European Union launches legal action against UK over controversial Internal Market Bill

The European Union announced Thursday that it is launching legal action against Britain over its plans to pass trade legislation that would constitute a “breach of the obligation of good faith laid down in the Withdrawal Agreement” hashed out between the two sides last year.

The United Kingdom was a member of the bloc until Jan. 31. Both sides are now trying to forge a rudimentary free trade agreement before a Brexit transition period expires at the end of 2020, yet the fight over the controversial Internal Market bill has soured relations. The bill would give the British government the power to override the EU's agreed role in oversight of trade between Northern Ireland -- which shares a border with EU member Republic of Ireland -- and the rest of the U.K.

European Commission President Ursula von der Leyen said Thursday that the British plan "by its very nature is a breach of the obligation of good faith laid down in the Withdrawal Agreement."

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"If adopted as is, it will be in full contradiction to the protocol of Ireland-Northern Ireland" in the withdrawal agreement, she said.

EU leaders fear that if the U.K. bill becomes law, it could lead to the reimposition of a hard land border between Northern Ireland and Ireland, and erode the stability that has underpinned peace since the 1998 Good Friday accord.

The withdrawal agreement meant there would be some E.U. regulations and checks for goods going to and from the rest of the U.K. from Northern Ireland. The new Internal Market Bill would allow the U.K. government to overwrite those rules if there was no free trade deal.

The bill outlines a “safety net” of rules for trade between England, Scotland, Wales, and Northern Ireland to prevent disruption to the internal U.K. market in the event that the U.K. and the EU do not reach an agreement by the end of the year. It proposes no new checks on goods moving from Northern Ireland to the rest of the U.K. and gives U.K. ministers the powers to “disapply” rules relating to the movement of goods that will come into effect Jan. 1, 2021, if a Brexit deal fails, according to the BBC.

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The EU had given London until Wednesday to withdraw the bill, but U.K. lawmakers voted 340-256 Tuesday to push the legislation past its last major hurdle in the House of Commons.

“The problematic provisions haven't been removed,” Von der Leyen, who leads the EU’s executive arm, said Thursday. “Therefore, this morning, the commission has decided to send a letter of formal notice to the U.K. government,” which signals the start of a protracted legal battle.

“The commission will continue to work hard towards a full and timely implementation of the Withdrawal Agreement," she said. "We stand by our commitment.”

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The U.K. government says it respects the Good Friday peace accord and the Brexit withdrawal agreement but wants the law in case the EU makes unreasonable demands after Brexit that could impede trade between Northern Ireland and the rest of the U.K.

"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 government spokesperson said, according to Sky News.

Fox News’ Danielle Wallace, Adam Shaw, and the Associated Press contributed to this report.