EU may take legal action against UK over new Brexit law - sources

By Gabriela Baczynska

BRUSSELS (Reuters) - The European Union could take legal action under its divorce treaty with Britain if emergency talks on Thursday do not reassure Brussels sufficiently that a proposed new British law will not break previously agreed commitments.

The two sides will hold the emergency talks at 1200 GMT on Thursday over Prime Minister Boris Johnson's plan to undercut parts of the Brexit divorce treaty, a step Brussels has warned could scupper any chance of a trade deal.

"First there is the Joint Committee. If it's short on the necessary clarifications, the dispute settling mechanism under the Withdrawal Agreement is there," said an EU diplomat dealing with Brexit.

Two other EU officials also involved in the talks said the bloc's executive European Commission would analyse the UK's new Internal Market Bill once it is passed to take into account any amendments before making a final decision on the legal case.

Under the divorce treaty, the EU would need to hand in a written notice to the Joint Committee - a body tasked with implementing the separation agreement - and then has three months to request setting up an arbitration panel on the case.

That means the legal case would bring no swift solutions.

"We are that boring and law-abiding. That's the rule of law for you," said one of the EU officials, speaking under condition of anonymity. "Obviously, that would also overshadow the trade negotiations. But that's a separate track."

The person said Britain's new legislation, the Internal Market Bill, would in its current form damage EU trust in negotiations with London.

"It's quite a warning on what you get when you deal with a government that is comfortable playing fast and loose with the law," they said.

(Reporting by Gabriela Baczynska, Additional reporting by Jan Strupczewski, Editing by Gareth Jones)