Bloomberg | 11 March 2021

Here’s how EU could take brexit legal action against the UK

By Ian Wishart

The European Commission is preparing to take legal action against the British government in coming days over its failure to keep promises it made in the Brexit deal to keep the island of Ireland free of border checkpoints.

Here’s what what the EU is planning to do:

Start an ‘infringement’ case

Under the Northern Ireland Protocol, the U.K. remains subject to rulings by the European Court of Justice, so the commission can start an infringement procedure against Britain as if it were still a member of the bloc.

The process can take as long as three years, but can be sped up. After months of formal back and forth, the EU court can ultimately issue a ruling that would be binding on Britain. The ECJ could impose financial penalties on the U.K. if it ignores the decision.

It’s this route that the commission took in October 2020 when Britain’s proposed Internal Market bill looked like giving the government unilateral powers to suspend parts of the Protocol. This action was ended in December after the sides reached a compromise.

Invoke the dispute-resolution mechanism

The second course of action makes use of the dispute resolution mechanism in the Brexit deal. The EU would accuse the U.K. of not acting in “good faith” as the two sides committed to do in their agreements.

This again is a drawn-out process that eventually sees a five-member arbitration panel set up. The panel can take as long as a year to issue a binding ruling. Again, any questions of interpretation of EU law would be sent to the ECJ.

If the U.K. didn’t comply with the arbitration panel’s decision, a financial penalty could be imposed. And if that wasn’t paid, the EU could suspend parts of the Brexit divorce deal — as well as the trade deal signed in December. That could mean trade tariffs would be imposed.

In the meantime, the EU might face a dilemma in how it conducts checks on goods that could be moved into the single market via Northern Ireland.

Why has it come to this?

Under the Brexit deal, Northern Ireland stayed in the EU’s customs union and some of the single market. This prevented the need for border checks on the island of Ireland, which was a condition for a wider Brexit deal — but introduced them on goods coming into Northern Ireland from Great Britain.

It’s always been an uneasy compromise, disliked by the U.K. government and unionists in Northern Ireland.

Last month, the government said it would unilaterally waive customs paperwork on food entering Northern Ireland until October, beyond the April 1 deadline it had agreed. The EU said it was a violation of the treaty.