Thursday

19th Jul 2018

EU plans sanctions if UK violates Brexit transition deal

The EU plans to be able to sanction the UK if London violates the agreements reached on the transition period, according to a draft by the European Commission seen by EUobserver.

In the document the EU executive has set out the basics for the transition period after the UK leaves the EU on 29 March 2019 until 31 December 2020.

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It is the legal translation of the negotiating directives agreed by member states last week.

The draft transitional deal will be attached to the withdrawal agreement, that is being finalised by the EU Commission based on what was agreed with the UK last December.

'Mechanism'

The draft says that the withdrawal agreement "should provide for a mechanism allowing the Union to suspend certain benefits deriving for the United Kingdom from participation in the internal market where it considers that referring the matter to the Court of Justice of the European Union would not bring in appropriate time the necessary remedies."

Court actions could take years, while the transition period would last 21 months.

While the EU is looking for guarantees to make sure the UK follows the agreement during the transition period, this could upset the fragile negotiations as British prime minister Theresa May is struggling to keep her party united over Brexit.

The draft also warns the UK to "abstain, during the transition period, from any action or initiative which is likely to be prejudicial to the Union's interests".

In line with what EU countries have agreed to, the draft says that during the transition period all EU institutions will retain their power in relation to the UK, the Court of Justice of the EU as well.

The UK however will not participate in any EU institutions or bodies during the transition period, except only on a "case-by-case basis, exceptionally" attend meetings without voting rights, when the EU sees it fit.

This is key as London seeks guarantees to be able to check and reject new EU rules that it had no say in, which the EU has so far dismissed.

The EU and the UK shall however cooperate on sanctions and fisheries policies.

The draft legal transition text is subject to negotiations with the UK.

'Voice heard'

British prime minister Theresa May aims to close the deal on transition by the EU leaders' summit on 22-23 March.

On the summit, leaders are expected to agree on the guidelines for the second phase of negotiations on the future relationship.

So-called Brexiteers have resented the notion of the UK being unable to influence laws that it might be obliged to implement during the transition period.

Brexit minister David Davis last month said that it is unlikely that the UK would be forced to implement new EU rules that it could not influence as "it usually takes around two full years for major legislation to make its way through the European Union system".

"But we will still make our voice heard," Davis stated.

The issue has caused a row within May's Conservative Party, making any room for compromise for her more difficult.

Peter Ptassek, Germany's Brexit coordinator described the draft as "straightforward". He added in a tweet: "Not so much time left to get a deal on this in March.

There is no mention of citizens' rights in the draft specifically. While the EU argues it is a given that the rights of EU nationals should be respected during the transition period the same way as if the UK were still a member, London disputes that.

EU countries last week set out that "provisions of the citizens' rights part of the withdrawal agreement should apply as from the end of the transition period".

This means the bloc wanted EU nationals in the UK to be treated the same until the end of the transition period, which the UK has opposed, arguing for a different set of rights for those who arrive after the UK leaves the EU in 2019.

EU draws red line on UK customs deal

Britain cannot keep its EU trade perks if it quits the customs union, the European Commission has warned as Brexit talks resume.

Analysis

The next hurdles in Brexit talks

As EU-27 came up with its positions for the transition period, and there are plenty of political landmines left for the talks. Here is a look at what could upset the Brexit negotiations.

EU to open way for Brexit transition talks

The UK will become a "rule-taker" during the transition period that ends on 31 December 2020 – that is the mandate EU ministers will give to EU Brexit negotiator Michel Barnier next week.

UK slams EU's 'bad faith' on Brexit transition

Brexit secretary David Davis complained that releasing a document proposing sanctions if the UK did not respect the deal with the EU was "discourteous", in the most bad-tempered exchange of words so far between London and Brussels.

Barnier warns UK Brexit transition period 'not a given'

After one of the tensest week so far in Brexit talks, 'substantial' disagreements remain between the UK and the EU over transition, with Michel Barnier insisting London needs to decide on the future relationship and Ireland for Brexit to happen.

EU stays calm as two top UK ministers quit

EU officials said Brexit negotiations will not be affected by the resignations of the foreign secretary and Brexit secretary. European Council president Tusk noted that "unfortunately the idea of Brexit hasn't left" with David Davis or Boris Johnson.

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