Brussels launches legal action against UK over Brexit deal breach

Brussels launches legal action against UK over Brexit deal breach

Brussels is suing the UK over plans to violate last year’s Brexit withdrawal agreement, which could lead to Britain being hauled before the European Court of Justice.

Ursula von der Leyen, the European Commission president, said that Brussels had sent a “letter of formal notice” to the UK over Prime Minister Boris Johnson’s “internal market bill”. The letter is the first stage of formal EU “infringement proceedings”.

The commission decided to act even though the UK bill is not yet law because it believes Mr Johnson has breached “good faith” provisions in last year’s treaty by even tabling the draft legislation. 

“This draft bill is by its very nature a breach of the obligation of good faith laid down in the withdrawal agreement, moreover, if adopted as is, it will be in full contradiction to the protocol on Ireland/Northern Ireland,” said Ms von der Leyen. She said that Britain had one month to send its observations before Brussels escalates the process.

Brussels moved to act after the UK government ignored an end of September deadline issued by the EU for the offending articles of the bill to be removed. With that deadline having passed at midnight, Brussels has taken the earliest possible opportunity to launch legal action, arguing that the integrity of last year’s deal is at stake. 

Under the terms of last year’s deal, the commission can still initiate such infringement proceedings even though Britain has left the EU.

The British government’s bill would allow the UK to override crucial parts of the delicate compromise that Mr Johnson and the EU negotiated last year on Northern Ireland — notably on sensitive points around state aid and export documentation.

Brussels has insisted, since news of the bill first broke in September, that the measures must be scrapped. But UK cabinet office minister Michael Gove told the commission on Monday that Britain would not back down. 

“The deadline lapsed yesterday, the problematic provisions have not been removed,” Ms von der Leyen said. “The commission will continue to work hard towards a full and timely implementation” of last year’s deal, she said. “We stand by our commitments.”

A UK government spokesperson said: “We will respond to the letter in due course.”

“We have clearly set out our reasons for introducing the measures related to the Northern Ireland protocol,” the spokesperson added. “We need to create a legal safety net to protect the integrity of the UK’s internal market.”

UK officials played down the significance of the legal move and its likely impact on negotiations. “They are always infracting someone,” said one, adding that the timetable for the legal action was the most important thing.

The dispute over the bill is playing out in parallel to the continuing EU-UK trade negotiations. David Frost, the UK’s chief negotiator, is in Brussels this week for the ninth negotiating round with his EU counterpart Michel Barnier. 

Britain has said that the bill is a safeguard to mitigate unacceptable consequences on trade between Northern Ireland and Great Britain should the EU-UK future-relationship talks fail, meaning the two issues are now fundamentally linked. 

Senior EU officials are clear that any EU-UK trade agreement will not be ratified by the European Parliament this December unless the UK drops the offending clauses from the internal market bill that legally overwrite the obligations to implement the protocol on Northern Ireland.

While putting a marker down by launching infringement proceedings, officials are also clear that reaching agreement on a “zero tariff, zero quota” trade deal would address British concerns that the protocol on Northern Ireland — which requires the region to follow EU trade rules on goods — impinges too far on British sovereignty.

Despite the start of legal proceedings, negotiations are continuing to resolve differences on the implementation of the protocol, including a requirement — which the British side rejects — for Northern Ireland businesses to fill out customs forms when sending goods from the region into mainland Britain.

A ‘zero tariff’ trade deal would also remove the need for tariffs to be paid on goods entering Northern Ireland from Britain. A deal on state aid as part of an EU-UK free trade agreement could help address UK government fears that the Irish protocol might be used as a back door for Brussels to continue to dictate UK state aid policy after Brexit.

“In the end, if there is a deal on the trade talks there will have to be a ‘grand bargain’, where the UK drops the offending clauses of the internal market bill if it wants the deal to be ratified on the EU side,” said a senior EU diplomat with knowledge of EU thinking.

Trade talks in Brussels will conclude on Friday morning. At stake is whether enough progress can be made on sticking points such as fishing rights and rules on state subsidies to justify shifting into intensified “submarine” negotiations.