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Beyond the Brexit sound and fury, a legal quagmire awaits

LONDON — Boris Johnson has made his move on Brexit. Does Brussels have the legal firepower to make him think again?

After presenting the controversial Northern Ireland Protocol Bill in the U.K. parliament Monday, Britain is about to be dragged into a long and messy legal maze.

Brussels has two legal tools it hopes could push the U.K. back into compliance: the infringement proceedings used by the European Commission against errant EU member states, and the dispute resolution mechanism built into the Brexit divorce bill.

The Commission is expected to announce some form of legal action against the U.K. as early as Wednesday morning. It will also publish a raft of papers insisting the EU’s own proposed fix for the protocol — first raised last October, but rejected out of hand by Downing Street — remains viable.

“The idea is to counter the British argument that they did not have any other option but legislating,” an EU official said.

Brussels must decide whether to launch fresh legal action against Britain, or simply to unfreeze an existing lawsuit launched — but then paused — last year over Britain’s unilateral extension of grace periods in Northern Ireland.

Fresh lawsuits could focus on the U.K.’s refusal to carry out food safety checks at Northern Irish ports on goods entering from Great Britain, and on an alleged breach of both sides’ legal duty to act “in good faith,” an EU official said.

Option 1: Infringement proceedings

Infringement proceedings are designed to encourage a member country to return to compliance with EU rules. But with Britain no longer part of the bloc, there’s little hope in Brussels this route would work.

The EU wants, nonetheless, to be seen to have exhausted all possible avenues before any further escalation. Pursuing this formal legal action offers Brussels some protection from potential lawsuits brought forward by businesses angry the rules were not being implemented.

“We must protect our position,” an EU official said. “If there’s a serious problem, we can be held to account.”

Infringement proceedings would require months of formal talks and deliberation, leaving any prospect for further escalation on the EU side — likely some form of trade retaliation — until 2023 at the earliest. Some in Brussels see an upside to a delay, believing the current political turbulence in Britain may ultimately lead to a change in leader.

Aat the end of the infringement process, Brussels could refer the case to the Court of Justice of the EU. The CJEU would then have up to 18 months to issue its ruling, with EU officials confident the court would find Britain in breach of its obligations.

Option 2: Dispute settlement mechanism

This second legal avenue was written into the Brexit divorce bill to help both sides iron out any differences over their interpretation of agreed rules.

Brussels has already triggered the mechanism twice since Britain left the EU, over the presentation of the U.K. Internal Market Bill — which allowed ministers to disapply parts of the protocol — and after Britain’s unilateral extension of grace periods to avoid implementing all checks at Northern Irish ports.

The mechanism would offer both sides the chance to take the dispute to the EU-U.K. Joint Committee, a body set up to supervise the implementation of the Brexit divorce deal.

If after three months of discussion there was still no agreed solution, either side could request the creation of an arbitration panel, formed by five members picked from lists of candidates already drawn by the U.K. and the EU.

The panel would agree a way to break the impasse, and notify its decision to the EU and Britain within six to 12 months.

Under the Brexit divorce deal, the panel’s decision would be binding on both sides. If Britain refuses to comply, the Commission could put on ice parts of the Trade and Cooperation Agreement, or go nuclear and suspend it in full — opening the door for tariffs against the U.K.

Beyond the courts

The U.K. government could, of course, simply ignore the EU’s legal action if its Northern Ireland Protocol Bill becomes law — but that wouldn’t help it avoid a trade war in the aftermath.

The bill would give U.K. ministers the power to switch off — in domestic law, at least — the provisions in the Brexit divorce deal regulating both possible avenues for legal action, giving London the freedom to waive away any pesky notice from the arbitration panel or the CJEU.

But the Commission would then feel empowered to hit British exports with swingeing trade tariffs, and freeze cooperation with the U.K. in other areas — and it is not short of ideas. Access to financial and tech markets, agreements on data flows and even deals on crime and security could be suspended.

Britain’s great gamble is the EU would never take such a mutually damaging step, with citizens on both sides already struggling with the soaring cost of living and with European unity crucial in the face of Russian aggression in Ukraine.

The EU, however, is already discussing how to simplify the requirements the Commission must meet in order to proceed with retaliation. But the EU official insisted Brussels has not yet started to define which British goods might be targeted.

“We’ve never wanted to act like [Donald] Trump,” they said, in reference to the former U.S. president’s retaliatory tariffs on British steel and aluminum exports.

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