EU launches legal case against UK over Internal Market Bill

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BRUSSELS (Reuters) - The European Union on Thursday launched legal action against Britain’s new Internal Market Bill on the grounds that it undercuts London’s earlier legal commitments under its Brexit divorce treaty, the head of the bloc’s executive said.

Such so-called infringements could lead to hefty fines being imposed by the EU’s top court but that takes years, leaving plenty of time for the UK to change tack.

London now has one month now to reply to a formal letter of complaint from the Commission, which will then assess whether the answer is satisfactory and can then request that the UK falls back in line. If that fails, it can sue at the Luxembourg-based European Court of Justice.

The move comes as British and EU negotiators struggle to close the gap on state aid in parallel trade negotiations that have been overshadowed by the new controversy over the Internal Market Bill.

Responding to the EU’s legal case, Britain said it had “clearly set out reasons” to change its Brexit treaty provisions on the sensitive Irish border under the new Internal Market Bill.

“We need to create a legal safety net to protect the integrity of the UK’s internal market, ensure ministers can always deliver on their obligations to Northern Ireland and protect the gains from the peace process,” a British government spokesman said.

Reporting by Marine Strauss, Writing by Gabriela Baczynska; editing by Philippa Fletcher