners 
to be transferred back to their home country. 
3.56  On 9 July 2013 the Home Secretary announced to the UK Parliament that the UK 
Government intended to exercise the opt-out. Fol owing votes in both Houses of 
Parliament, the Prime Minister wrote to the President of the Council of Ministers on 
24 July to provide formal notification that the UK Government has decided to opt out 
of all pre-Lisbon police and criminal justice measures. The opt-out is effective from 
1 December 2014. 
3.57  On 9 July the Home Secretary also announced a set of 35 measures that the UK will seek 
to rejoin. This set of measures includes all those necessary to combat cross-border crime 
and keep the UK safe. The UK Government has begun discussions with the European 
Commission and other Member States to seek to rejoin these measures. The UK 
Government’s decisions on this matter will apply to Scotland. 
3.58  However, in the event of a vote for independence, if Scotland were to become 
independent in 2016 as proposed, it could be required to readopt the entire JHA acquis
including the measures that the UK Government had opted out of two years previously. 
This would require major changes to its legal system unless the government of an 
independent Scottish state was able to negotiate any exemptions or secure an opt-out. 
Other legal implications of independence – charging foreign students 
3.59  As part of the UK, the Scottish Government’s policy has been to provide Scottish students 
who are resident in and study in Scotland with free higher education for their first degree. 
As a result of Scotland’s obligations under Article 18 of the TFEU, funding provided must 
not discriminate against EU nationals from other Member States on grounds of nationality. 
This has the practical effect that students from other Member States also have their fees 
paid from Scottish public funds. However, for students from the rest of the UK the position 
is somewhat different. The UK as a whole is an EU Member State; the four constituent 
nations are not Member States in their own right. So the current Scottish legislation 
means that the Scottish Government is able to charge students from England, Wales and 
Northern Ireland tuition fees precisely because this is an intra-UK matter and EU law does 
not apply. 
3.60  The Scottish Government has said that it would seek to continue these arrangements 
under independence. However, to charge students from the continuing UK tuition fees on 
independence while not charging Scottish or EU students would be clearly contrary to EU 
law as it discriminates against them on grounds of nationality. Should the government of 
an independent Scottish state pursue this policy, it is likely that it would face chal enges 

Chapter 3: The European Union  73 
on grounds that it is contrary to EU law. Contrary to claims made by the Scottish 
Government, it is likely that the existing policy on tuition fees would have to be overturned 
either to impose tuition fees for Scottish and EU students or to remove the fee system 
for students from other parts of the UK. This would have a substantial impact on funding 
streams for Scottish universities. 
3.61  More broadly, this approach fails to acknowledge the reality that, in the event of 
independence, Scotland and the continuing UK would be two separate states. An 
independent Scottish state would no longer be able to benefit from circumstances that 
apply because it is part of the UK. 
How influential would an independent Scottish state be? 
3.62  In both the Council of the EU and the European Parliament, Member States’ population 
is a critical factor in determining their voting weight and representation, although they 
are not directly proportional to population size. This has meant that smal er Member 
States have tended to have higher representation per capita than larger ones. But under 
new rules to come into force in 2014, when a Member State’s voting weight in Council 
will directly reflect its population size, the UK and other large Member States will have 
comparatively greater weight than they do now, with the current over-weighting of smal er 
Member States reduced. 
3.63  Smal er EU nations general y tend to look for consensus in EU negotiations and calibrate 
their positions based on where they see the likely areas of compromise between the larger 
Member States. This can be because they have limited institutional weight and capacity – 
or even inclination – to engage on more than a narrow range of priority negotiations at any 
one time. But most small EU countries are prepared to argue strongly for their position 
where they feel it is necessary. For some this is most effective when they are part of a 
larger coalition of Member States with the same interests; an example of this would be 
Slovakia’s work through the Friends of Cohesion group to secure a strong cohesion policy 
under the Multiannual Financial Framework (MFF). 
3.64  An independent Scottish state as a member of the EU would face similar chal enges. 
Currently, as part of the UK, Scotland has more votes, more leverage and more formal 
weight in Council, with a large and experienced Foreign Ministry in London, than it would 
as an independent Member State. As a new Member State, an independent Scottish 
state would need Permanent Representation in Brussels, which, despite the current small 
Scottish Government office in Brussels (whose staff are accredited as UK diplomats) to 
build from, is a significant investment in both staff and funding. 

74  Scotland analysis: EU and international issues 
Case study: Multilateral negotiations 
International negotiations, including those within the EU, can be lengthy and involve 
coordination across multiple UK departments in London and overseas. The negotiations 
around the EU’s MFF for the seven-year EU budget from 2014 to 2020 are an example of 
this. The European Commission released their first proposal for the MFF budget in June 
2011, which signalled the start of the formal negotiations, although informal y the negotiations 
had started earlier. (The UK’s Prime Minister, with other like-minded Heads of Government, 
wrote to European Commission President Barroso in December 2010 cal ing for a more 
restrained budget.) The negotiations concluded in the European Council in June 2013. 
The scale and complexity of the MFF negotiations meant that most UK government 
departments were involved in the negotiations. The MFF is underpinned by over 70 sectoral 
regulations which are led on by a number of departments. A cross-Whitehall programme 
board met between six and eight times a year to identify cross-cutting areas and ensure 
that their sectoral negotiations were consistent with the overall MFF negotiations. The UK 
Government regularly engaged with the Scottish Government (and that of Wales and the 
Northern Ireland Executive) both in Brussels and through the Joint Ministerial Committee in 
London. 
A systematic lobbying and engagement plan was overseen by the Cabinet Office, HM 
Treasury and the FCO. The MFF was raised with EU Member States at every viable 
opportunity by the Prime Minister, other Ministers and officials. The UK’s network of EU 
diplomatic missions regularly discussed the EU budget with other Member States and 
reported back to London on their positions. The UK Permanent Representative to the EU 
also has a team in Brussels working on the sectoral regulations and EU budget. 
The negotiations themselves reached their pinnacle at the European Council – the meeting of 
Heads of State and Government of the EU – in November 2012 and then again in February 
2013. The Prime Minister was accompanied by a number of senior government officials, who 
in turn were supported by two teams of EU budget experts in Brussels and London. The 
most fundamental parts of the MFF deal were agreed at these meetings. It was then formal y 
agreed by the European Parliament in November 2013. 

Chapter 3: The European Union  75 
European Investment Bank 
The European Investment Bank (EIB) is the EU’s long-term lending institution and lends to 
projects which further the EU’s policy goals. The UK is the joint largest shareholder (along 
with France, Germany and Italy). Although the EIB lends to projects outside the EU in 
support of the EU’s external policy objectives, around 90 per cent of EIB lending is to EU 
countries. As part of the UK, Scotland is eligible for this EU lending, and benefits significantly 
from it. Between 2008 and 2012 finance contracts worth €1.4 bil ion were signed in 
Scotland.* The EIB’s investments in Scotland have contributed to (but are not limited to) the 
financing of six onshore wind farms, the completion of the M80 motorway, the construction 
or refurbishment of over 40 schools, investment in social housing and the construction of 
new facilities at the University of Strathclyde.** 
Article 308 of the TFEU states that “the members of the European Investment Bank shall 
be the Member States” of the EU. Unless and until an independent Scottish state became 
a member of the EU it could not be a member of the EIB. By virtue of having to undergo 
an accession process in order to join the EU as a new Member State, for the period 
of application, an independent Scottish state might be ineligible for the lending the EIB 
undertakes inside the EU. An independent Scottish state could become eligible for the 
lending the EIB undertakes outside the EU; but this is by no means certain and would likely 
require the approval of the EIB’s Board of Governors. 
*  The European Investment Bank Statistical Report, EIB, 2012 
**  EIB statistical reports, available at www.eib.org/infocentre/publications/al /index.htm 
The EU budget 
3.65  A key financial issue for an independent Scottish state as part of the EU would be its 
contributions to and receipts from the EU budget. The UK Government’s first Scotland 
analysis paper, Devolution and the implications of Scottish independence, explained that 
an independent Scottish state would have to apply to join the EU, and the terms of its 
membership would be a matter of negotiation. It fol ows, as regards the EU budget, that 
an independent Scottish state would not inherit the rights of the UK, and its obligations 
would be the same as for any other new EU Member State. 
3.66  The Scottish Government’s position, that the UK rebate could be ‘shared’ on the basis 
of bilateral negotiations between the UK and an independent Scottish state without 
re-opening the 2014–20 EU budget, misunderstands the nature of the rebate.19 
3.67  The UK rebate is not a constant, annual lump sum amount that can be divided or shared. 
It is a function of the UK’s respective shares in the EU economy and receipts. Any 
change in the size of the UK economy and receipts (for example as a result of Scottish 
independence) would be automatical y reflected in the rebate calculation, with the new 
amount relating to the UK, excluding Scotland. There would be no ‘Scottish share’ of 
the UK rebate left. For it to be otherwise would require a change to the rules relating to 
budgetary corrections such as the UK rebate. This would need the unanimous agreement 
of all Member States. 
19  Scotland’s Future: Your guide to an independent Scotland, Scottish Government, November 2013 

76  Scotland analysis: EU and international issues 
3.68  Given the negotiating realities of the EU, it would be extremely difficult for an independent 
Scottish state to secure its own budgetary correction on accession (something no other 
Member State has ever done) and, if it did, this would necessarily be at the expense 
of securing particular treatment in other areas (membership of the euro, the Schengen 
borderless travel area, Common Agricultural Policy (CAP) receipts etc). Furthermore, it is 
inconceivable that an independent Scottish state would secure a correction as substantial 
as the UK rebate. Instead, as a new Member State to the EU, it would have to contribute 
to the UK rebate like other Member States. 
3.69  The accession date for an independent Scottish state is uncertain. So, to il ustrate the 
impact of independence on Scottish taxpayers’ contributions to, and receipts from, the 
EU budget, the impacts have been model ed over the course of the next MFF period, 
2014–20. 
3.70  HM Treasury analysis suggests that if Scotland was an independent state, Scottish 
taxpayers would contribute a total of €12.9 bil ion to the EU budget over the next MFF 
(€2.9 bil ion more than if Scotland remained part of the UK – €1,100 higher per household 
over 2014–20). With receipts likely to range between €4.8 bil ion and €7.0 bil ion (compared 
with €6.3 bil ion as part of the UK), an independent Scottish state’s net contribution would, 
therefore, be between €2.2 bil ion and €4.3 bil ion higher (between €840 and €1,650 per 
household) compared with its position over 2014–20 as part of the UK. Annex A of this 
paper considers EU budget issues in detail. 
The structure of the EU budget 
3.71  Each Member State contributes to the EU budget, and these resources are distributed 
across five main expenditure categories and across each Member State. Annual ceilings 
are agreed under the seven-year MFF which, in 2013, was negotiated for the period 
2014–20. 
3.72  On the expenditure side, the recent MFF deal means that more than two-thirds of EU 
funds are al ocated to Structural and Cohesion Funds (SCFs) and the CAP. 
3.73  The budget is funded primarily through ‘own resources’, which refers to revenue col ected 
from Member States. There are three types of own resources: the majority of import duties 
on goods brought into any given Member State from outside the European Customs 
Union (known as ‘traditional own resources’ or TOR); a value added tax (VAT) element; 
and residual funding (68 per cent of total EU revenue in 2011) calculated as a percentage 
of Gross National Income (GNI). 
Gross costs 
3.74   Given estimates of an independent Scottish state’s historical GNI, TOR and VAT-based 
contributions (based on published data), together with an estimate of its contribution 
to the UK rebate, it is possible to derive its historical financing share of the EU budget. 
This historic estimate can be applied to the payments ceiling for the 2014–20 MFF 
(€908.4 bil ion). 

Chapter 3: The European Union  77 
3.75  Without a budgetary correction, it is estimated that an independent Scottish state would 
contribute a total of around €12.9 bil ion per year to the EU budget over the next MFF. As 
part of the UK, over the same period, the gross contribution made by Scottish taxpayers 
would be €10.0 bil ion, with the driver of the difference being the loss of the benefit from 
the UK rebate under the assumption of an independent Scottish state. In short, the 
gross cost to Scottish taxpayers of contributions to the EU budget is around €2.9 bil ion 
(€1,100 per household), higher if there is an independent Scottish state than if Scotland 
continues to be part of the UK over 2014–20. 
Receipts from the EU budget – CAP 
3.76  CAP receipts are split into two separate funds. Pil ar 1 (subsidy) represents the bulk of CAP 
expenditure and is mainly in the form of direct payments to farmers. Pil ar 2, in contrast, 
is used to fund environmental and rural economic growth programmes. Pil ar 1 direct 
payments were initial y al ocated across the EU (and within the UK) based on previous 
levels of agricultural production. The more a Member State or region produced, the more 
funding it received. For the vast majority of such subsidies, there is no longer a direct 
link between what farmers produce and what they receive in subsidy, but areas with 
historical y higher agricultural production continue to receive relatively more subsidy. 
3.77  When direct payments were introduced, they were based on historical levels of production. 
In Scotland, payments are spread across a wide area of land, much of it low productivity, 
meaning that Scotland receives relatively low rates of direct payments on a per hectare 
basis. Within the UK, Scotland currently receives €130 per hectare (/ha) compared with 
the EU average of €268/ha. 
3.78  Comparing per hectare payments is, however, just one means of analysing how payment 
levels differ across the UK. Due to the relatively large average farm size in Scotland, 
Scottish subsidy receipts per farm compare favourably with the UK average. The average 
annual payment for farmers who are eligible in Scotland is £25,700 compared to £17,400 
in England, £16,200 in Wales and £7,300 in Northern Ireland (2011 figures). Scotland’s 
average annual payment per farmer is also among one of the highest average payments 
across the EU. 
3.79  In the short term, if an independent Scottish state did not become a Member State 
immediately after becoming independent of the UK, then CAP receipts would be 
interrupted. Any continuation of existing levels of support would require funding from a 
Scottish national budget (somewhere between €550 mil ion and €600 mil ion per annum – 
2011 prices). 
3.80  For its part, the Scottish Government has assumed that Scotland’s EU membership 
would continue seamlessly and asserts that Scottish farmers would have received an 
additional €1 bil ion in funding (over 2014–20) from Pil ar 1 if there were an independent 
Scottish state in the EU. This assertion is made on the basis that the European Council 
agreed in February 2013 that in respect of the 2014–20 MFF, all Member States are 
guaranteed a minimum of €196/ha20 by 2020. The Scottish Government claim is that if 
Scotland were already an independent state, and an established Member State in its own 
right, it would see a real terms uplift in direct payment receipts of approximately 30 per 
cent from 2013 to 2020, giving Pil ar 1 receipts over the next MFF of approximately €4.6 
bil ion (2011 prices). 
20  Current prices. 

78  Scotland analysis: EU and international issues 
3.81  What an independent Scottish state would receive in direct payments would depend on 
the terms of its accession, which would need to be negotiated with 28 Member States, 
all of which can be expected to approach an accession negotiation according to their 
national interest. So, it is difficult to see all 28 Member States agreeing to an independent 
Scotland receiving €196/ha by 2020. There are two main reasons for this: 
•  the impact on CAP receipts in other Member States; and 
•  the approach taken in the three most recent accessions. 
3.82  As a result of the recent EU budget deal, the CAP budget is fal ing 13 per cent in real 
terms in 2014–20, and it can be assumed that other Member States’ governments would 
be extremely reluctant to agree to the accession of an independent Scottish state on 
terms that would result in a further cut to their own CAP receipts for 2014–20. 
3.83  Recent experience helps to give perspective to this issue. In order to fund an uplift for the 
three Member States (Latvia, Lithuania and Estonia) that will receive €196/ha by the end 
of 2014–20, most other Member States will see a total reduction of €1.1 bil ion in Pil ar 
1 receipts. This is over and above the cuts arising from the fal ing CAP budget. There 
could be no realistic expectation that the seven-year budget deal for 2014–20 would 
be re-opened. This means that for an independent Scottish state to receive an extra 
€950 mil ion, the 28 other Member States would have to agree to additional cuts in their 
CAP receipts of around €950 mil ion during 2014–20. 
3.84  It is also worth noting that the norm for new entrants during the more recent accessions 
of 2004 and 2007 (and for Croatia in 2013) is for direct payments to be phased in over a 
ten-year period. Until the end of that ten-year period, new Member States only receive 
a growing proportion of their ‘full entitlement’ each year. It can be anticipated that 
there would be pressure from recent entrants or other Member States to ensure that 
subsequent new entrants are treated in a similar fashion. 
3.85  So there is the possibility that Scottish CAP receipts could be considerably lower than 
they currently are for a number of years. For example, for the period 2014–20 as part of 
the UK, the real value of direct payment receipts to Scotland under the current al ocation 
is €3.6 bil ion (2011 prices). Under a scenario where full ‘entitlement’ is phased in over ten 
years from 2014, the real value of Scottish direct payment receipts would be approximately 
€2.4 bil ion over 2014–20. This would be €1.2 bil ion less than Scottish farmers would 
receive as part of the UK, and €2.2 bil ion lower than a scenario where Scotland achieved 
€196/ha by 2020. 
3.86  In a similar fashion to the recently acceded Member States, if it is subject to a ten-year 
phase-in, it may be that an independent Scottish state is able to negotiate a provision that 
would al ow it to pay top-up payments to farmers from its own national budget to ensure 
that Scottish CAP recipients continue to receive support comparable to current levels 
(i.e. €130/ph). This would come at a significant cost to Scottish taxpayers (€1.2 bil ion 
spread over 2014–20) over and above the cost of their contributions to the EU budget. 
An independent Scottish Government would need to weigh the value for money of any 
such expenditure against other cal s on its budget such as health and education. 

Chapter 3: The European Union  79 
Other receipts from the EU budget 
Structural and Cohesion Funds receipts 
3.87  The Structural Funds al ocated to each Member State are determined through regional 
criteria based on socio-economic factors including relative GDP per capita, unemployment 
levels and population density. For the 2014–20 MFF, an independent Scottish state would 
get €567 mil ion, a reduction of 32 per cent compared with Scottish SCF al ocations for 
2007–13. However, as a part of the UK, Scotland will see its Structural Funds receipts 
topped up, so that the real reduction compared with the current period is limited to 5 per 
cent. Their resulting al ocation for 2014–20 will be €795 mil ion, representing an uplift of 
€228 mil ion compared with the situation if Scotland was an independent state. 
Total receipts 
3.88  Once receipts from other (smal er) parts of the EU budget are taken into account, an 
independent Scottish state’s total receipts for the next MFF would, depending on what 
happens to CAP receipts, be expected to be between around €4.8 bil ion and €7.0 bil ion. 
By contrast, the equivalent receipts for Scotland, should it remain part of the UK, are 
estimated to be €6.3 bil ion. 
Net contributions 
3.89  Even under the most optimistic receipts scenario from the perspective of an independent 
Scottish state, the total impact of different levels of receipts is dwarfed by the impact of 
losing the benefit arising from the UK rebate. 
3.90  As part of the UK, Scotland’s net contribution would be around €3.7 bil ion across 
2014–20. This is between around €2.2 and €4.3 bil ion less than its likely net contribution 
as an independent state over 2014–20. 
3.91  Charts 3.1 and 3.2 il ustrate how Scottish taxpayer costs, receipts and net contributions 
would be affected by independence compared with staying as part of the UK. Even under 
the most optimistic scenario, for every extra euro in CAP receipts for Scottish farmers, 
Scottish taxpayers would incur extra costs of over €3.00. 
Chart 3.1: Changes to Scottish contributions and receipts for 2014–20: independence 
compared with Scotland as part of the UK (best case scenario for CAP receipts in 
Table A.1) 
2000 
1000 
 millions) 


-1000 
-2000
om Status Quo (
-3000 
Deviation fr -4000 
-5000 
SCF Receipts  CAP Receipts 
Rebate 
Contribution to 
Net 
Benefit 
UK Rebate 
Position 

80  Scotland analysis: EU and international issues 
Chart 3.2: Changes to Scottish contributions and receipts for 2014–20: independence 
compared with Scotland as part of the UK (worst case scenario for CAP receipts in 
Table A.1) 
2000 
1000 
 millions) 


-1000 
-2000 
om Status Quo ( -3000 
-4000
Deviation fr
-5000 
SCF Receipts  CAP Receipts 
Rebate 
Contribution to 
Net 
Benefit 
UK Rebate 
Position 
Conclusion 
3.92  This chapter has il ustrated that an independent Scottish state’s negotiations to become a 
member of the EU may be lengthy and complex depending on the terms of membership 
that the government of an independent Scottish state may seek to secure. Much may 
depend on whether an independent Scottish state would be wil ing to make concessions 
which would al ow the negotiations to be completed within their already announced time­
scale, or whether the date of independence would be postponed to al ow time for further 
negotiation or, indeed, whether it would be wil ing to contemplate a period as a non-EU 
member with all the consequences that would entail. Other Member States, including 
those with domestic independence movements to consider, would need to reach a 
consensus on whether these arrangements should apply in an independent Scottish state. 
3.93  Currently, people in Scotland have the best of both worlds – Scottish Ministers feed into 
the UK’s EU negotiating position and attend EU Councils in which they have a particular 
interest; and the UK’s experience and weight in the EU consistently delivers for Scottish 
people and businesses in priority areas for Scotland. 
3.94  With no right to a share of the UK rebate from the EU, people in an independent Scottish 
state which eventual y becomes an EU Member State would have to pay much more to 
the EU than they do currently as part of the UK. 
3.95  The analysis presented within this paper suggests that, in the context of the EU budget, 
even under the best possible receipts scenario, Scotland would be significantly worse off 
as an independent state compared with the status quo. The situation in respect of receipts 
would be very uncertain. Taking the example of 2014–20, an independent Scottish state’s 
net position would be between around €2.2 bil ion and €4.3 bil ion weaker (between €840 
and €1,650 per household) than as part of the UK. 


Annex A: 
An independent Scottish state and 
the EU budget 
A.1   A key financial issue for an independent Scottish state as part of the EU would be its 
contributions to and receipts from the EU budget. The UK Government’s first Scotland 
analysis paper, Devolution and the implications of Scottish independence, explained that 
an independent Scottish state would have to apply to the EU as any other new applicant 
state, and the terms of its membership would be a matter for negotiation. It fol ows, as 
regards the EU budget, that an independent Scottish state would not inherit the rights of 
the UK, and its obligations would be the same as for any other new EU Member State. 
A.2   The Scottish Government’s position, that the UK rebate could be ‘shared’ on the basis 
of bilateral negotiations between the UK and an independent Scottish state without re­
opening the 2014–20 EU budget, misunderstands the nature of the rebate.1 
A.3   The UK rebate is not a constant, annual lump sum amount that can be divided or shared. 
It is a function of the UK’s respective shares in the EU economy and receipts. Any 
change in the size of the UK economy and receipts (for example as a result of Scottish 
independence) would be automatical y reflected in the rebate calculation, with the new 
amount relating to the UK excluding Scotland. There would be no ‘Scottish share’ of 
the UK rebate left. For it to be otherwise would require a change to the rules relating to 
budgetary corrections such as the UK rebate. This would need the unanimous agreement 
of all EU Member States. 
A.4   Given the negotiating realities of the EU, it would be extremely difficult for an independent 
Scottish state to secure its own budgetary correction on accession (something no other 
Member State has ever done) and, if it did, this would necessarily be at the expense 
of securing particular treatment in other areas (membership of the euro, the Schengen 
borderless travel area, Common Agricultural Policy (CAP) receipts etc). Furthermore, it is 
inconceivable that an independent Scottish state would secure a correction as substantial 
as the UK rebate. Instead, it would have to contribute to the UK rebate like other 
Member States. 
1  Scotland’s Future: Your guide to an independent Scotland, Scottish Government, November 2013 

84  Scotland analysis: EU and international issues 
A.5   The accession date for an independent Scottish state is uncertain. So, to il ustrate 
the effect of independence from an EU budget perspective, the impacts have been 
analysed over the course of the next Multiannual Financial Framework (MFF) period, 
2014–20. Relative prosperity, and Gross National Income (GNI) in particular, is a key 
driver of contributions to the EU budget. If Scotland’s share of North Sea oil revenue 
is determined on a geographical basis,2 and assuming that an independent Scottish 
state was a member of the EU from 2014, the analysis described in this paper gives the 
fol owing results. 
•   The rebate: Without a budgetary correction, it is estimated that an independent 
Scottish state would contribute a total of around €12.9 bil ion to the EU budget over 
2014–20. As part of the UK, over the same period, the contribution made by Scottish 
taxpayers would be around €10.0 bil ion. The difference is the loss of the benefit from 
the UK rebate (€2.3 bil ion), the rest (about €640 mil ion) arising from the Scottish 
contribution to the UK rebate, giving a total additional direct cost to Scottish taxpayers 
of around €2.9 bil ion (€1,100 per household). 
•   Uncertainties around the CAP: An independent Scottish state’s receipts from the EU 
budget are uncertain and would depend on the terms of accession, which would have 
to be agreed by all 28 Member States. In particular, it is unclear whether CAP receipts 
would transit from current levels to €196 per hectare by 2020, or whether, in common 
with all 13 Member States that have joined the EU since 2004, full treatment in respect 
of CAP receipts would be phased in over ten years. This analysis therefore presents 
CAP receipts, total receipts and net contributions for an independent Scottish state as 
a range of numbers, reflecting both of these scenarios, and all possibilities in between, 
which might potential y be negotiated. 
•   Structural Fund and CAP receipts: Fol owing recent decisions by the UK 
Government on intra-UK al ocations of EU budget receipts for 2014–20, Scotland 
would receive €228 mil ion less in Structural Funds if it were an independent state. 
Fol owing the decision to al ocate Scotland €3.6 bil ion in CAP Pil ar 1 receipts for 
2014–20, an independent Scottish state’s CAP Pil ar 1 receipts could range from 
around €1.2 bil ion less to around €950 mil ion higher over 2014–20. 
•   Net contributions: However, the total impact of different levels of receipts is dwarfed 
by the impact of losing the benefit of the UK rebate. In short, even under the most 
optimistic scenario for CAP receipts, an independent Scottish state’s net contribution 
would be around €2.2 bil ion (€840 per household) worse than it would be if Scotland 
were to remain part of the UK. Under this scenario, for every extra euro in CAP 
receipts for Scottish farmers, taxpayers would incur extra costs of over €3.00. Under 
less optimistic scenarios, an independent Scottish state could see its CAP (and total) 
receipts fall substantial y, with the deterioration in net contributions over 2014–20 
rising to as much as €4.3 bil ion (€1,650 per household) compared with the situation if 
Scotland were to remain part of the UK. 
2  A geographical share of North Sea oil and gas is used in this analysis for il ustrative purposes; in the event of 
independence, it would be subject to negotiations with the continuing UK. 

Annex A: An independent Scottish state and  the EU budget  85 
Structure and scope 
A.6   This annex is divided into two parts. The first reviews the two analyses published by the 
Scottish Government on the issue of Scotland’s estimated net contributions to the EU. 
The second section provides HM Treasury analysis of the likely gross contributions of an 
independent Scottish state over the 2014–20 MFF. It also examines the likely policy context 
for the CAP and the Structural and Cohesion Funds (SCFs) for an independent Scottish 
state, and reports estimates of receipts and net contributions. These estimates are then 
compared with receipts and estimates of net contributions for Scotland if it remains part 
of the UK. 
A.7   The analysis in this paper assumes that Scotland gains independence and joins the 
EU in 2014. Clearly, given the timing of the referendum, there is no expectation that an 
independent Scottish state could join the EU from the start of 2014. Equal y, any timetable 
for accession would be highly uncertain, depending in part on the negotiating stance 
adopted by the 28 existing Member States. So any date assumed for the start of EU 
membership for an independent Scottish state would be open to chal enge. 
A.8   Given that an EU budget framework for 2014–20 has just been agreed in Europe, and 
decisions for intra-UK al ocations of Structural Fund and CAP receipts have recently been 
announced for the same period by the UK Government, the rest of this paper considers 
three scenarios (two relating to independence, and one in respect of the status quo) for 
the period 2014–20, with a view to il ustrating the range of possible outcomes over a full 
MFF period. 
Scottish Government estimates of EU budget contribution 
A.9   In 2009 the Scottish Government published its own analysis of its 2007 net contribution to 
the EU budget.3 This analysis al ocates Scotland its population benefit from the UK rebate. 
A.10  The key result of the Scottish Government’s 2009 analysis is that in 2007, an independent 
Scottish state would have been a net contributor to the EU budget, with its net contribution 
ranging from €287 mil ion to €512 mil ion depending on differing assumptions on North 
Sea oil and gas revenues4 (even while benefiting from the UK rebate). This implies that 
without a benefit from the UK rebate, an independent Scottish state would, in 2007, have 
faced a much larger net contribution of between around €766 mil ion and €991 mil ion, 
pushing Scotland’s net contribution above those of the Member States with comparable 
populations and prosperity (as measured by Gross Domestic Product (GDP) per capita). 
A.11  As part of its 2011–12 Government Expenditure & Revenue Scotland publication,5 
the Scottish Government looked at the question of an independent Scottish state’s 
contributions to the EU budget. Unlike its previous work, which reported results in euros 
and in calendar years, this analysis reports estimates in sterling and in fiscal years. The 
analysis makes identical assumptions to its 2009 analysis when deriving estimates of 
gross contributions, including that Scotland would have benefited from the UK rebate 
in proportion to its population. Focusing on the most recent fiscal year in the report, the 
study finds an independent Scottish state’s annual net contribution to be in the range of 
£209 mil ion to £402 mil ion, again depending on the division of North Sea oil revenue. 
3   Estimating Scotland’s Contribution to the EU budget, Scottish Government, September 2009, 
www.scotland.gov.uk/Publications/2009/09/17135447/10 
4   Ibid. In addition, the division of North Sea oil revenues will affect Scotland’s GNI, which would affect its 
contribution to the EU. 
5   Government Expenditure & Revenue Scotland 2011–2012, Scottish Government, March 2013, 
www.scotland.gov.uk/Topics/Statistics/Browse/Economy/GERS 

86  Scotland analysis: EU and international issues 
The Scottish Government’s estimate of average net contributions across the 2007/08 to 
2011/12 period lies within the range of £182 mil ion to £354 mil ion per year. 
A.12  However, as the UK Government’s first Scotland analysis paper, Devolution and the 
implications of Scottish independence6 explains, an independent Scottish state would 
have to negotiate the terms of its membership of the EU afresh. Given the negotiating 
realities of the EU, it would be extremely difficult for an independent Scottish state to 
negotiate its own budgetary correction on accession and, if it did, this would necessarily 
be at the expense of securing particular treatment in other areas (the euro, Schengen, 
CAP receipts etc). 
A.13  It is inconceivable that an independent Scottish state would secure a correction as 
substantial as the UK rebate. Instead, as a new Member State of the EU, it would have to 
contribute to the UK rebate like other Member States. 
A.14  The rest of this paper uses a number of scenarios, based on the most reasonable 
assumptions about key variables, to analyse how an independent Scottish state would 
fare in respect of contributions to, and receipts from, the EU budget during 2014–20, 
compared with its position as part of the UK. 
6   Scotland analysis: Devolution and the implications of Scottish independence, HM Government, February 
2013, www.gov.uk/government/publications/scotland-analysis-devolution-and-the-implications-of-scottish­
independence 


Annex A: An independent Scottish state and  the EU budget  87 
HM Government estimates of an independent Scottish state’s gross 
contributions to the EU budget7 
The EU budget 
Each EU Member State contributes to the EU budget, and those resources are distributed 
across five main expenditure categories and across each Member State. Annual ceilings 
are agreed under a seven-year financial framework known as the Multiannual Financial 
Framework (MFF), which, in 2013, was agreed for the period 2014–20.* On the expenditure 
side, the recent MFF deal means that more than two-thirds of EU funds are al ocated to 
SCFs and the CAP. 
The budget is funded primarily through ‘own resources’, which refers to revenue col ected 
from Member States. 
There are three types of own resources: 
–   Traditional Own Resources (TOR), which are mainly import duties on goods brought 
into any given Member State from outside the European Customs Union. Member 
States retain 25 per cent of import duties col ected in order to cover col ection costs, 
and pass 75 per cent on to the European Commission;** 
–   Value Added Tax (VAT)-based resource, calculated by applying a set call rate to a 
hypothetical harmonised VAT base; and 
–   Gross National Income (GNI)-based resource, which reflects the residual EU budget 
expenditure to be financed once TOR and the VAT-based resource contributions are 
taken into account. The Commission estimates residual financing needs of the budget 
as the percentage of EU GNI, which is then applied uniformly to individual Member 
States’ GNI. The GNI-based resource currently accounts for the largest share of own 
resources (68 per cent of total EU revenue in 2011). 
*  These ceilings were agreed at the European Council in 2013, and are part of an MFF regulation given 
consent by the European Parliament on 19 November 2013. 
**  The 25 per cent retained to cover col ection costs is applicable under the current Own Resources Decision 
(i.e. the 2007 Own Resources Decision) relating to the 2007–13 financial framework. Under the MFF deal 
achieved at the February 2013 European Council, this has been revised downwards to 20 per cent, but will 
need to be agreed by Member States under a new Own Resources Decision. 
7  Henceforth, all figures are in constant (2011) prices except where indicated. 

88  Scotland analysis: EU and international issues 
The EU budget (continued) 
The EU budget is distributed across five categories, referred to as ‘headings’, where each is 
targeted at a particular policy area: 
Heading 1: Sustainable Growth 
–  Heading 1a: Competitiveness for Growth and Employment 
–  Heading 1b: Structural and Cohesion Funds (SCFs) 
Heading 2: Preservation and Management of Natural Resources, almost all of which goes to 
the Common Agricultural Policy (CAP) 
–  CAP Pil ar 1: Market-Related Expenditure and Direct Aid 
–  CAP Pil ar 2: Rural Development 
–  Fisheries, LIFE+ etc. 
Heading 3: Citizenship, Freedom, Security and Justice 
Heading 4: EU as a Global Player 
Heading 5: Administration 
Gross contributions 
A.15  On the revenue side of the budget, an examination of the impact of the recent MFF 
deal on any given Member State would typical y require forecasts of GNI, a hypothetical 
harmonised VAT base and customs duties, all of which affect Member State contributions 
(see box). For Scotland, forecasts of these variables are not available. 
A.16  In the absence of such forecasts for Scotland, this analysis utilises historical data8 to 
estimate Scotland’s overall financing share of EU expenditure across 2011–12, and applies 
this to the payments ceiling agreed for the 2014–20 MFF to derive an independent Scottish 
state’s likely gross contributions to the 2014–20 MFF. 
A.17  As already noted, an independent Scottish state would have to negotiate the terms of its 
membership of the EU afresh. An independent Scottish state could ask for a budgetary 
correction during its accession negotiations, but this would require the unanimous 
approval of all Member States. 
A.18  To complete the picture, an estimate of the contributions that an independent Scottish 
state would (like other Member States) have made to the UK rebate across 2011–12 is 
also required. This is determined by its share in total EU GNI. On this basis, Scotland’s 
8   The UK fiscal framework does not provide a breakdown of the UK’s gross contribution to the EU budget at the 
devolved level. An estimate of Scotland’s historical GNI-based contribution requires an estimate of Scotland’s 
GNI. For the purposes of the present analysis, this is done by taking the ratio of Scottish GDP to UK GDP and 
applying it to the 2011–12 outturn data on the UK’s GNI contribution. The Scottish Government provides two 
different measures of GDP, reflecting different assumptions on the division of North Sea oil revenues: 
(i) one based on the population share of North Sea revenues; and (i ) another based on the geographical 
share of North Sea oil and gas revenues. Scotland’s historical VAT-based contribution is estimated on the 
basis of its share of UK household VAT expenditure from the 2010 Expenditure and Food Survey (8.8 per 
cent) and applying it to the 2011–12 outturn data on the UK’s VAT-based contributions. Final y, Scotland’s 
historical TOR contribution is estimated by calculating its share in UK total imports (4.4 per cent), derived from 
the 2005 Scottish Government and Office for National Statistics input-output tables, and applying it to the 
2011–12 outturn data on UK TOR contributions. In all three cases, outturn data is drawn from the European 
Commission’s Financial Reports. 

Annex A: An independent Scottish state and  the EU budget  89 
contribution to the UK rebate would add as much as €640 mil ion (€250 per household) to 
Scotland’s contributions to the 2014–20 MFF. 
A.19  Given estimates of an independent Scottish state’s historical GNI, TOR and VAT-based 
contributions, together with an estimate of its contribution to the UK rebate, it is possible to 
derive its historical financing share of the EU budget. Applying this financing share estimate 
to the payments ceiling for the 2014–20 MFF (€908.4 bil ion), Scotland’s annual gross 
contribution to the next MFF is estimated to be €1.8 bil ion (around €730 per household9), 
assuming that North Sea oil and gas revenues are split between Scotland and the UK on 
a geographical basis (which gives Scotland a higher share of the revenues compared with 
a population basis). 
A.20  If Scotland remains part of the UK, its taxpayers would continue to benefit from the rebate 
(by around €320 mil ion per year) and would not have to contribute to it.10 As a result, 
Scottish taxpayers’ gross contributions would be lower, at around €1.4 bil ion per year, 
implying a benefit worth over €400 mil ion per year to Scottish taxpayers over 2014–2011 
compared with an independence scenario. 
A.21  In short, the gross cost to Scottish taxpayers of contributions to the EU budget is around 
€2.9 bil ion less as part of the UK over 2014–20 than is likely if there was an independent 
Scottish state. 
An independent Scottish state’s receipts from the EU budget 
Common Agricultural Policy receipts 
A.22  CAP receipts are split into two separate funds. Pil ar 1 (subsidy) represents the bulk of CAP 
expenditure and is mainly in the form of direct payments to farmers. Pil ar 2 in contrast 
is used to fund environmental and rural economic growth programmes. Pil ar 1 direct 
payments were initial y al ocated across the EU (and within the UK) based on previous 
levels of agricultural production. The more a Member State or region produced, the more 
funding it received. For the vast majority of such subsidies, there is no longer a direct 
link between what farmers produce and what they receive in subsidy, but areas with 
historical y higher agricultural production continue to receive relatively more subsidy. 
Summary of current position 
A.23 When direct payments were introduced, they were based on historical levels of production. 
In Scotland, payments are spread across a wide area of land, much of it low productivity, 
meaning that Scotland receives relatively low rates of direct payments on a per-hectare 
basis. Within the UK, Scotland currently receives €130 per hectare (/ha) compared with 
the EU average of €268/ha. 
9   This has been estimated by multiplying the estimate for gross contributions per capita by the projection for 
average household size. The gross contribution per capita projection is based on projections of Scotland’s 
population across 2014–20. The average household size projections are taken from the National Records of 
Scotland (NRS) database; these projections are for five-year intervals, so the average of 2015 and 2020 is used 
to reflect the typical household size across the 2014–20 MFF. 
10   The approach to estimating Scotland’s gross contributions as part of the UK is similar to the approach used 
when estimating gross contributions for an independent Scottish state. The key difference is the treatment of 
the UK rebate in the calculation. When estimating Scotland’s historical financing share as part of the UK, it is 
al ocated its population share of the UK rebate. 
11   Since the Scottish Government does not contribute to the EU, but Scottish taxpayers do indirectly via the UK 
tax system, it could be argued that Scotland’s historical GNI contribution should be estimated on the basis 
of its share in UK total tax receipts. These are found to be very similar to Scotland’s share in UK GDP, and 
therefore would have a minor impact on these estimates (the impact of such an approach on Scotland’s gross 
contributions would be a total of between €100 mil ion and €200 mil ion over 2014–20). 

90  Scotland analysis: EU and international issues 
A.24  The UK Government argued in the recent round of negotiations, at the request of the 
current Scottish Government, for flexibility to exclude land that is not actively farmed 
from receipts of direct payments. This would increase, to some extent, the per-hectare 
payments al ocated to land that is under active production. 
A.25  Comparing per-hectare payments is, however, just one means of analysing how payment 
levels differ across the UK. Due to the relatively large average farm size in Scotland, 
Scottish receipts per farm compare favourably with the UK average. The average annual 
payment for farmers who are eligible in Scotland is £25,700, compared with £17,400 
in England, £16,200 in Wales and £7,300 in Northern Ireland (2011 figures). Scotland’s 
average annual payment per farmer (just over €30,000, assuming £1=€1.18) is also among 
one of the highest average payments across the EU (see Chart A.1). 
Chart A.1: Average direct payments per beneficiary (right-hand side) and per hectare 
(left-hand side) 
€/ha  
€/beneficiary 
800 
45,000 
700
40,000
 
 
35,000
600
 
 
30,000 
600 
25,000 
400 
20,000 
300 
15,000 
200 
10,000 
100 
5,000 







 
AT
BE
IE
IT
BG
CY
CZ
DK
EE
FI
FR
DE
EL
HU
LV
LT
LU
MT
NL
PL
PT
RO
SK
SI
ES
SE
UK
EU-27
EU-15
EU-12
EUR/ha 
EUR/beneficiary 
Source: Directorate-General for Agriculture and Rural Development12 
Implications of independence 
A.26  The amount that an independent Scottish state would receive in direct payments 
would depend on the terms of its accession, which would need to be negotiated with 
28 Member States. Irrespective of any goodwill towards a prospective new Member 
State, other EU Member States can be expected to approach an accession negotiation 
according to their national interest. 
A.27  In the short term, if an independent Scottish state did not become a Member State 
immediately after becoming independent of the UK, then CAP receipts would be 
interrupted. Any continuation of existing levels of support to farmers would require funding 
from a Scottish national budget (somewhere between €550 mil ion and €600 mil ion per 
year (2011 prices), depending on the year in question). 
12   The Future of CAP Direct Payments, Agricultural Policy Perspective Brief No. 2, European Commission, 
January 2011, http://ec.europa.eu/agriculture/policy-perspectives/policy-briefs/02_en.pdf 

Annex A: An independent Scottish state and  the EU budget  91 
A.28  For its part, the Scottish Government has assumed that Scotland’s EU membership 
would continue seamlessly and has asserted that Scottish farmers would have received 
an additional €1 bil ion in funding from Pil ar 1 if there was already an independent 
Scottish state.13 This assertion is made on the basis of the 2014–20 MFF agreement, 
that all Member States are guaranteed a minimum of €196/ha14 by 2020. The Scottish 
Government claim is that if Scotland was already an independent state, and an 
established Member State in its own right, it would see a real terms uplift in direct payment 
receipts of approximately 30 per cent from 2013 to 2020, giving Pil ar 1 receipts over the 
next MFF of approximately €4.6 bil ion (2011 prices). 
A.29  However, it is difficult to see all 28 Member States agreeing to this sort of approach. There 
are two main reasons for this: 
•   the negative impact on CAP receipts in other Member States; and 
•   the approach taken in the three most recent accessions, requiring that CAP receipts 
are phased in over ten years in new Member States. 
A.30 As a result of the recent EU budget deal, the CAP budget is fal ing by 13 per cent in real 
terms in 2014–20, and it can be assumed that other Member States’ governments would 
be extremely reluctant to agree to the accession of an independent Scottish state on 
terms that would result in a further cut to their own CAP receipts for 2014–20. 
A.31  Recent experience helps to give perspective to this issue. During the most recent CAP 
reform negotiations when the European Commission proposed relatively modest 
inter-Member State real ocations of CAP receipts phased in over 2014–20, this proved to 
be very controversial, especial y among those Member States that would lose receipts 
to fund the transfer. 
A.32  In the end, in order to fund the uplift for the three Member States (Latvia, Lithuania and 
Estonia) that will receive €196/ha by the end of 2020, most other Member States will see a 
total reduction of €1.1 bil ion in Pil ar 1 receipts. This is over and above the cuts arising from 
the fal ing CAP budget. If an independent Scottish state were to seek accession on the 
basis that its CAP receipts start at levels similar to current Scottish CAP receipts as part of 
the UK, and then move to €196/ha, there could be no realistic expectation that the seven­
year budget deal for 2014–20 would be re-opened. This means that the 28 other Member 
States would have to agree to cuts in their CAP receipts of around €950 mil ion during 
2014–20. Given the experience of the recent EU budget and CAP reform negotiations, this 
would be a very complex and controversial deal to negotiate. 
A.33 It is also worth noting that the norm for new entrants during the more recent accessions 
of 200415 and 200716 (and for Croatia in 2013) is for direct payments to be phased in over 
a ten-year period. Until the end of that ten-year period, new Member States only receive 
a growing proportion of their ‘full entitlement’ each year.17 
13   Scotland’s future: Your guide to an independent Scotland, Scottish Government, November 2013 
14   Current prices. 
15   Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. 
16   Bulgaria and Romania. 
17   Ten-year phase-ins agreed for Member States acceding in 2004, 2007 and 2013 have seen a growth in the 
share of ‘full entitlements’ to direct payments in line with the percentages set out below: 
Year 









10 

25 
30 
35 
40 
50 
60 
70 
80 
90 
100 

92  Scotland analysis: EU and international issues 
A.34  It can be anticipated that there would be pressure from recent entrants or other Member 
States to ensure that subsequent new entrants are treated in a similar fashion. 
A.35  So there is the possibility that Scottish CAP receipts could be considerably lower than 
they currently are for a number of years. For example, for the period 2014–20, as part of 
the UK, the real value of direct payment receipts to Scotland under the current al ocation 
is €3.6 bil ion (2011 prices). Under a scenario where ‘full entitlement’ is phased in over ten 
years from 2014, the real value of Scottish direct payment receipts would be approximately 
€2.4 bil ion over 2014–20. This would be €1.2 bil ion less than Scottish farmers will receive 
as part of the UK, and €2.2 bil ion less than a scenario where Scotland achieved €196/ha 
by 2020. 
A.36  In a similar fashion to the recently acceded Member States, if it is subject to a ten-year 
phase-in, it may be that an independent Scottish state is able to negotiate a provision 
that would al ow it to pay top-up payments to farmers from its own national budget to 
ensure that Scottish CAP recipients continue to receive support comparable with current 
levels (i.e. €130/ha). This would help to prevent any drastic fall in payments in the early 
years of accession, but would come at a significant cost to Scottish taxpayers (€1.2 bil ion 
spread over 2014–20) over and above the cost of their contributions to the EU budget. 
An independent Scottish Government would need to weigh the value for money of any 
such expenditure against other cal s on its budget such as health and education. 
A.37  How Scotland would be treated in terms of its CAP receipts is highly uncertain and would 
be a matter for negotiation between Scotland and the 28 other EU Member States, 
including the 13 new EU Member States that have either recently concluded or are still 
undergoing phased-in treatment under the CAP. 
Analysis 
A.38  For the purposes of analysing an independent Scottish state’s EU budget receipts and 
net contributions over 2014–20 (results presented in Tables A.1 and A.2) we present 
two scenarios, which map out the range of possible outcomes. The first is the Scottish 
Government’s earlier argument that under independence it would converge towards 
€196/ha by 2020, delivering a direct payment budget of €4.6 bil ion (2011 prices). The 
second is to assume that an independent Scottish state would see its ‘full entitlement’ to 
direct payments gradual y phased in over a ten-year period (starting in 2014) in a similar 
fashion to the newer Member States. For 2014–20 this would deliver a direct payment 
budget from the CAP of €2.4 bil ion (2011 prices). These figures are compared with the 
direct payment budget of €3.6 bil ion that Scotland would receive over 2014–20 as part 
of the UK. 
Structural and Cohesion Fund receipts 
A.39  The SCF funding al ocated to each Member State is determined through regional criteria 
based on socio-economic factors including relative GDP per capita, unemployment levels 
and population density, which are summed to give a Member State an al ocation for the 
period. Similar to CAP receipts, Scotland’s Structural Fund receipts supplement Scottish 
Government expenditure without the Scottish Government having to make a contribution 
to the EU budget. 

Annex A: An independent Scottish state and  the EU budget  93 
A.40  Member States have some degree of flexibility in how they al ocate these funds internal y. 
This al ows Member States to direct the funds to where they will be best used in line with 
national priorities. In both the 2007–13 and the 2014–20 financial frameworks, Scotland 
benefited directly from this provision: 
•   The UK’s Structural Fund al ocations for 2007–13 are €10.8 bil ion, and Scotland was 
al ocated around 8 per cent, or €840 mil ion, of this. Scotland would have received 
lower Structural Fund receipts had the UK strictly fol owed the EU-level formula. 
•   For the 2014–20 MFF, an independent Scottish state would get €567 mil ion, a 
reduction of 32 per cent compared with Scottish Structural Fund receipts in 2007–13. 
However, because of the decision taken by the UK Government18 to ensure that 
England, Scotland, Wales and Northern Ireland all see equal cuts to their respective 
Structural Fund receipts in 2014–20 compared with 2007–13, as a part of the UK 
Scotland will see its Structural Funds receipts fall by only 5 per cent. Its resulting 
al ocation for 2014–20 will be €795 mil ion, representing an uplift of €228 mil ion 
compared with the situation if it were an independent state. 
A.41  The uncertainty surrounding Scotland’s EU membership could have significant 
implications for Structural Fund receipts. In the short term, if an independent Scottish 
state were not immediately to become a Member State, then its Structural Fund receipts 
would likely be interrupted. In the medium term, an independent Scottish state would 
not be able to benefit from internal UK real ocations of funds at the start of each new 
financial perspective. 
Receipts under other headings 
A.42  In addition to receipts from SCFs and CAP, estimates are also made for receipts under 
Headings 1a (Competitiveness for Growth and Employment), Heading 3 (Citizenship, 
Freedom, Security and Justice) and Heading 5 (Administration)19 of the EU budget. 
Expenditure under these other headings is al ocated on a different basis compared with 
the CAP and SCFs, with a substantial amount al ocated to individual projects after a 
competitive bidding process. To estimate these receipts, the approach used in this annex 
is to draw on historical shares. In line with the Scottish Government’s analysis, this analysis 
al ocates an independent Scottish state’s population share of UK receipts across the 
period 2011–12 under these headings. These shares are then applied to the total agreed 
ceilings for these headings over the 2014–20 period in order to generate an estimate 
of approximately €200 mil ion per year in receipts under Headings 1a, 3 and 5 over 
2014–20.20 
18   The final Structural Fund al ocations are subject to European Commission agreement. It should be noted 
that the al ocations are also subject to an ongoing judicial review sought by the Liverpool and Sheffield City 
Regions. 
19   Heading 4 (EU as a Global Player) is unal ocated expenditure, i.e. it is not al ocated across Member States. 
20   These receipt figures are all based on ‘commitments’. In fact, because programmes under Headings 1 
and 3 and Pil ar 2 of the CAP do not spend all funds in the same year they are committed, ‘payments’ (the 
money drawn down from the EU budget) are general y lower than commitments. For the sake of simplicity, 
in generating estimates of net contributions, no difference is assumed between commitments and payments 
when estimating Scottish receipts. This will tend to slightly overstate receipts and slightly underestimate 
Scottish net contributions in 2014–20 (in both scenarios presented). 

94  Scotland analysis: EU and international issues 
Total receipts 
A.43  An independent Scottish state’s total annual receipts for the next MFF would be expected 
to be between around €690 mil ion per year (with a ten-year phase-in for CAP receipts) 
and €1.0 bil ion per year (if Scotland transits from €130/ha to €196/ha by 2020). By 
contrast, the equivalent receipts for Scotland should it remain part of the UK are estimated 
to be around €900 mil ion per year.21 
An independent Scottish state’s net contribution to the EU budget 
A.44  GNI levels are a key driver of gross and net contributions to the EU budget. Table A.1 
shows gross and net contribution estimates if Scotland’s share of North Sea oil revenue 
was to be determined on a geographical basis. It is estimated that an independent 
Scottish state’s net contribution to the EU budget would average between around 
€840 mil ion and €1.15 bil ion per year over the 2014–20 period. This corresponds to 
between around 0.40 per cent and 0.54 per cent of its GNI. Table A.1 shows that an 
independent Scottish state’s net contribution, per average household, would be between 
around €320 and €440 per year across 2014–20. 
A.45  Scotland’s net position for 2014–20 as part of the UK is significantly better; a net 
contribution of around €530 mil ion or around €200 per average household per year, with 
the SCF receipts €228 mil ion higher over 2014–20 than they would otherwise be. CAP 
receipts would be between around €1.2 bil ion higher and around €950 mil ion lower 
over 2014–20 than under an independence scenario. Nevertheless, these numbers are 
dwarfed by the benefits to Scottish taxpayers, as part of the UK, arising from the UK’s 
rebate (around €2.9 bil ion over 2014–20). 
A.46  In short, as part of the UK, Scotland’s net contribution would be around €3.7 bil ion across 
2014–20. This is between €2.2 bil ion and €4.3 bil ion less than its possible net contribution 
as an independent state over 2014–20. 
Table A.1: Average Scottish EU budget receipts and contributions per year during 
2014–20 under a range of scenarios – North Sea oil revenues al ocated on a 
geographical basis22 
Independence scenario: 
Independence scenario: 
Pillar 1 receipts phased 
Pillar 1 receipts €196/ha 
Remain as part of 
Receipts/contributions (€ billion) 
in over ten years 
by 2020 
the UK23 
CAP Pil ar 1  
0.35 
0.66 
0.52 
SCFs  
0.08 
0.08 
0.11 
Total receipts  
0.69 
1.00 
0.90 
Value of UK rebate to Scotland 
-0.09  
-0.09 
0.32 
Gross contributions  
1.84 
1.84 
1.43 
Gross contributions per household (€) 
705  
705 
546 
Net contributions  
1.15 
0.84 
0.53 
Net contributions as percentage of GNI (%) 
0.54  
0.40 
0.25 
Net contributions per household (€) 
439 
323  
203 
21   Based on intra-UK al ocations of CAP and SCF receipts, and a population share of receipts across 
other headings. 
22   These calculations are estimated on the basis of commitments (budgeted al ocations) and Scottish GNI 
including a population share of North Sea oil and gas revenue, and are expressed as € bil ion (2011 prices), 
except for estimates of gross and net contributions per capita. 
23   Scotland’s share of UK CAP Pil ar 1 receipts are unchanged compared with 2013. 

Annex A: An independent Scottish state and  the EU budget  95 
A.47  If an independent Scottish state is al ocated its population share of North Sea oil revenues 
instead of the geographical share assumed in the estimates in Table A.1, Scotland’s GNI, 
and therefore its estimated gross and net contributions, would be lower. Even under this 
GNI scenario (see Table A.2), total 2014–20 annual net contributions for an independent 
Scottish state are estimated to be between around €630 mil ion and around €930 mil ion, 
which corresponds to between around €240 and €360 per average household. As 
part of the UK, the net contribution would be less than €330 mil ion per year, or around 
€130 per average household. 
A.48  Although the absolute sizes of gross and net contributions in Table A.2 are lower than in 
Table A.1, the respective gaps between the independence scenarios and where Scotland 
remains as part of the UK are similar. 
Table A.2: Average Scottish EU budget receipts and contributions per year during 
2014–20 under a range of scenarios – North Sea oil revenues al ocated on a 
population basis24 
Independence scenario: 
Independence scenario: 
Pillar 1 receipts phased 
Pillar 1 receipts €196/ha 
Remain as part of 
Receipts/contributions (€ billion) 
in over ten years 
by 2020 
the UK25 
CAP Pil ar 1 
0.35 
0.66 
0.52 
SCFs 
0.08 
0.08 
0.11 
Total receipts 
0.69 
1.00 
0.90 
Value of UK rebate to Scotland 
-0.06 
-0.06 
0.32 
Gross contributions 
1.62 
1.62 
1.22 
Gross contributions per household (€) 
622 
622 
471 
Net contributions 
0.93 
0.63 
0.33 
Net contributions as percentage of GNI (%) 
0.51 
0.35 
0.18 
Net contributions per household (€) 
357 
241 
127 
A.49  In the context of recent outturn data, Tables A.1 and A.2 would place an independent 
Scottish state among the 11 net contributors. The numbers in Table A.1 suggest that 
under the best-case scenario for an independent Scottish state in respect of receipts, its 
net contribution to the EU budget (as a percentage of its GNI) would be comparable to 
Finland and Austria (both of which have higher levels of GNI per capita). 
A.50  Under the worst-case scenario (a ten-year phase-in of CAP receipts) an independent 
Scottish state’s net contribution would also be far above the net contributions (as a 
percentage of GNI) of Italy and France. It would be comparable to Germany, Denmark 
and Sweden. 
A.51  Charts A.2 and A.3 il ustrate how Scottish taxpayer costs, receipts and net contributions 
would be affected by independence compared with remaining part of the UK. For 
example, even under the most optimistic scenario, for every extra euro in CAP receipts for 
Scottish farmers, taxpayers would incur extra costs of over €3.00. 
24   These calculations are estimated on the basis of commitments (budgeted al ocations) and Scottish GNI 
including a population share of North Sea oil and gas revenue, and are expressed as € bil ion (2011 prices), 
except for estimates of gross and net contributions per capita. 
25   Scotland’s share of UK CAP Pil ar 1 receipts are unchanged compared with 2013. 

96  Scotland analysis: EU and international issues 
Chart A.2: Changes to Scottish contributions and receipts for 2014–20: independence 
compared with Scotland as part of the UK (best-case scenario for CAP receipts in 
Table A.1) 
2000 
1000 
 millions) 


-1000 
-2000 
om Status Quo (
-3000 
-4000 
Deviation fr
-5000 
SCF Receipts  CAP Receipts 
Rebate 
Contribution to 
Net 
Benefit 
UK Rebate 
Position 
Chart A.3: Changes to Scottish contributions and receipts for 2014–20. Independence 
compared with Scotland as part of the UK (worst-case scenario for CAP receipts in 
Table A.1) 
2000 
1000 
 millions)


-1000 
-2000 
om Status Quo ( -3000 
Deviation fr -4000 
-5000 
SCF Receipts  CAP Receipts 
Rebate 
Contribution to 
Net 
Benefit 
UK Rebate 
Position 
A.52  All of the analysis presented in this annex assumes that an independent Scottish state 
would not receive a budgetary correction. Indeed, no Member State has ever negotiated 
a budgetary correction on its accession to the EU. However, it is true that an independent 
Scottish state would be able to ask for a correction of its own during accession 
negotiations. In the unlikely event that it was granted a correction by the unanimous 
approval of all Member States, it would not be reasonable to assume that it would be 
more generous than that negotiated by Denmark at the 2014–20 MFF negotiations 
(the only new correction for 2014–20). On the basis of the correction given to Denmark 
(€130 mil ion per year), adjusted for Scotland’s population, an independent Scottish state 
could get a correction worth €128 mil ion per year across 2014–20. Even with such a 
correction, an independent Scottish state would still face gross and net contributions that 
are much higher than they would be if Scotland remained part of the UK. 

Annex A: An independent Scottish state and  the EU budget  97 
A.53  It is inconceivable that an independent Scottish state would be able to negotiate a 
correction that would ful y compensate for the loss of the benefits of the UK rebate 
(worth around €860 per Scottish household in total across 2014–20). And the negotiating 
dynamics in Europe are such that if Scotland were to prioritise securing a modest 
correction, it would necessarily be at the expense of any objectives it might have in respect 
of other issues that are difficult to negotiate (such as opt-outs in respect of Schengen and 
the euro, or in respect of CAP receipts etc.). 
Other considerations 
A.54  As a net contributor, an independent Scottish state’s incentives with respect to the EU 
budget would be very different compared with the status quo. The current Scottish 
Government benefits from EU receipts without itself making a contribution to the cost of 
the EU budget (although Scottish taxpayers do as part of the UK’s contribution to the EU 
budget), but for an independent Scottish state, the larger the EU budget, the greater its 
cost would be (gross and net). 
A.55  As net contributors to the EU budget, both an independent Scottish state and the UK 
would have an interest in EU budget discipline. It is debatable whether the interests of 
EU budget discipline are best advanced if Scotland becomes an independent state or 
whether there are economies of scale in an EU negotiating context. However, in practice, 
if an independent Scottish state were to prioritise securing its own correction, this would 
tend to reduce its room for pressing for greater EU budget discipline. 
A.56  Economies of scale are also a potential factor when it comes to managing the impact of 
any given EU budget deal. To the extent that there are national flexibilities and scope for 
internal transfers, there may be more scope for managing the stability of EU receipts for 
Scotland as part of the UK. For example, as noted earlier, fol owing the February European 
Council deal, Scotland is benefiting from a €228 mil ion transfer of Structural Funds from 
the rest of the UK, to ensure that the overall real terms cut in such receipts is shared more 
evenly than would otherwise be the case. 
Conclusion 
A.57  The analysis presented within this paper suggests that, in the context of the EU budget, 
Scotland would be significantly worse off as an independent state compared with its 
position as part of the UK, while the situation in respect of CAP receipts would be very 
uncertain. In particular, any uplift in CAP receipts for Scottish farmers, compared with 
the status quo, would require the agreement of 28 other Member States, most – if not 
all – of which would be opposed to the idea of cutting the receipts of their own farmers to 
accommodate any such uplift. Furthermore, 13 of these Member States were the subject 
of a ten-year phase-in of their ‘full entitlement’ to CAP receipts, from their accessions in 
2004, 2007 and 2013 respectively. It can be expected that these Member States would 
bridle at any suggestion that an independent Scottish state seeking accession to the EU 
would be spared such a phase-in. 
A.58  Taking the example of 2014–20, an independent Scottish state’s gross contribution would 
be around €2.9 bil ion higher, and its net position would be between around €2.2 bil ion 
and €4.3 bil ion weaker, than it would be if Scotland were to remain part of the UK. This 
implies that over the same period, its gross contribution would be around €1,100 higher 
per average household, and its net contribution would be between around €840 and 
€1,650 higher per average household, than it would be if Scotland were to remain part of 
the UK. 

Annex B: 
The UN Specialised Agencies 
B.1   The Specialised Agencies are an important part of the United Nations (UN) system. 
They are autonomous bodies, either set up by the UN or linked to it through special 
agreements, coordinating global positions or activity across a range of technical areas. 
B.2   The UK’s size and the range of its expertise mean that its voice is heard right across 
the range of international cooperation, from scientific endeavours such as the European 
Organization for Nuclear Research (CERN) and the European Space Agency to the 
bodies that keep the world communicating such as the Universal Postal Union and the 
International Telecommunication Union. 
B.3   The UK is a member of most of the UN’s Specialised Agencies and a major contributor 
to them, giving it considerable influence in decision making to the benefit of UK interests. 
Examples include: 
•   supporting the work of the World Health Organization (WHO) on the International 
Health Regulations (IHR) which help prevent and respond to acute public health risks 
that have the potential to cross borders and threaten people worldwide. The system 
of alerts set up under the IHR has helped prevent pandemics such as severe acute 
respiratory syndrome (SARS) and avian influenza from taking hold in any part of the 
UK; and 
•   ensuring that the international intel ectual property system is balanced and effective 
and best able to protect the UK’s intel ectual property rights through the World 
Intel ectual Property Organization (WIPO). 
B.4   This annex sets out a detailed analysis of the UN Specialised Agencies of which the UK is 
a member. Assessed contributions are based on the UK Government’s contribution to the 
UN regular budget. The scale is negotiated every three years. The last was agreed at the 
end of 2012, when the UK’s contribution fell from 6.64 per cent to 5.18 per cent. 

Annex B: The UN Specialised Agencies  99 
Food and Agriculture Organization (FAO) 
The FAO’s primary aim is to achieve food security for all and to make sure that people have regular access to enough high quality 
food to lead a healthy life, as well as raising levels of nutrition, improving agricultural productivity and contributing to the growth of 
the world economy. 
UK activity  
The UK has a Permanent Representative based in Rome who covers the FAO. UK interests are focused on 
encouraging appropriate prioritisation of the FAO work programme and its cost effectiveness. 
The UK favours wide membership of FAO regional fisheries bodies, and seeks to participate in these as full 
members wherever the UK can play a constructive role. 
UK contributions 
£20.46 mil ion assessed (2012). The UK paid 6.675 per cent of the budget in 2011 (date of last available 
UN figures). Voluntary contributions are ad hoc and relate to specific programmes and initiatives. 
Criteria for membership 
States can be admitted by application and by gaining a two-thirds majority vote. It is also expected that 
assessed contributions will need to be made equivalent to Gross Domestic Product (GDP). 
How does UK membership 
UK membership of the FAO affords influence on priority policy areas for Scotland, such as regulations and 
benefit Scotland? 
guidelines for international fisheries. 
Owing to the size of its contribution, the UK has significant influence at the FAO, with a quasi-permanent 
seat on the FAO’s Council, which makes decisions on policy priorities and budget. 
Likely contribution of an 
Likely to be in the region of 0.5–0.8 per cent, translating to $5–8.8 mil ion. 
independent Scottish state 
International Labour Organization (ILO) 
The ILO is the international organisation responsible for drawing up and overseeing international labour standards. It is the only ‘tripartite’ 
UN agency that brings together representatives of governments, employers and workers jointly to shape policies and programmes 
promoting decent work for al . This unique arrangement gives the ILO an edge in incorporating ‘real world’ knowledge about employment 
and work. 
UK activity  
The UK attends the International Labour Conference (ILC) in Geneva every June, in a delegation which 
includes employer and worker representatives. The ILC establishes and adopts international labour 
standards and is a forum for discussion of key social and labour questions. The UK is one of ten 
permanent members of the Governing Body, the executive body of the ILO, along with Brazil, China, 
France, Germany, India, Italy, Japan, Russia and the United States (US). The Governing Body meets three 
times a year to take decisions on ILO policy, decide the agenda of the ILC, adopt the budget and elect the 
Director-General. 
UK contributions 
£15.8 mil ion assessed (2013). The UK is the fourth largest donor behind the US, Japan and Germany. 
The UK paid 6.607 per cent of the budget in 2013 (date of last available UN figures). 
Criteria for membership 
Under the terms of the ILO constitution there are two ways for states to gain membership. An existing 
member of the UN may become a member of the ILO by communicating to the Director-General its formal 
acceptance of the obligations of the constitution. An independent Scottish state would therefore first have 
to be in the UN to gain membership this way. 
Alternatively the General Conference of the ILO may also admit members by a vote concurred in by 
two-thirds of the delegates attending the session, including two-thirds of the government delegates 
present and voting. Admission takes effect on the communication to the ILO Director-General by the 
government of the new member of its formal acceptance of the obligations of the constitution. 
How does UK membership 
The UK Government and UK employer and worker representatives have represented Scottish interests, 
benefit Scotland? 
along with those of the rest of the UK, in the ILO, for example when coordinating reports on ILO 
conventions and recommendations, which include contributions from Scotland and the other devolved 
administrations. The Scottish Government is invited to attend the ILC as part of the UK delegation. 
The UK, as one of the leading ILO Member States and a permanent member of the Governing Body, has 
greater influence than many smal er countries. An independent Scottish state would not be a permanent 
member of the Governing Body. 
Likely contribution of an 
Likely to be in the region of 0.5–0.7 per cent, translating to $2.2–2.9 mil ion. 
independent Scottish state 

100  Scotland analysis: EU and international issues 
United Nations Educational, Scientific and Cultural Organization (UNESCO) 
UNESCO’s mission is to contribute to the building of peace, the eradication of poverty, sustainable development and inter-cultural dialogue 
through science, culture, communication and information. It particularly focuses on two areas: Africa and gender equality. 
UK activity  
The UK has Permanent Representation in UNESCO, including an Ambassador and a Board Member, as 
wel  as representatives from the National Commission. The UK participates in negotiations that impact on 
UK interests in various specialist policy groups on culture, science and communications. 
UK contributions 
£16 mil ion assessed (2012). The UK paid 6.605 per cent of the budget in 2011 (date of last available UN 
figures). Voluntary contributions are ad hoc. 
Criteria for membership 
States can be admitted by application to the General Conference every two years. Member States have to 
establish a ‘National Cooperating Body’, usual y a National Commission. 
How does UK membership 
The UK is the fourth largest contributor to the UNESCO budget. As a member of the Executive Board, the 
benefit Scotland? 
UK maintains strong influence on the planning and management of UNESCO’s programmes and budget. 
The UK National Commission’s Scotland Committee provides a means for civil society, institutions and 
individuals in Scotland to contribute directly to the work of UNESCO through the framework of the UK’s 
membership. The Scottish Government is directly involved in regular consultation with the UK Government 
on UNESCO work. 
Until an independent Scottish state could secure membership of UNESCO in its own right, new 
accreditations for World Heritage Sites and other UNESCO schemes (such as biosphere reserves and 
UNESCO Chairs) would not be accepted, and existing ones would be reviewed on a case-by-case basis 
depending on conditions set out in their accreditation agreement. Numerous legal instruments ratified by 
the UK, including the World Heritage Convention, would no longer apply to Scotland. 
Likely contribution of an 
Likely to be around 0.6 per cent, translating to £1.6 mil ion. 
independent Scottish state 
International Civil Aviation Organization (ICAO) 
The ICAO is the agency responsible for air safety, promoting the safe and orderly development of international aviation and setting 
standards and regulations for aviation safety, security, efficiency and regularity. 
UK activity 
The UK has a Permanent Representative as well as an Air Navigation Commissioner. The UK participates in 
various specialist policy groups on safety, environment and security. 
UK contributions 
£3–3.5 mil ion annual assessed contributions (2011–13) – the fourth largest contributor – plus voluntary 
contributions. The UK paid 5.68 per cent of the budget in 2011 (date of last available UN figures). 
Criteria for membership  
All UN states are normal y admitted. An independent Scottish state would need to make contributions in 
proportion to its GDP and aviation activity, adhere to certain aviation standards (which it does now by virtue 
of being part of the UK) and establish bodies and plans to maintain its adherence. 
How does UK membership 
As one of the largest contributors, the UK has particular weight in ICAO discussions. This weight benefits 
benefit Scotland? 
Scotland and the rest of the UK equal y. 
Likely contribution of an 
Assessed contributions are based on GDP and aviation activity. An independent Scottish state’s 
independent Scottish state 
contributions could be similar to Ireland’s, at around £200,000 a year. 

Annex B: The UN Specialised Agencies  101
International Maritime Organization (IMO)
The IMO is responsible for the safety and security of shipping and the prevention of pol ution.
UK activity
The IMO is based in London. The UK has Permanent Representation to the IMO, which oversees UK 
interests on maritime safety and security. 
UK contributions
£1.4 mil ion in 2011. The UK paid 4.7 per cent of the budget in 2011 (date of last available UN figures). 
Criteria for membership
Any UN state can join the IMO by applying the 1948 Convention.
How does UK membership 
As a founder member, host and leading state in the IMO, with a strong maritime sector, the UK is highly 
benefit Scotland?
influential. This has been reflected in the UK’s efforts to protect UK, including Scottish, ship owners and 
operators from unnecessary regulatory burdens, and the IMO’s measures to reduce the incidents of 
pol ution. This is of particular benefit to Scotland by reducing the likelihood of damage to its coastline with 
an impact on its tourist and aquaculture interests.
Likely contribution of an 
Assessed contributions depend on a nation’s maritime sector, and in particular its ‘flag’ (based on the 
independent Scottish state
tonnage of the ships registered with that country). It is not possible to estimate how many vessels currently 
on the UK flag would opt to join a new independent Scottish flag (or indeed whether a Scottish flag state 
regime would attract additional vessels not currently on the UK flag). The size of a national flag is not 
primarily determined by the size of the country or economy – for example Marshal  Islands (population 
c.55,000) has the third largest flag in the world. The UK is currently the sixth largest flag, a significant 
part of which is associated with dependent territories. An independent Scottish flag would be likely to 
be comparatively small and therefore the potential for influence within the IMO would be greatly reduced 
compared with the current collective influence of the UK and dependent territories.
International Fund for Agricultural Development (IFAD)
The IFAD is an international financial institution dedicated to eradicating rural poverty in developing countries. The IFAD’s goal is to 
empower poor rural women and men in developing countries to achieve higher incomes and improved food security.
UK activity
Similar to the FAO. The UK provides funding to specific programmes and projects within the IFAD. Both the 
FAO and the IFAD are covered by the Permanent Representative in Rome. 
UK contributions
All contributions are voluntary, with replenishments done every three years. The UK’s last replenishment 
(in 2012) was for £17 mil ion per annum.
Criteria for membership
Membership is open to any member of the UN, its Specialised Agencies or the International Atomic Energy 
Agency.
How does UK membership 
Owing to the size of the UK’s accumulated contributions to the IFAD since it was established in 1977, the 
benefit Scotland?
UK has a quasi-permanent seat on the Executive Board and access to its sub-committees on evaluation 
and audit. This al ows opportunities for influencing the policy direction and reform priorities of the 
organisation.
Countries that have only recently joined the IFAD – such as Hungary – do not have the possibility to access 
the Board and have little opportunity for influencing. 
Likely contribution of an 
All contributions are voluntary. As an example, Ireland’s contribution is £5.3 mil ion a year.
independent Scottish state

102  Scotland analysis: EU and international issues
World Health Organization (WHO)
The WHO is the coordinating body for health within the UN. It is responsible for providing leadership on global health matters, shaping the 
health research agenda and monitoring and assessing health trends.
UK activity
The UK prepares and fields delegations for the large set-piece meetings of the WHO’s governing bodies – 
principal y the World Health Assembly, its Executive Board and regional meetings. The UK works with 
other Member States and the Secretariat to tackle global health problems. For example, the UK is helping 
to develop a global framework for monitoring non-communicable diseases; improve global preparedness 
for pandemics; promote vaccination; and develop norms and standards. The UK also implements 
the requirements of WHO legal instruments, for example the International Health Regulations and the 
Framework Convention on Tobacco Control. 
UK contributions
£19.1 mil ion assessed (2012). The UK is the fifth largest donor behind the US, Japan, Germany and France. 
The UK paid 6.605 per cent of the budget in 2011 (date of last available UN figures). 
Criteria for membership
Membership of the WHO is open to all states. Members of the UN may become members of the WHO by 
signing or otherwise accepting the WHO constitution.
How does UK membership 
The UK is a major contributor to the WHO. By being part of the UK, Scotland has a seat at the table in 
benefit Scotland?
Executive Board and regional meetings. By being part of the UK it has input into tackling global health 
problems, including developing global frameworks and preparing for pandemics. The WHO is the 
coordinating body for health within the UN, and by default Scotland has representation through the UK 
being a member.
Likely contribution of an 
Estimated to be around £1.9 mil ion a year.
independent Scottish state
International Telecommunication Union (ITU)
The ITU is the UN forum through which information and communication technology (ICT) standards and issues are agreed.
UK activity
The UK membership of the ITU organises worldwide and regional exhibitions and forums, bringing 
together representatives of government and the telecommunications and ICT industry to exchange ideas, 
knowledge and technology.
It is also active in areas including broadband internet, latest-generation wireless technologies, aeronautical 
and maritime navigation, radio astronomy, satel ite-based meteorology, fixed mobile convergence, internet 
access and data, voice, TV broadcasting and next-generation networks.
UK contributions
£2.1 mil ion (2012). The UK paid 2.87 per cent of the budget in 2011 (date of last available UN figures). 
Criteria for membership
Any Member State of the UN may request to become a member of the ITU by submitting an application at 
the next available ITU Plenipotentiary Conference.
How does UK membership 
Scotland has benefited from the UK’s position in the ITU by the UK securing adequate spectrum al ocation 
benefit Scotland?
for mobile telecommunication, radio and broadcasting frequencies, defence, scientific and commercial use. 
Through the UK’s membership of the ITU, telecommunications standardisation meets the requirements for 
industry and users, and infrastructure is maintained so that Scotland can operate and trade (including its 
financial services) with any country around the world.
Likely contribution of an 
Assessed contributions to the ITU are very smal . The amount chargeable for membership is dependent 
independent Scottish state
on those activities in which a Member State participates. An independent Scottish state would need to 
determine what it wants to do and pay accordingly.

Annex B: The UN Specialised Agencies  103
Universal Postal Union (UPU)
The UPU is the primary forum for cooperation between governments and postal administrations relating to the international exchange of 
post. It also provides technical assistance where needed as well as mediating and liaising international y. It sets the rules for international 
mail exchange and makes recommendations to stimulate growth in mail, parcels and financial services.
UK activity
The UK is represented by Royal Mail, which delivers the UK’s objectives in international postal standards. 
Royal Mail has a dedicated team which liaises with the UPU. The UK is one of the biggest Member States in 
the UPU. 
UK contributions
£1.4 mil ion assessed (2012). The UK paid 6.189 per cent of the budget in 2011 (date of last available UN 
figures). The UK also pays £81,000 as a contribution to the running costs of the Berne-based English 
Language Group, which translates documents.
Criteria for membership
Any member country of the UN may become a member of the UPU.
How does UK membership 
As part of the UK, Scotland has benefited from international cooperation between governments and postal 
benefit Scotland?
administrations on the international exchange of post. The UPU also sets the rules for international mail 
exchange as well as recommendations on future growth.
Likely contribution of an 
UPU expenses are financed jointly by the member countries, through a contribution class system. On 
independent Scottish state
admission, new member countries are free to choose one of ten contribution classes ranging from one to 
50 units. An additional contribution class of half a unit is reserved for the least developed countries. Based 
on a comparison with Ireland and on current pricing of membership units, an independent Scottish state 
would likely need to pay up to £200,000. 
World Meteorological Organization (WMO)
The WMO promotes cooperation in the establishment of networks for making meteorological, climatological, hydrological and geophysical 
observations, as well as the exchange, processing and standardisation of related data, and assists in technology transfer, training and 
research. It also fosters col aboration between the national meteorological and hydrological services of its members and furthers the 
application of meteorology to public weather services.
UK activity
The UK is an active part of the WMO, leading on meteorological issues, setting best practice and 
developing the brief on climate change. 
UK contributions
£2.9 mil ion for 2013. The UK paid 6.50 per cent of the budget in 2011 (date of last available UN figures). 
Criteria for membership
Any member of the UN maintaining its own meteorological service may join the WMO or run its own 
meteorological network. An independent Scottish state’s membership would therefore be linked to its plans 
for a national meteorological service.
How does UK membership 
The primary beneficiary of UK engagement with the WMO is the Met Office, which provides public weather 
benefit Scotland?
services for the whole of the UK, including Scotland. Within the WMO, the UK has a high level of influence 
primarily through the Met Office being recognised as one of the leading weather and climate services in the 
world, and is effectively a permanent member of the WMO Executive Council (which has nine European 
seats). This means that the UK can exert a lot of influence in WMO policy developments, including 
standards and policy for exchange of meteorological data, which can be a major cost driver for a national 
meteorological service.
Likely contribution of an 
Based on Finland’s and Ireland’s contributions, an independent Scottish state could expect to pay just over 
independent Scottish state
£200,000 a year, on top of the costs of maintaining its own meteorological service.

104  Scotland analysis: EU and international issues
World Intellectual Property Organization (WIPO)
The WIPO is the UN agency dedicated to the use of intel ectual property (patents, copyright, trademarks, designs, etc.) as a means of 
stimulating innovation and creativity. It promotes the development and use of the international intel ectual property system and also works 
with Member States and stakeholders to improve understanding of and respect for intel ectual property worldwide. The WIPO provides 
economic analysis and statistics, and contributes intellectual property-based solutions to help tackle global challenges.
UK activity
The UK is a member and active participant in WIPO debates. The WIPO works on committees, all of which 
the UK is an active member of, including those with limited membership such as the budget committee. 
The Chief Executive Officer of the UK Intel ectual Property Office or a Minister attends the annual General 
Assemblies. Competence is shared with the European Union (EU). 
UK contributions
£770,000 assessed (2012). The UK paid 6.54 per cent of the budget in 2011 (date of last available UN 
figures). The WIPO is funded mainly by fees from applicants, not Member States. The UK also contributes 
some £10,000–15,000 a year to specific projects.
Criteria for membership
Membership of the WIPO is open to any state that is a member of the Paris Union, the Special Unions and 
Agreements established in relation to that Union and the Berne Union. Furthermore, membership is open to 
states that are not members of the aforementioned unions provided that: (i) it is a member of the UN, any of 
the Specialised Agencies brought into relationship with the UN, or the International Atomic Energy Agency, 
or is a party to the Statute of the International Court of Justice, or (i ) it is invited by the General Assembly to 
become a party.
How does UK membership 
Owing to its size, the UK has major influence at the WIPO – a seat on every committee, including those that 
benefit Scotland?
set the budget, set the agenda and affect the business-facing operations at the WIPO. Scottish businesses 
benefit from UK membership of the WIPO through access to its work to protect intel ectual property rights. 
Likely contribution of an 
Based on a comparison with countries of a similar size, an independent Scottish state could expect to 
independent Scottish state
contribute around £92,000.

Annex C: 
International organisations 
The Commonwealth 
C.1   The UK has the most extensive network of High Commissions across the membership. 
(Diplomatic missions between Commonwealth countries are cal ed High Commissions, 
not Embassies.) London is home to the largest number of Commonwealth diplomatic 
missions, giving the UK considerable bilateral influence with Commonwealth Member 
States. Scotland already has a proud Commonwealth tradition as part of the UK – it has 
hosted the Commonwealth Heads of Government Meeting (Edinburgh 1997) and the 
Commonwealth Games (Edinburgh 1970 and 1986), and will host the Games again in 
2014. Scotland competes under its own flag in the Commonwealth Games, not as part of 
a UK team. Scottish branches of the Commonwealth Parliamentary Association and the 
Royal Commonwealth Society are active, but benefit from being part of a larger and more 
influential UK branch. Scotland also has its own Commonwealth scholarships programme. 
In these ways, Scotland benefits from its own identity and activity within an influential UK; 
an independent Scottish state would retain its identity but lose much of its influence. 
C.2   The Commonwealth uses a ‘scale of contribution’ formula based on the United 
Nation’s (UN’s) assessed contributions system. The UK is the largest contributor to the 
Commonwealth, with a scale of assessment worth 32.65 per cent of the total budget. 
In 2012/13, UK contributions to Commonwealth organisations amounted to approximately 
£40 mil ion, which included about £16 mil ion to the Commonwealth Secretariat. As the 
largest contributor and with the Commonwealth Secretariat and the majority of the pan-
Commonwealth civil society, business and media organisations based in London, the UK 
enjoys notable influence in the organisation. 
C.3   An independent Scottish state would be similar in size to New Zealand, which currently 
pays an assessed contribution of £446,000 a year, and a further £3.4 mil ion in 
discretionary funds. 
The International Monetary Fund 
C.4   The International Monetary Fund (IMF) works to foster international monetary cooperation, 
secure financial stability, facilitate international trade, promote high employment and 
sustainable economic growth, and reduce poverty around the world. 
C.5   The IMF has 188 member countries. It is a Specialised Agency of the UN but has its own 
charter, governing structure and finances. Its members are represented through a quota 
system broadly based on their relative position in the global economy. 

106  Scotland analysis: EU and international issues 
C.6   The Board of Governors of the IMF, on which all member countries are represented, 
is the highest authority governing the Fund. The Chancel or of the Exchequer is the 
UK’s Governor. He also represents the UK at the International Monetary and Financial 
Committee, the 24-member ministerial committee that advises the Board of Governors 
and the main forum for discussing IMF policies at ministerial level. The Governor of the 
Bank of England is the UK’s Alternate Governor of the IMF. The IMF’s day-to-day work is 
conducted by its Executive Board, which comprises 24 Executive Directors representing 
all 188 IMF member countries. The UK is a founding member of the IMF and one of 
the largest contributors, and has its own Executive Director and single seat on the 
Executive Board. 
C.7   In total, eight members hold a single seat on the Executive Board, with the remaining 
members being represented by Executive Directors representing a constituency of 
members. The UK’s quota share is 4.51 per cent, equivalent to 10,738.4 mil ion IMF 
Special Drawing Rights (SDRs).1 Scotland is therefore represented by the UK, both by UK 
representation on the IMF Executive Board and by the Chancel or of the Exchequer on the 
Board of Governors. Figure C.1 shows the make-up of the IMF Executive Board. 
Figure C.1: IMF Board composition 
United States (US) 
India (4) 
Japan 
Brazil (11) 
Germany 
Venezuela (8) 
UK 
Singapore (13) 
France 
South Korea (15) 
China 
Canada (12) 
Russia 
Egypt (13) 
Saudi Arabia 
Iran (7) 
Netherlands (15) 
Chile (6) 
Switzerland (8) 
Gambia (22) 
Key 
Austria (8) 
Togo (21) 
= single seat 
Italy (6) 
Denmark (8) 
= constituency seat. 
The numbers in 
parentheses 
correspond to the 
number of members 
in a constituency 
1   The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ 
official reserves. Its value is based on a basket of four key international currencies, and SDRs can be 
exchanged for freely usable currencies. Under its Articles of Agreement, the IMF may al ocate SDRs to member 
countries in proportion to their IMF quotas. 

Annex C: International organisations  107 
C.8   In case of a vote in favour of independence, an independent Scottish state would become 
a non-member country and would be required to apply to become a member of the 
IMF. It would need to submit an application, which would be considered by a committee 
composed of IMF Executive Directors. Proposals would then be submitted to the IMF 
Board, and then on to the Board of Governors, with recommendations in the form of 
a Membership Resolution. These recommendations would cover the amount of quota 
in the IMF, the form of payment of the subscription, and other terms and conditions 
of membership. If the Board of Governors adopted an independent Scottish state’s 
Membership Resolution, it could become a member once it had taken the legal steps 
required to enable it to sign the IMF’s Articles of Agreement, and to fulfil the obligations 
of IMF membership. An independent Scottish state would then be required to appoint 
a Governor and an Alternate Governor (usual y the Finance Minister and Central Bank 
Governor). 
C.9   An independent Scottish state would not be represented as a single seat, and, as with 
other small states, would be required to join a constituency. One option might be for the 
rest of the UK and Scotland to form a constituency. Alternatively, an independent Scottish 
state could join one of the other constituencies, most likely one representing other 
EU countries. 
C.10  If an independent Scottish state was a member of the IMF in its own right, it would be 
represented at the IMF Executive Board by its constituency Executive Director. As with 
other IMF members, being a member would require an independent Scottish state 
to provide data to the IMF, to undertake regular Article IV assessments, to meet its 
obligations under the IMF Articles of Agreement and to develop a position on the range of 
issues discussed by the IMF Board. 
C.11  An independent Scottish state would require the necessary administrative infrastructure 
in order to deliver its obligations to the IMF; for example, in order to buy or sell SDRs. IMF 
members often need to buy SDRs to discharge obligations to the IMF, or they may wish to 
sell SDRs in order to adjust the composition of their reserves. As with all existing members 
of the IMF, an independent Scottish state would also be required to contribute from its 
reserves, in line with its IMF quota share. Based on its Gross Domestic Product (GDP) 
and other factors, if it is assumed that an independent Scottish state’s quota share 
is very roughly similar to Finland’s, its quota share would be around SDR 1.2 bil ion 
(SDR 2.4 bil ion after implementation of the IMF quota reforms agreed in 2010). 
C.12  There is a recent precedent for a region of an existing member of the IMF to declare 
independence and apply to become a member of the IMF in its own right – South Sudan. 
In this case, Sudan was judged to be the ‘continuing country’ and retained all its assets in, 
and liabilities to, the IMF. South Sudan became a non-member country and applied 
for membership. 
The World Bank 
C.13  The World Bank works to deliver increased prosperity and poverty reduction in low income 
and developing countries around the world. The World Bank also contributes to many of 
the norms and standards for trade, investment climate and public financial management. 
The World Bank is core to delivering UK international development objectives and 
contributes to UK prosperity by increasing global economic development. 
C.14  The World Bank overall has 188 member countries. It is a Specialised Agency of the UN 
but has its own charter, governing structure and finances. Its members are represented 
through a quota system broadly based on their relative position in the global economy and 
the extent to which they either contribute or borrow from the World Bank. 

108  Scotland analysis: EU and international issues 
C.15  The Board of Governors of the World Bank, on which all member countries are 
represented, is the highest authority governing the organisation. The UK Secretary of 
State for International Development is the UK’s Governor and represents the UK at the 
Development Committee, the main committee of the Board of Governors and the main 
forum for discussing World Bank policies at ministerial level. The Chancel or is the UK’s 
Alternate Governor of the World Bank. 
C.16  The World Bank’s day-to-day work is conducted by the Bank’s Executive Board, which 
comprises 25 Executive Directors and the World Bank Group President and represents all 
World Bank member countries. The UK has its own Executive Director and holds a single 
seat on the Executive Board. Five Executive Directors are appointed by the members with 
the five largest numbers of shares (currently the US, Japan, Germany, France and the UK). 
China, the Russian Federation and Saudi Arabia each elect their own Executive Director. 
The other Executive Directors are elected by the other members. The voting power 
distribution differs from agency to agency within the World Bank Group, but at the main 
World Bank Board at which most decisions are taken, the UK has 4.23 per cent of the 
total votes. 
C.17  In the case of a vote in favour of independence, an independent Scottish state would 
become a non-member country and would be required to apply to become a member 
of the IMF first and then a member of the World Bank. Its application would then be 
submitted to the World Bank Board, and then on to the Board of Governors, with 
recommendations in the form of a Membership Resolution. If the Board of Governors 
adopted the Membership Resolution, an independent Scottish state could become a 
member once it had taken the legal steps required to enable it to sign the World Bank 
Articles of Agreement, and to fulfil other requirements. An independent Scottish state 
would then be required to appoint a Governor and an Alternate Governor (usual y the 
Finance Minister or Development Minister). 
C.18  There is a recent precedent for a region of an existing member of the World Bank to 
declare independence and apply to become a member of the World Bank in its own 
right – South Sudan. In this case, Sudan was judged to be the ‘continuing country’ and 
retained all its assets in, and liabilities to, the World Bank. South Sudan became a non­
member country and applied for membership. 
C.19  An independent Scottish state would unlikely be represented as a single seat, and would 
be required to join a constituency. One option might be for the rest of the UK and an 
independent Scottish state to form a constituency. Alternatively, an independent Scottish 
state could join one of the other constituencies, most likely that representing other western 
European countries. 
C.20  If an independent Scottish state was a member of the World Bank in its own right, it would 
be represented at the Bank’s Executive Board by its constituency Executive Director. As 
with other World Bank members, being a member would require an independent Scottish 
state to develop a position on the range of issues discussed by the World Bank Board. 
C.21  As with all existing members of the World Bank, an independent Scottish state would be 
required to contribute to the purchase of shares in line with its quota share. Based on its 
GDP and other factors, if it is assumed that an independent Scottish state’s quota share 
would be very roughly similar to Finland’s, an independent Scottish state’s quota share 
would be 0.55 per cent. However, this may change, as the World Bank is due to agree 
reforms to its voting rights and shares in 2015. 

Annex C: International organisations  109 
C.22 If an independent Scottish state became a member, it would have the opportunity to 
shape the World Bank’s investments and provide input into international development 
policy at the highest levels in the World Bank. However, it would also need to develop the 
policy making capacity to be able to do so. This capability would take time to develop. 
The Council of Europe 
C.23  The Council of Europe (CoE) was established in 1949 as a pan-European international 
organisation to protect and promote common standards of human rights, democracy and 
the rule of law in Europe. The UK was a founding member. The CoE is the most developed 
regional system of human rights protection worldwide and offers major opportunities 
to further the UK’s human rights objectives, as well as promoting the rule of law and 
democracy, throughout wider Europe and beyond. Membership expanded rapidly in the 
1990s; there are now 47 Member States, with all European countries except Belarus, 
Kazakhstan and Kosovo represented; the Holy See is an observer. The CoE Member 
States agree and set standards on issues including human rights, terrorism, crime, 
money laundering and trafficking, by negotiating and ratifying Conventions. The UK is an 
active and influential member of the CoE, partly because of its status as one of five major 
contributors (‘Grands Payeurs’) to the budget. 
C.24  The UK is a major player within the CoE, and Scotland benefits through that. While 
a certain degree of influence can also be achieved by active, wel -informed and wel ­
respected diplomats and Ambassadors, smal er Member States, of which an independent 
Scottish state might be one, do not carry the same influence as the Grand Payeurs
C.25  The CoE uses a formula based on GDP and population size to work out contributions 
to the budget. According to the Scottish Government website, Scotland’s GDP for 2011 
was £150 bil ion, which includes a geographical share of North Sea oil and gas.2 The 
population and GDP of Scotland are very roughly similar to those of Finland, which pays 
around €3 mil ion per annum to the non-discretionary CoE budgets. The UK’s contribution 
to the non-discretionary CoE budgets in 2012 was nearly €31 mil ion. 
C.26  The UK held the Chairmanship of the CoE’s Committee of Ministers (its main decision 
making body, representing all members) from November 2011 to May 2012. Its main 
achievement during the Chairmanship was the adoption of the Brighton Declaration 
on reform of the European Court of Human Rights. The agreed reforms will help to 
ensure that the Court focuses on the cases that real y require its attention and deals 
with its large backlog of cases (over 140,000), and will help to improve the quality of its 
judges and judgments. A reformed European Court of Human Rights is in the UK’s (and 
therefore Scotland’s) national interest. In an increasingly networked world, UK security and 
prosperity depend to a large extent on stability and adherence to human rights across the 
European continent: this needs an effectively functioning Court. The UK is heavily involved 
in ensuring that the reforms are implemented swiftly. Progress has already been made 
in clearing the backlog of inadmissible cases before the Court, and Protocol 15, which 
will introduce the required amendments to the Convention, was opened for signature in 
June 2013. 
2   This is based on the assumption that an independent Scottish state would receive a geographical share of 
North Sea oil and gas, as estimated by the Scottish Government in Scottish National Accounts, Quarterly 
National Accounts table, February 2013, 
www.scotland.gov.uk/Topics/Statistics/Browse/Economy/SNAP/expstats/aggregates/SNAP2012Q3 

110  Scotland analysis: EU and international issues 
The Organization for Security and Co-operation in Europe 
C.27  The Organization for Security and Co-operation in Europe (OSCE) is the world’s largest 
regional security organisation, comprising 56 participating states including the US, 
Canada, Russia, Western Balkans, South Caucasus and Central Asia. The UK is one of 
five major contributors to the OSCE annual budget of around €150 mil ion (UK contribution 
approximately €15 mil ion). Membership of the OSCE offers strategic and practical benefits 
to the UK in support of foreign policy objectives, at relatively low cost. 
C.28  Participating states have adopted a series of political (not legal y binding) commitments and 
can be held to account if found to be in breach of these. These commitments are more 
far-reaching than in any other international framework, and represent an important tool in 
support of the UK’s international human rights and democracy objectives. The OSCE is 
the home of a valued framework of confidence and security building measures (CSBMs), 
including the Vienna Document 2011. It is also the forum for complementary security 
activity on conventional arms control/CSBMs, namely the Conventional and Armed 
Forces in Europe (CFE) Treaty and Open Skies Treaty. The OSCE also has a leading 
or supporting role in useful operational work throughout its area: observing elections, 
defusing minority-related conflicts, responding to crises, dealing with trans-national threats 
(e.g. cyber security), building capacity and bolstering civil society. 
C.29 It is assumed that an independent Scottish state would be part of the Vienna Document 
zone of application for confidence and security building measures. An independent 
Scottish state would then need to decide on whether to apply to join other associated 
regimes, such as the Open Skies Treaty or a future conventional arms control regime. 
Although the CFE Treaty does not have an accession clause, accession would still be 
possible on the basis of a supplementary agreement or protocol. 
The European Investment Bank 
C.30 The European Investment Bank (EIB) is the EU’s long-term lending institution and lends to 
projects that further the EU’s policy goals. All Member States of the EU are members of 
the EIB with a shareholding, Governor and representative on the Board of Directors. The 
UK is currently represented by the Chancel or of the Exchequer on the Board of Governors 
and by HM Treasury’s Europe Director on the Board of Directors. Scotland is covered by 
the UK’s membership. The UK is the joint largest shareholder, along with France, Germany 
and Italy (which each have a shareholding of 16 per cent). 
C.31  Although the EIB lends to projects outside the EU, in support of EU external policy 
objectives, around 90 per cent of EIB lending is to EU countries. As part of the UK, 
Scotland is eligible for this EU lending, and benefits significantly from it. Between 2008 and 
2012 finance contracts worth €1.4 bil ion were signed in Scotland.3 The EIB’s investments 
in Scotland have contributed to, among other projects, the financing of six onshore wind 
farms, the completion of the M80 motorway, the construction and refurbishment of over 
40 schools, investment in social housing and the construction of new facilities at the 
University of Strathclyde. 
3  The European Investment Bank Statistical Report, European Investment Bank, 2012 

Annex C: International organisations  111 
C.32  Unless and until an independent Scottish state became a Member State of the EU it could 
not be a member of the EIB. Article 308 of the Treaty on the Functioning of the European 
Union states that “the members of the European Investment Bank shall be the Member 
States” of the EU. By virtue of having to apply to join the EU as a new Member State, for 
the period of application, an independent Scottish state may be ineligible for the lending 
the EIB undertakes inside the EU. An independent Scottish state could become eligible for 
the lending the EIB undertakes outside the EU but this is by no means certain and would 
likely require the approval of the EIB’s Board of Governors. 
C.33 There is no precedent at the EIB for the treatment of an independent Scottish state. 
In terms of an independent Scottish state gaining a capital share in the EIB, there would 
appear to be two options: either it would have to pay its own capital share into the Bank; 
or, based on negotiations with the rest of the UK, it could be granted a portion of the 
UK’s shareholding. 
C.34 The size of an independent Scottish state’s shareholding would likely be based on Scottish 
GDP at market prices as a share of total EU GDP;4 it is likely therefore that its shareholding 
would be significantly smal er than the UK’s. Around 9 per cent of Member States’ capital 
subscription is paid into the EIB; the rest is referred to as cal able capital, and can be 
cal ed upon in the event that the Bank is unable to meet its obligations. The UK capital 
subscription to the EIB consists of €3.5 bil ion of paid-in capital and €35.7 bil ion of cal able 
capital. So Scotland would take on a contingent liability and, depending on which of the 
options above applies, may be expected to contribute paid-in capital. 
C.35 An independent Scottish state would gain its own Governor and Director. However, since 
voting power on the EIB Board of Directors is dictated by their shareholding size, an 
independent Scottish state’s influence on the Board of Directors would be reduced. 
The European Bank for Reconstruction and Development 
C.36 As a member of the European Bank for Reconstruction and Development (EBRD), the UK 
has a shareholding, Governor and representative on the Board of Directors of the Bank. 
Scotland is covered by the UK’s membership. The UK – along with France, Germany, 
Italy and Japan – is the joint second largest shareholder, with a shareholding of around 
8 per cent.5 The EBRD is an effective, wel -respected institution, which has played an 
important role, since its establishment in 1991, in supporting the transition to democratic 
market economies of its countries of operation in Central and Eastern Europe and 
countries of the former Soviet Union, and is now supporting the transition of a number of 
countries in the Southern and Eastern Mediterranean region. The UK’s influence at the 
EBRD contributes to achieving its foreign policy goals. 
C.37   The only criterion required for a country to join the EBRD6 is that it must be a member 
of the IMF. The EBRD has dealt with countries gaining independence in different ways 
depending on the political context. In the case of the dissolution of Czechoslovakia the 
capital share of the former state was split between the current Czech Republic and the 
Slovak Republic. However in the case of Montenegro, Serbia’s shareholding remained 
unchanged and Montenegro purchased a shareholding in the Bank. 
4  There have been derogations from this formula in the past but none since 1981. 
5  EBRD Financial Report, European Bank for Reconstruction and Development, 2012 
6  Agreement Establishing the European Bank for Reconstruction and Development 

112  Scotland analysis: EU and international issues 
C.38 It is clear that as a member of the EBRD, an independent Scottish state would take 
on a contingent liability in the form of cal able capital, that its shareholding would be 
considerably smal er than the UK’s and, depending on which of the options above 
applied, that it may be expected to contribute paid-in capital. The UK’s capital subscription 
to the EBRD consists of €2 bil ion of cal able capital and €0.5 bil ion of paid-in capital. 
An independent Scottish state’s influence would likely be significantly reduced, as voting 
power on both the Board of Directors and the Board of Governors is proportionate to 
shareholding size. The arrangements for Board representation are complex and open to 
potential change, but under any circumstances, it is most unlikely that an independent 
Scottish state would have its own exclusive Director. It would join others in a multi-country 
constituency where it is most likely that it would be represented by a Director from an 
existing member. 
The Financial Action Task Force 
C.39 An important part of dealing with the threat of international terrorism is effective measures 
for tackling money laundering and terrorism financing. The UK is a founding member of 
the Financial Action Task Force (FATF), the body that sets the global standards in these 
areas, including those for financial institutions on customer due diligence requirements, 
record keeping and supervision.7 
C.40  Countries seek membership to demonstrate commitment to robust anti-money laundering 
and counter-terrorism financing regimes, to play a part in setting FATF standards, and 
to take part in the mutual evaluation process which assesses jurisdictions’ compliance 
with those standards. As such, an independent Scottish state may still want to be a part 
of FATF. However, there is currently a moratorium on membership. FATF has set up a 
working group to consider the question of whether FATF should expand, and if so on what 
grounds. It is therefore not yet possible to say whether an independent Scottish state 
would meet the admission criteria, as these are yet to be agreed by FATF. 
C.41  Membership of a FATF-style regional body such as MONEYVAL would present an 
alternative option if an independent Scottish state failed to meet the admission criteria for 
FATF, or if FATF chose not to expand at a time when an independent Scottish state was 
seeking membership.8 
7   FATF was founded by the G7 in 1989. More information can be found on the FATF website: 
www.fatf-gafi.org/pages/aboutus/historyofthefatf/ 
8   MONEYVAL – the Committee of Experts on the Evaluation of Anti-Money Laundering Measures – is the 
regional body for the Western Europe region. 

Annex D: 
Analysis of countries of a similar size to an independent Scottish state 
Country 
Population  Defence spending 
Gross Domestic  Diplomatic network 
Overseas trade and 
Official Development 
International 
(millions) 
Product (GDP) 
investment 
Assistance (ODA) 
organisations 
United 
62.7 
£38 bil ion – 2.5% of GDP. 
£1,535 billion 
270 offices in 170 
162 offices in 96 countries 
In 2012 the UK provided £8.6 bil ion  Extensive and includes: 
Kingdom 
Second highest level of defence 
countries and over 
of ODA – ranking third in the world 
EU, UN, NATO, G7, G8, 
(UK) 
spending in NATO. Fourth largest 
14,000 staff, and an 
(behind the US and Germany) for 
G20, Commonwealth, 
defence budget global y 
annual budget of 
volume of ODA provided. 28 focus 
UNSC, OSCE, CoE, 
£1.6 billion 
countries 
FATF, IMF, EIB, EBRD, 
UN Specialised Agencies 
Scotland 
5.251 
The Scottish Government 
£150 billion2 
Represented through 
Represented through the 
In addition to contributing to the 
Currently represented 
proposes a defence and security 
the UK’s 270 offices in 
UKTI’s 169 offices in more 
UK programme Scotland has 
through the UK’s 
budget of £2.5 bil ion, which 
170 countries and over 
than 100 countries, 11 of 
a Scottish programme worth 
extensive membership 
is under 7% of UK spend on 
14,000 staff 
which host officials from 
£9 mil ion a year focused on Malawi,  of international 
defence and security, and ignores 
the Scottish Government 
Rwanda, Tanzania and Zambia. 
organisations 
any start-up costs 
or Scottish Development 
Additional £3 mil ion until 2015 for 
International. Scottish 
focus countries for water resource 
Development International 
management projects. The Scottish 
has trade/investment offices 
Government states it would al ocate 
in 16 countries and territories 
0.7% of GNI to ODA 
outside the UK 

11
Country 
Population  Defence spending 
Gross Domestic  Diplomatic network 
Overseas trade and 
Official Development 
International 

S
(millions) 
Product (GDP) 
investment 
Assistance (ODA) 
organisations 
cotland
Denmark 
5.6 
£2.8 bil ion – 1.4% of GDP. 
£207.8 billion 
78 Embassies 
Denmark’s overseas trade 
0.85% of GNI. Denmark 
Joined the then 
 a
Full and active member of NATO. 
worldwide, 28 
and investment promotion 
coordinates with other donors, 
European Community in 
naly
Does not participate in EU 
Consulates-General, 
is handled by two separate 
for example with the UK in East 
1973, and joined NATO 
si
CSDP defence activities. Does 
424 Honorary Consuls,  organisations: the Danish 
Africa on Somalia and in regional 
in 1949. It is a member 
s: E
not deploy forces on EU military 
seven missions 
Trade Council and Invest in 
capacity-building work 
of the CoE, UN, WTO 
U
operations or participate in 
at international 
Denmark. The Trade Council 
and OSCE, as well as 
 a
n
development of EU military 
organisations, 
employs approximately 300 
the Nordic Council and 
d in
capabilities. 
employing 2,700 people3  staff, working in about 90 
Arctic Council 
te
Provides military personnel to 
Embassies, Consulates-General 
rnat
NATO and UN-led deployments. 
and Trade Commissions around 
io
Current operations include 
the world.4 Invest in Denmark 
na
stabilisation operations in 
is represented in 14 locations 
l iss
Afghanistan and Kosovo. 
outside Denmark: Silicon 
ue
Focus on being able to contribute 
Valley, Toronto, New York, 

to multi-national operations, as 
London, Paris, Munich, Istanbul, 
well as domestic military tasks, 
Bangalore, Beijing, Shanghai, 
including search and rescue, 
Seoul, Taipei, Singapore and 
counter-privacy and airspace 
Tokyo. The Trade Council is also 
defence and surveil ance. 
responsible for Trade Policy5 
Retains conscription through 
four-month military service. 
Armed forces figure includes 
1,750 conscripts 
Norway 
5.0 
£4.4 bil ion – 1.6% of GDP. 
£306.4 billion 
Embassies in 86 
Norway’s UKTI equivalent is 
0.93% of its GNI (£30 bil ion). 
European Economic 
Full and active member of NATO. 
countries, more than 
Innovation Norway, a state-
Close to half of Norway’s 
Area, Schengen 
Provides military personnel to 
100 missions in total. 
owned company started 
international development budget 
Convention, NATO, UN, 
NATO and UN-led deployments. 
Annual budget 
in 2004 with offices in 30 
is channelled through multilateral 
WTO, IMF, EBRD, CoE, 
Current operations include 
of NOK 35 bil ion 
countries with over 700 
organisations, and Norway works 
Arctic Council, OSCE 
stabilisation operations in 
(£3.8 bil ion) of which 
employees7 
actively with other donors, e.g. 
Afghanistan and Kosovo. 
£30 billion earmarked 
through its Climate and Forest 
Focus on territorial defence, 
for development 
Initiative 
particularly in the High North. 
assistance6 
Importance placed on al iances 
and multi-national operations. 
Retains policy of partial 
conscription. Armed forces figure 
includes 7,700 conscripts 

Country 
Population  Defence spending 
Gross Domestic  Diplomatic network 
Overseas trade and 
Official Development 
International 
(millions) 
Product (GDP) 
investment 
Assistance (ODA) 
organisations 
Slovakia 
5.4 
£0.6 bil ion – 1.1% of GDP. 
£60 billion 
Embassies in 68 
Slovakia recorded a record 
Outward foreign direct investment 
Member of the EU, 
Full and active member of NATO. 
countries, nine 
trade surplus €3.6 bil ion in 
position of Slovakia in 2011 was 
CoE, NATO, OSCE, 
Provides military personnel 
Consulate-Generals, 
2012, with exports reaching 
€2.4 billion10 
IAEA, IEA, WTO, 
to NATO, EU and UN-led 
eight Slovak institutes, 
€62.7 billion and imports 
OECD, IMF, EBRD. UN 
deployments. 
and representation 
€59.1 bil ion. Slovakia has 
organisations in Slovakia 
Focus on contributions to 
at six permanent 
reported a cumulative annual 
– Slovak commission 
international operations 
missions. A number of 
surplus since 2009. This is a 
for UNESCO, UNICEF, 
Slovak diplomats have 
result not only of Slovakia’s 
UN High Commissioner 
careers in international 
export performance but also of 
for Refugees, UNFPA 
organisations and 
decreasing imports due to weak 
(population fund) 
the EU. The Slovak 
domestic demand and slowing 
Foreign Affairs budget 
industrial production. Germany 
in 2012 was just over 
is by far the most important 
€127 million with 
economic and trade partner for 
A
a predicted cut to 
Slovakia, with combined direct 
nn
€119 mil ion for 20138 
and indirect exports amounting 
ex D
to around 50% of GDP. The 
: A
Economy Ministry is currently in 
n
the process of preparing a new 
aly
Export Strategy for Slovakia 
sis o
for 2014–20 – its priority is to 
f c
reduce Slovakia’s dependence 
o
on the EU (destination of 84% of 
un
Slovakia’s exports in 2012) and 
trie
develop an exports structure 
s o
outside the EU (Russia, Asia, 
f a s
etc.)9 
im
ilar s
ize t
o a
n i
ndependent S
cottish s
tate 115 

11
Country 
Population  Defence spending 
Gross Domestic  Diplomatic network 
Overseas trade and 
Official Development 
International 

S
(millions) 
Product (GDP) 
investment 
Assistance (ODA) 
organisations 
cotland
Finland 
5.4 
£2.3 bil ion – 15% of GDP. 
£164.5 billion 
93 posts (70 of which 
Team Finland (official y 
0.53% of its GNI. Finland is 
Member of almost all 
 a
Historically a neutral state. 
are Embassies) are 
launched in 2012) is the main 
committed to reaching the target 
major international 
naly
Contributes to EU CSDP 
being reformed, with 
actor supporting Finland’s 
level of 0.7% ODA/GNI by 2015 and  organisations, 
si
activities, including participating 
the closure of nine 
external economic relations, 
is one of the few donor countries 
with Permanent 
s: E
in EU battlegroups. 
Embassies (to save 
internationalisation of Finnish 
that have been able to increase 
Representations in the 
U
Russia is a key factor in security 
€13 mil ion), which may 
businesses (especial y small 
commitments during the past years.  EU, CoE, OSCE, OECD, 
 a
n
environment and defence 
rise to 15 in 2013. 
and medium-sized enterprises),  However, the financial crisis has 
UN, WTO, UNESCO, 
d in
planning. 
2013 draft budget is 
the country’s brand and inward  forced the Government to cut back  IAEA and the Western 
te
Provides military personnel 
€201.8 million for this 
investments. It is an umbrel a 
on further increases 
European Union. 
rnat
to NATO, EU and UN-led 
network alone, rising to  organisation bringing together 
Although not a NATO 
io
deployments. 
€1.304 bil ion when ODA  existing key authorities and 
member, Finland is a 
na
Current operations include 
is factored in. Finland 
organisations, operating under 
keen participant in the 
l iss
stabilisation operations in 
has 16 Cultural and 
governmental guidance. More 
Partnership for Peace 
ue
Afghanistan, Bosnia and Kosovo. 
Academic Institutes (the  than 70 teams have been set up 
Programme and is a 

Focus on acting as a guarantor of 
equivalent of the British  in different countries12 
long-standing contributor 
national sovereignty. 
Council) around the 
to the International 
Improving ability to participate in 
d11
worl
Security Assistance 
multi-national peacekeeping and 
Force in Afghanistan 
peace enforcement. 
Retains conscription, reflecting 
the importance of a broad section 
of society being able to support 
territorial defence. Armed forces 
figure includes 13,650 conscripts 

Country 
Population  Defence spending 
Gross Domestic  Diplomatic network 
Overseas trade and 
Official Development 
International 
(millions) 
Product (GDP) 
investment 
Assistance (ODA) 
organisations 
Ireland 
4.6 
£0.7 bil ion – 0.6% of GDP. 
£138 billion 
1,485 staff (300 of which  Ireland has separate trade 
0.52% of GNI. Despite the Irish 
Member of most UN 
Historically a neutral state. 
are local y engaged) 
development and inward 
Government’s commitment to the 
bodies and Specialised 
Contributes to CSDP and 
in 73 missions, 55 
investment agencies – 
target to increase this to 0.7% by 
Agencies. Despite 
UN peacekeeping, particularly 
Embassies, eight mult ­i
Enterprise Ireland and the 
2015, the current Irish overseas 
implementing a 
drawing on experience of 
cultural missions, eight 
IDA Ireland respectively. 
aid budget – US$914 mil ion in 
programme of severe 
countering domestic terrorism 
Consulates-General, 24  Enterprise Ireland, operating 
2011 – has been cut by over 30% 
fiscal readjustment, 
and paramilitary activity to 
Honorary Consulate ­s
out of 31 offices covering 60 
since 2008. The main focus of 
the Irish Government 
provide explosive device 
General and 62 
markets, provides a range of 
Irish overseas aid funding and 
has been determined 
expertise. 
Honorary Consulates. 
advice and grant support to its  field implementation is Africa, 
to demonstrate that 
Provides military personnel 
The annual cost of the 
client companies. IDA Ireland 
with Uganda the top recipient 
Ireland is still willing 
to NATO, EU and UN-led 
diplomatic service is 
operates out of its main Irish 
of Irish ODA 
and able to take on 
deployments. 
around €90 million13 
offices and 12 other overseas 
major international 
Current operations include 
offices. In 2010, the Republic 
responsibilities, including 
stabilisation operations in 
of Ireland’s top nine trading 
the Chairmanship of the 
A
Afghanistan, Bosnia and Kosovo. 
partners were in the EU or US. 
OSCE in 2012 and the 
nn
Primary task is to defend 
China, its tenth largest trading 
Presidency of the EU 
ex D
the state against armed 
partner, accounted for just 3% 
in 2013 
: A
aggression, while there also 
of Irish trade14 
n
remains emphasis on peace 
aly
support, crisis management and 
sis o
humanitarian operations 
f c
ountries o
f a s
im
ilar s
ize t
o a
n i
ndependent S
cottish s
tate 117 

11
Country 
Population  Defence spending 
Gross Domestic  Diplomatic network 
Overseas trade and 
Official Development 
International 

S
(millions) 
Product (GDP) 
investment 
Assistance (ODA) 
organisations 
cotland
Croatia 
4.4 
£0.6 bil ion – 1.7% of GDP. 
£38.5 billion 
Croatia has 51 
Croatia’s trade balance with 
While smal , Croatia plays an 
EU, UN, OSCE, CoE, 
 a
Full and active member of NATO. 
Embassies around 
the EU totalled €15.486 billion 
active role at the international level,  Regional Cooperation 
naly
Provides military personnel to 
the world. The annual 
in 2012 of a total €25.980 
recently supporting humanitarian 
Council, IMF, World 
si
NATO and UN-led deployments. 
budget of the Croatian 
bil ion trade with the world. 
projects in Syria, Libya and 
Bank, WTO, EBRD, 
s: E
Current operations include 
Ministry of Foreign 
The EU accounted for 55.9% 
Afghanistan. Croatia was until 
Partnership for Peace, 
U
stabilisation operations in 
Affairs is 710 million 
of Croatia’s total exports and 
recently an ODA-income country. 
NATO 
 a
n
Afghanistan and Kosovo. 
kuna. This is expected 
61.8% per cent of total imports.  With EU accession, Croatia has 
d
 in
Focus on ensuring national 
to fall in 2014 to 609 
Croatia’s major trading 
had to increase the amount of its 
te
sovereignty, as well as defence 
million kuna15 
partners include the EU, China,  budget given to ODA to meet EU 
rnat
of allies and participation in crisis 
Russia, the Western Balkans, 
standards. 4 mil ion kuna of the total 
io
response operations. 
Switzerland and the US. 23.9%  Croatian Ministry of Foreign Affairs 
na
Armed forces figure includes 
of Croatia’s exports to the EU 
budget of 710 mil ion kuna goes to 
l iss
250 naval conscripts 
are machinery and transport 
humanitarian aid abroad 
ue
equipment.16 

Croatia does not have a UKTI 
equivalent: its closest equivalent 
would be the Croatian 
Agency for Investments and 
Competitiveness, the main task 
of which is to promote Croatia 
as a desirable investment 
destination17 
Notes: 
Abbreviations: CoE, Council of Europe; CSDP, Common Security and Defence Policy; EBRD, European Bank for Reconstruction and Development; EIB, European Investment Bank; EU, European Union; FATF, 
Financial Action Task Force; GNI, Gross National Income; IAEA, International Atomic Energy Agency; IMF, International Monetary Fund; NATO, North Atlantic Treaty Organization; OECD, Organisation for Economic 
Co-operation and Development; OSCE, Organization for Security and Co-operation in Europe; UKTI, UK Trade & Investment; UN, United Nations; UNESCO, United Nations Educational, Scientific and Cultural 
Organization; UNSC, United Nations Security Council; US, United States; WTO, World Trade Organization. 
All population figures come from the 2011 statistics at IMF – World Economic Outlook Database, April 2013. 
All figures for defence expenditure come from the SIPRI Military Expenditure Database, 
www.sipri.org/research/armaments/milex/milex_database, conversion rate: Bank of England annual average spot exchange rate 2012, US dol ar into sterling, 0.631. 
All figures for armed forces (active armed forces, not including reserves) come from The Military Balance 2012, International Institute of Strategic Studies, 2012. Rounded to nearest 100. 
All figures for Gross Domestic Product come from the 2011 statistics at IMF – World Economic Outlook Database, April 2013, conversion rate: Bank of England annual average spot exchange rate 2011, US dol ar 
into sterling, 0.624. 
Al  figures for Official Development Assistance come from the Organisation for Economic Co-operation and Development at www.oecd.org/dac/stats/ 
aidtopoorcountriesslipsfurtherasgovernmentstightenbudgets.htm. 

Footnotes: 
1  
Scotland’s Population 2011 – The Registrar General’s annual review of demographic trends, General Register Office for Scotland, 
www.gro-scotland.gov.uk/statistics/at-a-glance/annrev/2011/ 
2  
Key Economy Statistics, Scottish Government, www.scotland.gov.uk/Topics/Statistics/Browse/Economy 
3  
The Danish Foreign Service, Ministry of Foreign Affairs Denmark, http://um.dk/en/about-us/organisation/the-danish-foreign-service/ 
4  
The Organisation, Ministry of Foreign Affairs Denmark http://um.dk/en/tradecouncil/about/org/ 
5  
About Invest in Denmark, Ministry of Foreign Affairs Denmark, www.investindk.com/About-us 
6  
Mil er A, ‘Could an independent Scotland operate a diplomatic network?’, St. Andrews Foreign Affairs Review, 22 February 2013, 
http://foreignaffairsreview.co.uk/2013/02/diplomacy-scotland/ 
7  
Innovation Norway, Norway: the Official Site to the UK, www.norway.org.uk/aboutnorway/norway-in-uk/organisations/innovationtourism/ 
8  
List of Diplomatic Missions of the Slovak Republic, Ministry of Foreign and European Affairs of the Slovak Republic, 
www.mzv.sk/en/ministry/slovak_diplomatic_missions-diplomatic_missions 
9  
Statistics Office of Slovakia 
10   National Bank of Slovakia 
11   Diplomatic Missions, Ministry of Foreign Affairs of Finland, http://formin.finland.fi/public/default.aspx?nodeid=15203&contentlan=2&culture=en-US 
12   Team Finland, Ministry of Foreign Affairs of Finland, http://formin.finland.fi/public/default.aspx?contentid=268840&contentlan=2&culture=en-US 
13   Irish Embassies and Consulates Abroad, Department of Foreign Affairs Ireland, www.dfa.ie/home/index.aspx?id=285 
A
14   FAQ, IDA Irelandwww.idaireland.us/help/ About Us: Our locations, Enterprise Ireland, www.enterprise-ireland.com/en/About-Us/Our-Locations/ 
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15   Diplomatic Missions and Consulate Offices of Croatia, Republic of Croatia Ministry of Foreign and European Affairs, www.mvep.hr/en/diplomatic-directory/diplomatic-missions-and-consular-offices-of-croatia/ 
x D
16   Croatia Trade, Exports and Import, Economy Watch, 15 March 2010, www.economywatch.com/world_economy/croatia/export-import.html 
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17   About Us, Agency for Investment and Competivenesswww.aik-invest.hr/en/about-us/ 
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