Commission: letter of formal notice sent to UK re the internal market bill and the withdrawal agreement. Invites the UK to reply within a month.

An explanation of the legal process - thread

The Commission is using the infringement procedure, which applies if Member States allegedly breach EU law. It applies to UK too for now, due to Art 131 of the withdrawal agreement, which gives CJEU its usual jurisdiction during the transition period, including over the agreement

Starting the infringement process doesn't establish by itself that UK has broken the law. It contains several pre-litigation phases. After the one month expires, the next phase is a reasoned opinion to the UK. Usually two months to reply to that, but the Commission can shorten.

After that deadline expires, Commission can go to CJEU and ask for a ruling on the point. The legal position is assessed as of the deadline to reply to the reasoned opinion. Commission can ask for interim measures - ie an order for UK to not pass/suspend parts of the law.

The Commission can also ask the CJEU to fast track its case, so to decide in a few months rather than the usual 12-18 months. Art 86 of the withdrawal agreement says that the case will not 'time out' due to the end of the transition period.

*IF* the Court rules in the Commission's favour it's binding on the UK at international level. But the bill, if passed, purports to block any impact of CJEU rulings at domestic level. Someone might try to litigate in UK courts on that.

If the UK ignores the Court's ruling the usual process is to go back to the CJEU and ask it to impose fines. But it's not clear if the withdrawal agreement allows for this route post-transition period. Instead Commission could use arbitration under the withdrawal agreement.

If an arbitration ruling goes against the UK, and is ignored by the end of the period to comply with it, then fines or suspension of part of the agreement (not the citizens' rights part) could result.

But ultimately this may be political theatre on the EU side, to match the UK. There are lots of 'off ramps' in an infringement proceeding - most of these cases are settled before they ever reach the CJEU. Possible for case to be dropped if the bill is amended as part of a deal.

For more on dispute settlement on the withdrawal agreement, see my blog post - http://eulawanalysis.blogspot.com/2020/02/how-do-you-solve-problem-like-suella.html

or section 11 of this working paper - https://twitter.com/StevePeers/status/1310519596148031488?s=20

There might also be a political impact, ie no trade talks (but note the EU has not left the talks) or no ratification, or no unilateral measures such as on data protection or financial equivalence.

nb if Brexit bros say this must go to an international court - Art 168 of the withdrawal agreement says that the dispute settlement rules in the agreement are exclusive, ie no other process can be used.

Here's the Commission's press release re infringement proceedings against the UK - https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1798

And the statement by Commission president von der Leyen: https://ec.europa.eu/commission/presscorner/detail/en/statement_20_1800