UK has already breached withdrawal agreement, EU lawyers say

UK has already breached withdrawal agreement, EU lawyers say

Leaked legal opinion says bloc already has grounds to take ‘legal remedies’ that could lead to financial and trade sanctions.

Britain has already breached the withdrawal agreement by tabling the internal market bill, prompting Brussels to plan legal action that could lead to financial and trade sanctions, according to a leaked EU legal opinion.

The European commission believes Boris Johnson’s government breached the terms of the treaty just by taking the first steps to pass a new law that would negate key parts of the agreement signed last year.

“Already by tabling the draft bill and pursuing the policy expressed therein, the UK government is in violation of the good faith obligation under the withdrawal agreement (article 5) because this bill jeopardises the attainment of the objectives of the agreement”, the commission lawyers write.

The commission has advised the 27 EU capitals that there are therefore grounds for the bloc to take “legal remedies” through the European court of Justice before the end of the transition period, leading to significant fines or potential trade sanctions.

The legal opinion goes on to say that should the legislation actually be adopted it would be in “clear breach of substantive provisions of the protocol” in waiving any export procedures or formalities on the trade of goods from Northern Ireland to Great Britain and in restricting the application of EU state-aid rules in the case of Northern Ireland.

“Once the bill is adopted (as proposed), the commission may initiate infringement proceedings against the UK for breach of the good faith obligations,” the EU lawyers write. “Even before the bill is adopted, it could be defendable to bring infringement proceedings on the same grounds.”

The lawyers add: “Given the length of the pre-litigation phase, it is unlikely that the case against the UK can be brought to the court before the end of the year.

“However, infringement procedures for facts occurred before the end of the transition period can be brought to the court during four years after the end of the transition.”

The paper says the EU court has the potential to “impose a lump sum or penalty payment” on the UK, or Brussels could use the dispute settlement mechanism under the withdrawal agreement, “which may ultimately also result in the imposition of financial sanctions by the arbitration panel”.

“In case of non-payment or persisting non-compliance, the complaining party is entitled to suspend its obligations arising from the withdrawal agreement (with the significant exception of the provisions relating to citizens) or from the future EU/UK agreement,” the lawyers write.

The development comes as one of the European commission’s top officials arrived in London for an emergency talks with the chancellor of the Duchy of Lancaster, Michael Gove.

The two spoke on Wednesday night by phone but Maroš Šefčovič had asked for Thursday’s urgent meeting for a “face to face” explanation for the government’s proposal to breach international law and “disapply” some of the Northern Ireland Brexit arrangements in the event of no trade deal.

Brexit talks had resumed on Tuesday but nosedived after it emerged that the UK was planning to row back on some of the Northern Ireland protocol through a section inserted into the internal market bill published on Wednesday.

Gove and Šefčovič will meet privately before a full extraordinary meeting of the EU-UK joint committee, which they both chair, which was set up to implement the withdrawal agreement in all its parts including the Northern Ireland protocol.

Brussels has accused Boris Johnson of deliberately endangering the talks with unconfirmed reports circulating in Westminster that the UK is prepared to walk away sooner rather than later.

Šefčovič told reporters on Wednesday night the UK was aware that a lack of respect for the withdrawal agreement would have consequences and said that trust in the UK was a prerequisite for talks continuing.

“For us this is of course a matter of principle,” he said.

The Irish prime minister, Micheál Martin, said there were now “justifiable doubts” as to whether the UK wanted to conclude trade negotiations at all.

On Sunday Johnson said that if there was no deal by 15 October then both sides should “accept that and move on”.

It is understood that chief negotiator David Frost has told colleagues the best possible scenario is a low grade deal, suggesting that no deal is, by comparison, not such an unpalatable option.

He said that the UK would then trade with the EU like Australia, which does not have a deal with the bloc, describing that as “a good outcome for the UK”.

Brussels is now alive to the notion that the internal market bill, which the Northern Ireland secretary, Brandon Lewis, admitted would breach the law, was designed to collapse the talks.

“Our colleagues in Europe, in particular those conducting the negotiations, are now wondering whether the will is there or not to arrive at a conclusion and get an agreement – and that is a very serious issue,” Martin told the Financial Times in Dublin.

Adding to the tension, sources said the European commission had been entirely blindsided by the internal market bill with no notice provided of the changes the government was looking to make to the withdrawal agreement.

The British attitude to the issues of state aid notifications and export declarations had been a concern to EU representatives sitting on the joint committee, according to sources in Brussels. But there had been no indication of the scale of the changes the UK would seek to make.

One senior EU diplomat said: “In four years of negotiations this is the absolute low. They could at least have tried to fudge it.

“UK ministers are getting the powers to overrule not only international but also national law? By now we’re well used to seeing this in other parts of the world but Britain?

“We still strive to come to an agreement within the limited time that remains as the basis for future relations. The importance of a functioning governance clause has only increased after the last couple of days.”

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