EU eyes Brexit-deal 'kill switch' to enforce UK pledges

3 July 2017 10:26am

29 June 2017. By Matthew Holehouse and Simon Taylor.

UK's exit deal with the EU could contain a termination clause that would allow elements of the agreement to be suspended if the terms are breached, according to a position paper published today by the European Commission.

Alternatively, financial penalties could be imposed on the UK in the event of a dispute.

In case of a dispute, "the complaining party may seize the Court to request a lump sum or a penalty payment or the suspension of certain parts of the Withdrawal Agreements other than citizens' rights in order to ensure compliance with the ruling, after giving the other party the opportunity to express its position," the paper states.

The paper was was one of six discussed today by the EU's 27 remaining states that set out proposals in various areas on how to govern the UK's exit agreement from the bloc.

It proposes that any disputes relating to the application of citizens' rights, the status of goods on the market or ongoing EU processes should be referred to the EU Court of Justice. The UK would retain the same procedural rights enjoyed by EU states before the court.

Separately, a joint committee should be set up to monitor the exit deal and handle other disputes. If the committee cannot reach an agreement after three months, either party would be able to refer the case to the EU's highest court for a resolution.

Britain has said it won't accept the jurisdiction of the EU Court of Justice and insists on an alternative body to resolve disputes.

Contractual relationship

But the idea of a "kill switch" would address one of the objections held by UK Conservative lawmakers: the principle that EU law has supremacy over domestic law and confers rights on individuals that domestic courts are obliged to enforce.

Replacing this with a purely contractual relationship between the British government and EU institutions, backed up by termination clauses, would allow Prime Minister Theresa May's government to claim that the supremacy of the UK courts had been restored.

Linking various elements of the deal would also help address EU concerns, particularly in the field of citizens' rights, that the UK can't be trusted to uphold its obligations.

Such an arrangement would be similar to the bloc's series of linked sectoral deals with Switzerland. In 2014, the EU suspended participation in academic research after Switzerland failed to uphold its agreements on free movement of labor.

Provided the 27 member states don't object to the proposal within a week, it will be sent to the UK in the middle of next week as the EU's official negotiating position.

The next round of negotiations between Britain and the other 27 EU governments is set to take place on July 17. Those talks will deal with citizens' rights and may also address the UK's outstanding financial obligations to the bloc.

For more insight into this subject read our earlier story "UK's tax-haven brinkmanship could prompt EU kill-switch in Brexit deal".

Brexit Special Report