EU legal action against the UK

The EU has launched legal action against the UK, following the Government’s publication of its Northern Ireland Protocol Bill on 13 June.

The EU is considering new legislation which enables it to take “appropriate measures” to restrict cooperation with the UK if it does not cooperate with existing dispute settlement procedures.

This Insight explains the basis for the EU’s legal action, and what might happen next.

Why did the EU launch legal action?

The European Commission, the EU’s executive body, announced on 15 June it was re-commencing infringement proceedings against the UK for not complying with the Protocol on Ireland/Northern Ireland. The Commission said the Bill was a “clear breach of international law”.

The Protocol, part of the UK-EU Withdrawal Agreement that came into force when the UK left the EU, provides that various EU rules are applied in Northern Ireland  to prevent there being a hard border with Ireland. The Protocol gives EU institutions powers to enforce these rules in much the same way as they would if the UK was still a part of the EU.

The Northern Ireland Protocol Bill, introduced by the Government on 13 June, would empower ministers to disapply parts of the Protocol, and remove the jurisdiction of the Court of Justice of the EU (CJEU) in enforcing EU rules.

Alongside the legal action, the European Commission announced it was also launching two new infringement proceedings against the UK in relation to the Protocol. These were for 1) failing to carry out its obligations under the EU’s sanitary and phytosanitary (SPS) rules; 2) failing to provide the EU with trade statistics data for Northern Ireland, as required under the Protocol.

What is the EU infringement procedure?

Under the EU infringement procedure, if the Commission considers a Member State (or the UK in this case) has failed to implement an EU legal obligation then it may send a letter of formal notice to the state concerned requesting further information. The state is requested to send a detailed reply within a specified period. This first stage of the procedure was initiated by the EU in relation to the UK in March 2021.

In the second stage, if the Commission concludes from the information provided that the state is failing to fulfil its legal obligations under EU law, it may send a formal request to comply with EU law. The state concerned should then inform the Commission how it will comply, within a specified period, usually two months. If the state doesn’t comply, the Commission may decide to refer the matter to the CJEU.

The Commission said it was triggering this second stage against the UK on 15 June. It said if the UK Government did not reply within two months, it would consider taking the UK to the CJEU.

If the CJEU finds that a Member State has failed to fulfil an EU legal obligation, the state is then required to take necessary measures to comply with the court’s judgment. If the state does not comply with the judgment, then the Commission can ask the CJEU to impose a lump sum fine and/or ongoing penalty payment (calculated on the basis of a daily rate).

What happens next?

It’s possible the disagreement between the UK and EU may be resolved without the Commission taking the infringement procedure to its next stage. Commenting on the EU legal action on 15 June, Commission Vice-President Maroš Šefčovič said that EU’s “door remains open to dialogue” and that it wanted to discuss solutions with the UK Government. At the same time as launching the dispute, the Commission published further details of solutions it was proposing to address UK concerns on the Protocol.

The Northern Ireland Protocol Bill removes the jurisdiction of the CJEU over the Protocol. The Government may accordingly decide not to comply with CJEU decisions relating to infringement proceedings if it reaches this stage. Both the Bill and any CJEU case could take over a year to reach their final stage.

Other remedies?

The EU has also pointed to other possible remedies, including through the Trade and Cooperation Agreement (TCA), which governs ongoing UK-EU trade relations and other areas of cooperation.

When it initially launched infringement proceedings in March 2021, the EU warned it may also initiate the dispute settlement procedure established by the Withdrawal Agreement (WA). This provides for a period of consultation, followed by an independent arbitration process if the matter cannot be resolved. If questions of EU law are raised, the CJEU provides binding interpretations to the arbitration panel.

The WA and TCA provide for “cross-retaliation”, meaning if one party fails to comply with an arbitration panel decision under the WA, the other can retaliate by suspending parts of the TCA.

This could include provisions on tariff-free trade (meaning tariffs could be put on some goods) or cooperation on road transport, aviation and fisheries. However, the timelines for this are long. Consultations and arbitration under the WA together can take nine to fifteen months, and then there is another month to comply with the ruling.

If passed, the Northern Ireland Protocol Bill would mean the WA dispute settlement process would not apply to the parts of the Protocol that are no longer applied in UK law. The EU is considering new legislation for the implementation and enforcement of the two agreements. This allows the European Commission to adopt measures restricting trade, investment or other activities in the TCA if the UK is not cooperating with the dispute settlement process.

Could the EU retaliate in other ways?

Following publication of the Bill, Commission Vice-President Šefčovič said the EU “cannot exclude anything” if the Bill becomes law. Šefčovič also highlighted the conclusion of the Withdrawal Agreement was a “pre-condition” for the Trade and Cooperation Agreement being negotiated .

Terminating the TCA has been described as “nuclear option”. Either side can do this without a stated reason. This requires twelve months’ notice. Certain parts of the TCA can be terminated separately with nine months’ notice.

The EU has already responded to UK positioning on the Protocol by refusing to sign off on UK participation in EU programmes.

The EU and UK have also been negotiating an agreement on Gibraltar’s post-Brexit relationship with the EU. There are reports the EU may halt these talks in response to the UK’s plans on the Protocol.

Other possible EU measures that have been discussed include delaying further on measures giving UK financial services greater access to EU markets and reconsidering decisions allowing transfer of personal data between the EU and UK.

Further reading

For further discussion on possible EU reactions to unilateral UK actions in relation to the NI Protocol see Commons Library Briefing, Northern Ireland Protocol: Article 16

About the author: Stefano Fella is a researcher at the House of Commons Library, specialising in UK-EU relations, the EU and European countries.

Image: Berlaymont building by Eoghan OLionnain, under CC BY-SA 2.0

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