The EU is to launch legal action against the UK after the government made a unilateral decision to delay the implementation of parts of the special Brexit arrangements for Northern Ireland.
A letter notifying the British government of infringement proceedings is expected to be issued around midday on Monday.
While the EU’s chief Brexit negotiator, Maroš Šefčovič, signalled the action would be taken 10 days ago, the proceedings will be a marking of a formal dispute just two months after the UK sealed its Brexit trade deal and less than 14 months after the treaty was signed on the broader withdrawal agreement of which the Northern Ireland protocol is a part.
The EU has two legal avenues open to it, with the first to launch proceedings under the withdrawal agreement that would lead to a case in the European court of justice (ECJ). This would risk further damage to the fragile political relationships between the two sides, given the symbolism of the ECJ to Brexiters in the Tory party who fought for the fastest, hardest exit from the EU possible.
Sources in the EU confirmed that proceedings could also be launched under the dispute mechanisms in the trade and cooperation agreement sealed on Christmas Eve by Lord Frost, who negotiated the deal.
This would take the dispute to an arbitration panel that may result in a quicker and more politically motivated solution.
Disputes procedures brought under the trade deal can allow for retaliatory measures to be instigated by either side including restrictions on market access if either side continues to breach the deal.
Under this scenario the UK could face trade sanctions if it continued with its unilateral position after an arbitration panel decision in the EU’s favour.
The row was triggered one week after Frost took over from Michael Gove as the UK chair of the EU-UK joint committee charged with implementing and enforcing the withdrawal agreement.
His decision to unilaterally extend grace periods for checks on goods crossing the Irish Sea into Northern Ireland from March until October was immediately labelled a “violation” of the Northern Ireland protocol by Šefčovič.
The move came as a shock to the EU and to Irish political leaders as there had appeared to be progress on the row over checks on supermarket goods, parcels and plants, during a meeting of the joint committee led by Šefčovič and Gove the week before.