EU Wants Fines to Enforce Post-Brexit Deal With U.K.

(Bloomberg) --

The European Union wants any agreement with the U.K. on post-Brexit relations to include possible fines for violations of the pact, a new document shows.

The European Commission proposed that future disputes between the EU and Britain be resolved through an arbitration panel with the authority to impose a “lump sum” or “penalty payment” on an infringing party, according to the document discussed on Monday in Brussels and seen by Bloomberg News.

The side found to be in breach of the deal would have a “reasonable period” to comply with the panel ruling or face the fine threat, according the paper. Should the infringing party fail to pay the sum within a month or make the payment while remaining in violation after six months, the other side could suspend parts of the agreement.

The document, which takes the form of a slide presentation, highlights the importance the U.K.’s 27 EU partners attach to enforcing any post-Brexit accord with Britain on everything from financial services to data protection. The U.K. is due to leave the EU by Jan. 31.

The commission, the EU’s executive arm, is preparing to negotiate a post-Brexit accord with Britain that would take effect after a transition period of at least 11 months during which the economic status quo will be maintained. EU governments aim to approve the mandate on Feb. 25.

British Prime Minister Boris Johnson has irked EU capitals by vowing to reject any extension of the transition period beyond 2020 and to break free of the bloc’s regulatory rulebook.

The commission document discussed on Monday covers “governance” issues related to any agreement on the future EU-U.K. relationship. The paper says the “depth and content” of the post-Brexit partnership “will determine the need for and nature of effective monitoring and compliance mechanisms.”

©2020 Bloomberg L.P.

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