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EU threatens fines or trade sanctions if UK reneges on Brexit deal

U.K. Chancellor Sajid Javid has said that the country will not align with EU rules post Brexit | Peter Summers/Getty Images

EU threatens fines or trade sanctions if UK reneges on Brexit deal

UK Chancellor Sajid Javid said over the weekend that ‘there will be no alignment’ with EU rules post-Brexit.

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Brussels plans to impose fines or even suspend trade benefits if the U.K. does not comply with the terms of a planned post-Brexit deal, the European Commission said Monday.

A presentation shared with EU diplomats says that the bloc wants its future relations agreement with Britain to be governed by “efficient and effective arrangements for management, supervision, implementation and review” of the deal’s clauses.

The push for robust enforcement comes as the EU insists on the need to accompany the deal with a strong level playing field, meaning the adherence to the bloc’s environmental, social and competition rules. Brussels has also noted with concern that U.K. Chancellor Sajid Javid said over the weekend that “there will be no alignment” with EU rules post Brexit.

A graphic obtained by POLITICO shows that the Commission wants to discourage the U.K. from violating the rules of a future deal by establishing a joint committee that seeks to solve disputes via consultations, or starts legal proceedings if mediation is unsuccessful.

In the latter case, an arbitration panel would assess whether the issue relates to EU law, and in such a case send it to the Court of Justice of the EU in Luxembourg for a “binding ruling,” or alternatively rule itself on the dispute.

To ensure compliance with the rulings, the arbitration panel would give the infringing party a “reasonable period” to fix violations. If no action is taken, the panel “can impose a lump sum or penalty payment.”

As an ultimate step, if the infringing part “does not pay within 1 month or pays but still fails to comply after 6 months,” the complainant would be allowed to impose sanctions. This could be suspending “any provisions” of the Brexit Withdrawal Agreement other than part two, which refers to citizen rights, or suspending “parts of any other EU-U.K. agreement,” meaning for example tariff reductions or other benefits granted under a future deal.

Authors:
Hans von der Burchard 

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