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How Britain and EU can settle Internal Market Bill dispute

BRUSSELS (Reuters) - Britain and the European Union are at odds over Britain’s Internal Market Bill, which violates the treaty on Britain’s withdrawal from the EU and could derail talks on a trade agreement.

FILE PHOTO: European Union and British flags flutter in front of a chancellery ahead of a visit of British Prime Minister Theresa May in Berlin, Germany, April 9, 2019. REUTERS/Hannibal Hanschke/File Photo

Below is the dispute settlement mechanism agreed in the treaty that the EU could use if London goes ahead with its bill. Under these rules, the earliest possible resolution of the dispute could come in the second half of 2021.

FIRST STEP - JOINT COMMITTEE

First, Britain and the EU have to try to resolve the problem in the Joint Committee -- a body of British and EU officials responsible for the implementation of the treaty -- on the basis of a written notice from the EU. The committee is co-chaired by European Commission Vice President Maros Sefcovic and Britain’s top minister overseeing Brexit, Michael Gove.

SECOND STEP - ARBITRATION PANEL

If the committee cannot find a solution within three months, the EU and Britain would set up an arbitration panel, composed of people from each side “whose independence is beyond doubt”. This would take another two weeks.

STEP THREE - RULING

The arbitration panel would normally have 12 months to come up with a ruling. If the panel decides the case is urgent, it would rule within six months. The ruling would be binding for Britain and the EU.

STEP FOUR - COMPLIANCE

If the arbitration panel found in favor of the EU, Britain would have a month to tell the 27-nation bloc when it would comply with the ruling within a “reasonable period of time”. If the EU were to think the proposed compliance time frame was too long, it could ask the arbitration panel to decide its length within 40 days and impose it on Britain.

Editing by John Chalmers and Timothy Heritage

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