The document, which has been leaked in Brussels this morning, threatens the UK with an array of punishments up until the end of the transition period in December 2020.
The EU has proposed “suspending certain benefits” of EU membership from the UK during the transition period, including voting and veto rights.
All the while tariffs could be placed on UK goods and planes grounded due to suspension of aviation rights.
The draft says that the withdrawal agreement “should provide for a mechanism allowing the Union to suspend certain benefits deriving for the United Kingdom from participation in the internal market where it considers that referring the matter to the Court of Justice of the European Union would not bring in appropriate time the necessary remedies.”
Court actions could take years, while the transition period would last 21 months.
While the EU is looking for guarantees to make sure the UK follows the agreement during the transition period, this could upset the fragile negotiations as British prime minister Theresa May is struggling to keep her party united over Brexit.
The draft also warns the UK to “abstain, during the transition period, from any action or initiative which is likely to be prejudicial to the Union’s interests”.
In line with what EU countries have agreed to, the draft says that during the transition period all EU institutions will retain their power in relation to the UK, the Court of Justice of the EU as well.
The UK however will not participate in any EU institutions or bodies during the transition period, except only on a “case-by-case basis, exceptionally” attend meetings without voting rights, when the EU sees it fit.
THREAT: EU ‘to slap tariffs on UK goods, ground flights and suspend single market access if Britain doesn’t adhere to immigration ruled during transition’.
UK could also be denied veto on fishing quotas. Unacceptable.https://t.co/XQDEIu1qfJ
— Westmonster (@WestmonsterUK) 7 February 2018
This is key as London seeks guarantees to be able to check and reject new EU rules that it had no say in, which the EU has so far dismissed.
The EU and the UK shall however cooperate on sanctions and fisheries policies.
The draft legal transition text is subject to negotiations with the UK.