A British Union flag, also known as a Union Jack, right, flies with other European Union (EU) member state flags outside the European Parliament in Brussels, Belgium, on Thursday, Jan. 30, 2020.
LONDON — European Commission President Ursula von der Leyen said Thursday it has formally notified the U.K. over its contentious plan to override the Brexit divorce deal, marking the first step in legal proceedings.
The notification came after U.K. lawmakers approved Prime Minister Boris Johnson’s Internal Market Bill earlier this week, despite some ministers admitting the legislation could lead to the country breaching international law.
The U.K. has said the proposed legislation, which now requires the approval of the House of Lords, will protect the integrity of the U.K. The bill would allow ministers to unilaterally amend elements of the country’s withdrawal agreement with the EU.
It has amplified divisions between the U.K. and Europe, threatening to scupper trade talks during the post-Brexit transition period.
“If adopted as is, it will be in full contradiction to the protocol of Ireland-Northern Ireland,” von der Leyen said in a televised statement.
The head of the EU’s executive arm said it had given Britain until the end of September to remove “problematic parts” of the Internal Market Bill, but the deadline has now lapsed and the provisions remained.
“Therefore, this morning the Commission has decided to send a letter of formal notice to the U.K. government. This is the first step in an infringement procedure.”
The U.K. government will have a month to reply with its “observations,” von der Leyen said. “Besides this, the Commission will continue to work hard towards a full and timely implementation of the Withdrawal Agreement. We stand by our commitments.”
The EU has previously said the Internal Market Bill constituted an “extremely serious violation” of the Withdrawal Agreement. It has also warned it would “not be shy” in using all available legal means if the U.K. failed to amend the bill in its current form.
What is the Internal Market Bill?
The U.K.’s Internal Market Bill would grant the British government powers to not consult the EU in state aid cases involving the trade of goods between Northern Ireland and the rest of the EU. The U.K. had agreed to do the opposite when signing its divorce deal with the EU in January.
The bill would also potentially change requirements that Northern Irish firms complete export summary declarations when shipping goods to the mainland.
The dispute has prompted some analysts to suggest the U.K. and EU will ultimately fail to reach a trade agreement.
The absence of a deal before the end of the year would see the U.K. trade with the EU on World Trade Organization rules. This would mean higher costs and barriers for businesses on both sides of the English Channel, when compared with the current system.
— CNBC’s Silvia Amaro contributed to this report.