The European Union announced on Wednesday that it will relaunch legal action against the UK over a draft law London unveiled that would override parts of the Brexit treaty.
The Commission first began "an infringement procedure" against the UK in March 2021 but put it on hold in July that year to create space for more discussions over the key Brexit agreement which leaves Northern Ireland within the bloc's Single Market, creating a de-facto border in the Irish Sea.
The UK government, which negotiated and agreed to the agreement -- called the Northern Ireland Protocol -- is now saying it endangers the Good Friday Agreement which ended decades of bloody sectarian violence in Ireland.
They say that it is leading to political instability since Unionists, who want to retain strong links with Great Britain, are refusing to join a devolved government until their concerns over the Protocol are addressed.
The draft law unveiled on Monday afternoon by UK Foreign Secretary Liz Truss overrides parts of the agreement by creating so-called green and red channels to waive customs checks for goods travelling between Great Britain and Northern Ireland and are intended for the Northern Irish market only.
It also wants to "ensure Northern Ireland can benefit from the same tax breaks and spending policies as the rest of the UK, including VAT" and bypass the European Court of Justice in case of disputes and use "independent arbitration" instead.
The EU's Brexit negotiator, Maroš Šefčovič told reporters that "there is no legal nor political justification whatsoever for unilaterally changing an international agreement."
"Let's call a spade a spade: this is illegal," he said.
What is the EU doing?
The infringement procedure -- or legal action -- that the EU first launched last year and that it is now restarting is over the UK’s decision to unilaterally implement and then extend grace periods waving checks on sanitary and phytosanitary products such as agri-foods.
It is also now launching two new procedures related to the continued lack of infrastructure and staffing to carry out customs checks in the UK and on London's failure to share trading data as required under the Protocol.
The UK now has two months to answer the EU's concerns.
Failure to provide an answer or if Brussels deems that answer unsatisfactory would result in the European Commission referring the matter to the European Court of Justice.
This could see the UK fined by the EU's top court, stoking fears of a trade war.
"Despite today's legal action, our door remains open to dialogue. We want to discuss these solutions with the UK government," Šefčovič said during a press conference.
"Given that the UK hasn't sat down at the table with us since February, I think it's high time to show some political will to find joint solutions," he argued.
Where are the pressure points?
An EU official stressed that the bloc proposed an "express lane" in October 2021 to simplify and accelerate customs procedures for goods going to Northern Ireland, similar to the so-called "green lane" the UK now wants to introduce, although the EU rejects London's proposal because it would create a dual regulatory system.
The EU is also now fleshing out some of its proposals from October and says it is willing to "greatly expand" the scope of a Trusted Trader Scheme that would reduce checks and controls by more than 80% and cut paperwork by more than half. It would enable businesses to fill out a single three-page certificate for a truck filled with different goods.
The official also said that the UK's proposal does not provide enough safeguards for the protection of the Single Market because under "the model that the UK has in mind, the amount of data we would get is not sufficient for us to carry out risk assessments" necessary to determine whether goods could travel beyond Northern Ireland and into the Republic of Ireland.
"We don’t have the IT access that we were supposed to have for customs," a second EU official stressed. Under the Protocol, the UK was meant to start rolling out real-time data sharing with the EU during the transition period with the system expected to be fully up and running at the end of the transition but according to the official "we are still waiting for the UK to give us real-time IT access".
For the EU, the problem is real.
"There is smuggling going on for sure," the official emphasised with customs and police authorities having seized smartphones, cigarettes and medical products among others.
Finally, the EU official reiterated that the role of the ECJ is non-negotiable.
"The only court which is competent to rule on the interpretation of those laws, for the benefit of operators in the EU, as well as Northern Ireland, is the Court of Justice so removing the role of the ECJ is out of the question and, in fact, it will be found illegal by the court itself, so it is pointless to try," they said.
How has London reacted?
Downing Street said Prime Minister Boris Johnson was "disappointed the EU has taken this legal action today."
"The EU's proposed approach, which doesn't differ from what they have said previously, would increase burdens on business and citizens and take us backwards from where we are currently," Johnson's spokesman told reporters in comments reported by British media.
"It is difficult to see how scrapping grace periods and adding additional controls and checks would be the situation better," he added.
A UK Government spokesperson also described the move as "disappointing" describing the grace periods as "vital to stop the problems caused by the Protocol from getting worse."
"The UK’s preference remains for a negotiated solution but the proposals set out by the EU today are the same proposals we have been discussing for months and would not solve the problems – in many cases, they take us backwards from current arrangements."
"The EU continues to insist it is unwilling to change the Protocol itself, so we are obliged to act ourselves to change the parts of the Protocol that are causing problems," they argued.