EU looking at sanctions if UK breaks rules during transition

EU states would be entitled to impose sanctions on the UK if it breaches internal market and other EU rules during its transition from membership, a draft treaty provision from the commission's Brexit task force has suggested.

The commission yesterday published a legal version of the transition guidelines proposed by ministers of the 27 which will be incorporated, subject to agreement with the UK, into the withdrawal agreement currently being prepared to give effect to the phase-one deal agreed in December.

Much of the work on the rest of the withdrawal agreement is under way, although there are understood to be difficulties in phrasing the wording of the commitment given by the UK on the absence of a physical border in Ireland.

The legal text published yesterday reflects closely the ministerial guidelines on the shape of transition. The UK, having left the EU formally at the end of next March, will preserve both the rights and obligations of membership for the duration of transition – 27 months – but will not have a seat at the many EU decision-making tables.

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Have no say

In response to British concerns that they will have no say over legislation and regulations that they will be required to adhere to, the task force proposes a form of limited consultation – they “may, upon invitation and on an case-by-case basis, exceptionally attend meetings or parts of meetings”.

The draft would allow the UK to negotiate trade agreements with third countries but these may not come into force until the end of transition unless specifically authorised. This will allow the UK to negotiate with each of the countries with which the EU has trade agreements to seek continued recognition of the UK as an EU member during the transition.

"During the transition period, the United Kingdom may not become bound by international agreements entered into in its own capacity in the areas of exclusive competence of the union, unless authorised to do so by the union," the draft proposes.

Bound by obligations

The UK will also be bound by obligations stemming from the international agreements concluded by the union and will be obliged to accept constraints on its international diplomatic stance – in effect to act as a team player in bodies like the security council in reflecting common EU positions.

“In accordance with the principle of sincere co-operation,” the draft says, “the United Kingdom shall abstain, during the transition period, from any action or initiative which is likely to be prejudicial to the union’s interests in the framework of any international organisation, agency, conference or forum of which the United Kingdom is a party in its own right”

Concerned that the European Court of Justice may not be able effectively to enforce internal market rules on the UK, the draft unusually provides for ministers to be able to apply sanctions on the UK over breaches – “a mechanism allowing the union to suspend certain benefits deriving for the UK 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.”