Council response puts Brexit talks on collision course

Setting Brexit negotiations on an immediate collision course, the European Council said Friday it would insist on resolving the terms of the U.K.’s departure before discussing the country’s future relationship with the EU.

The Council’s position, laid out in draft negotiating guidelines obtained by POLITICO, flatly rebuffs a call by U.K. Prime Minister Theresa May in her official notification letter “to agree the terms of our future partnership alongside those of our withdrawal.”

May repeated that phrase four times in her six-page letter formally triggering Article 50 Wednesday, underscoring the importance that she places on implementing what she called a new “deep and special partnership” before the U.K. breaks free from the bloc.

Speaking to journalists in Valletta, Malta, European Council President Donald Tusk, who directed the development of the draft guidelines, made clear that he expected tough, complex negotiations and that his priority would be the citizens of Europe and EU countries – not the interests or demands of London.

“The United Kingdom is now on the other side of the negotiating table,” Tusk said, appearing at a news conference with Maltese Prime Minister Joseph Muscat.

“Once, and only once we have achieved sufficient progress on the withdrawal, can we discuss the framework for our future relationship,” Tusk said, adding that he aimed to conclude the first phase of the negotiations as foreseen by the EU, “probably in the autumn — at last I hope so.”

Council called for a strictly “phased” approach, in which talks on a future relationship would begin only when “sufficient progress” had been made on the divorce terms.

His host, Maltese Prime Minister Joseph Muscat, added that it was “exclusively” for EU leaders to define what constituted “sufficient progress”.

The Council document is the EU’s first effort at a formal response to May’s triggering of Article 50, which set in motion the two-year negotiating process. Distributed Friday morning to ambassadors for circulation in their home capitals, it lays out the EU’s broad principles as it enters negotiation with the U.K.

The guidelines are due to be approved by leaders of the remaining 27 EU countries at an extraordinary summit in Brussels on April 29 and will be followed by more detailed written directives for the EU’s chief negotiator, Michel Barnier and his team. At that point, the actual talks will be set to start. Read the full document here.

While the draft guidelines echoed May’s hope for a collegial negotiating process and agreement on an orderly departure, the Council also called for a strictly “phased” approach, in which talks on a future relationship would begin only when “sufficient progress” had been made on the divorce terms, including on such complicated issues as guarantees for citizens, the U.K.’s financial obligations and Ireland’s borders.

Britain's ambassador to the EU Tim Barrow, right, leaves after delivering British PM Theresa May's formal notice of the U.K.'s intention to leave the bloc to European Council President Donald Tusk in Brussels

Britain’s ambassador to the EU Tim Barrow, right, leaves after delivering British PM Theresa May’s formal notice of the U.K.’s intention to leave the bloc | Emmanuel Dunand/AFP via Getty Images

“The first phase of negotiations will aim to settle the disentanglement of the United Kingdom from the Union and from all the rights and obligations the United Kingdom derives from commitments undertaken as member state,” the Council wrote, and “provide as much clarity and legal certainty as possible to citizens, businesses, stakeholders and international partners on the immediate effects of the United Kingdom’s withdrawal from the Union.”

The Council noted that “an overall understanding on the framework for the future relationship could be identified during a second phase of the negotiations under Article 50m” but it also pointedly ruled out concluding any agreement on a future relationship until after the U.K. formally withdraws from the EU.

The guidelines left open the possibility of a transition period that might avoid a rapid and disruptive exit, but did not specifically endorse such a transition, which it said would have to be “clearly defined, limited in time, and subject to effective enforcement mechanisms.”

“We think it is important to insist on a phased approach,” said a senior EU official involved in drafting the guidelines. “We need to be able to establish as far as possible what will be the situation the day after Brexit before we start talking about the medium and long-term future.”

“We cannot smuggle the future relationship as such under Article 50. It is simply legally not possible” — Senior EU official

The draft guidelines are the first in a series of formal documents the Council will issue laying out its principles in the Brexit talks and giving specific directives to its negotiating team, and effectively provide the EU’s first formal response to May’s notification letter.

While the guidelines are subject to revision and must be approved by the EU’s 27 leaders at a summit meeting on April 29, officials stressed the draft was the result of nine months of close consultations between the EU institutions and the capitals. As a result, Council officials said, the overarching principles laid out in the draft guidelines are unlikely to change.

The senior EU official said the bloc’s chief negotiator, Michel Barnier, would be expected to return to the Council for clearance to move from one phase of negotiations to the next.

British Prime Minister Theresa May in the cabinet office signs the official letter to European Council President Donald Tusk invoking Article 50 and the United Kingdom's intention to leave the EU on March 28, 2017 in London

British PM Theresa May signs the official letter to EU Council President Donald Tusk invoking Article 50 on March 28 | Pool photo by Christopher Furlong/WPA via Getty

“Once sufficient progress in Phase One has been achieved and the European Council comes to this assessment that sufficient progress has been achieved, then we can move on,” the official said. “And that next phase, of course, will be about the future, about the framework for the future relationship, but again, we think we need to deal with first things first.”

But the official warned that legally there would be no way to seal a future agreement with the U.K., in part because any such deal would require the ratification by national parliaments of the 27 EU countries, a process that can take up to two years following the conclusion of an agreement.

“Article 50 is about what it says it is about, it’s about the arrangement for withdrawal, taking account of the framework for the future relationship. That’s what it’s about and that’s what we intend to do,” the official said. “But we cannot smuggle the future relationship as such under Article 50. It is simply legally not possible.”

Core principles

The Council’s guidelines are intended to articulate the core principles of EU leaders as they confront the first-ever departure of a member.

Chief among those principles is a balance of “rights and obligations” — an equation that EU officials said was made substantially simpler by the U.K.’s decision to leave the bloc’s single market and its customs union.

From virtually the moment the result of the U.K. referendum was clear, EU leaders had been resolute that the four freedoms that serve as pillars of the single market were non-negotiable. May’s decision to leave the single market and the customs union avoided a messy fight, particularly over the freedom of movement of citizens, which the U.K. had made clear it would no longer honor as it moves to tighten immigration controls.

The draft guidelines, however, state that if the U.K. wants a transition period that would extend its participation in the single market, the fundamental freedoms must be honored and “existing regulatory, budgetary, supervisory and enforcement instruments and structures” must continue to apply.

The Council expects Britain to live up to its responsibilities on “liabilities and contingent liabilities” without pegging any specific number.

After EU leaders approve the guidelines at a special summit in Brussels on April 29, the Council, based on recommendations from the European Commission, will develop far more detailed negotiating directives for Barnier and his team. Those directives are expected to be approved in late May. Once that occurs, the formal talks with the U.K. can begin.

In the draft guidelines, the Council took a broad but straightforward approach on many issues. On the question of how much Brexit will cost the U.K., the Council simply declared it expects Britain to live up to its responsibilities on “liabilities and contingent liabilities” without pegging any specific number.

“A single financial settlement should ensure that the Union and the United Kingdom both respect the obligations undertaken before the date of withdrawal,” the Council wrote in the draft. “The settlement should cover all legal and budgetary commitments as well as liabilities, including contingent liabilities.”

On citizens’ rights, the guidelines were slightly more expansive in calling for guaranteed protections for nationals of EU countries living in the U.K. and Britons living in EU countries.

“The right for every EU citizen, and of his or her family members, to live, to work or to study in any EU member state is a fundamental aspect of the European Union,” the Council wrote, adding: “Agreeing reciprocal guarantees to settle the status and situations at the date of withdrawal of EU and UK citizens, and their families, affected by the United Kingdom’s withdrawal from the Union will be a matter of priority for the negotiations. Such guarantees must be enforceable and non-discriminatory.”

Britain's ambassador to the EU Tim Barrow gives formal notice of the U.K.'s intention to leave the bloc to European Council President Donald Tusk

Britain’s ambassador to the EU Tim Barrow gives formal notice of the U.K.’s intention to leave the bloc to European Council President Donald Tusk | Yves Herman/aFP via Getty Images

Officials said the EU would seek new legal mechanisms in the U.K. so citizens can seek redress if they feel mistreated. “On the EU side, we have clear rules for that, we have complaints procedures, we have the Court of Justice,” an official said. “There needs to be also on the U.K. side some sort of  practical means of enforcing, in effect exercising your rights.”

In addition, the guidelines urge the protection of the autonomy of EU decision-making, essentially calling for the U.K. to commit to interfacing with Brussels and not trying to circumvent the EU in talks with individual members.

“The Union will act as one,” The council wrote. “It will be constructive throughout and will strive to find an agreement. This is in the best interest of both sides.”

And while the Council said it welcomed the U.K.’s desire for a strong future relationship, it warned that life for the U.K. would not be as good as being a member of the EU. “The European Council welcomes and shares the United Kingdom’s desire to establish a close partnership between the Union and the United Kingdom after its departure,” the Council wrote. “While a relationship between the Union and a non member state cannot offer the same benefits as Union membership, strong and constructive ties will remain in both sides’ interest and should encompass more than just trade.”

Reality sinking in

In discussing the guidelines, EU officials expressed some satisfaction that reality seemed to be taking hold in London.

“There will be a new legal border between the U.K. and the rest of us simply because the legal situation will be different on the two sides of that border,” a senior official said, adding, “That is simply inescapable. It is a mechanical consequence of the decision of the U.K. to leave the single market and the customs union and therefore there will also be a certain level of economic and other types of disruption.”

“We can and should … do what we can to reduce some of those consequences,” the official said. “But we cannot eliminate those consequences. There will be some disruption. And so far in the U.K. debate, it has often looked as if well nothing will change. There, I note, in the Theresa May letter she does start to prepare her home ground for the fact that this will have consequences.”

“In many ways this is an absurd tragedy in which all of us must play our predestined roles” — Senior EU official

But as officials in Brussels braced themselves for the tough negotiations ahead, there was also an overall tone of sorrow and regret. “In many ways this is an absurd tragedy,” the senior EU official said, “in which all of us must play our predestined roles.”

A spokesman for the U.K. government said: “These are draft guidelines and we look forward to beginning negotiations once they have been formally agreed by the 27 member states.”

“It is clear both sides wish to approach these talks constructively, and as the prime minister said this week, wish to ensure a deep and special partnership between the U.K. and the European Union.”

Grassley presses Justice Dept. on Russian ties to firm behind Trump dossier


Sen. Chuck Grassley demanded to know if the Justice Department is looking into Fusion GPS. | Getty

The Judiciary chairman asks how authorities are enforcing disclosure rules for foreign lobbying.

Senate Judiciary Chairman Chuck Grassley wants information on how a Washington opposition research firm was apparently involved in a pro-Russian lobbying campaign at the same time that it was overseeing the unverified dossier about the Trump campaign’s ties to Russia.

In a letter to Acting Deputy Attorney General Dana Boente, Grassley demanded to know if the Justice Department is looking into the firm, Fusion GPS, for alleged violations of the Foreign Agents Registration Act, known as FARA.

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Grassley’s letter cites earlier reporting by POLITICO connecting Fusion GPS to a mysterious lobbying effort last year that tried to derail a human rights sanctions bill that irked the Kremlin.

The lobbying campaign occurred at the same time that Fusion GPS reportedly hired a former British spy to gather intelligence on Russia’s efforts to tamper with the 2016 presidential election and develop contacts with then-candidate Donald Trump and his associates.

“The issue is of particular concern to the Committee given that when Fusion GPS reportedly was acting as an unregistered agent of Russian interests, it appears to have been simultaneously overseeing the creation of the unsubstantiated dossier of allegations of a conspiracy between the Trump campaign and the Russians,” Grassley said in the letter.

Fusion GPS said it was working for the law firm representing Prevezon in litigation and complied with disclosure rules.

“By the very nature of that work, Fusion GPS was working with a law firm to ensure compliance with the law,” the firm said in a statement. “Fusion GPS was not required to register under the Foreign Agents Registration Act.”

BuzzFeed published the dossier in January after CNN reported that intelligence officials included its existence in a briefing to then-President Obama and President-Elect Trump. Trump denied the allegations in the dossier.

The dossier’s author, Christopher Steele, used to head MI6’s Russia desk, and the FBI takes him seriously because he assisted with its corruption investigation into FIFA, according to the Washington Post. U.S. intelligence officials have corroborated some of the information in the dossier, according to CNN.

Steele was hired by Glenn Simpson, a former Wall Street Journal reporter who co-founded Fusion GPS, according to the New York Times.

While Steele was compiling the dossier last summer, Simpson was at the same time working for the U.S. law firm representing a Russian holding company that New York federal prosecutors accused of laundering money in a massive tax fraud. The company is controlled by Denis Katsyv, the son of a former Russian transport minister.

Katsyv meanwhile hired a lobbyist named Rinat Akhmetshin to oppose the human rights sanctions bill called the Global Magnitsky Act. The Russian government opposed the bill because it’s named after a Russian lawyer who died mysteriously in a Moscow jail cell in 2009. The lawyer, Sergei Magnitsky, uncovered the tax fraud that Katsyv is accused of laundering money from.

Grassley’s letter noted with concern Akhmetshin’s background in Russian intelligence. Akhmetshin previously told POLITICO he was drafted as a Soviet counterintelligence officer but denied any ongoing affiliation with the Russian state. He didn’t immediately answer a request for comment on Grassley’s letter.

“It is highly troubling that Fusion GPS appears to have been working with someone with ties to Russian intelligence –let alone someone alleged to have conducted political disinformation campaigns– as part of a pro- Russia lobbying effort while also simultaneously overseeing the creation of the Trump/Russia dossier,” Grassley wrote. “The relationship casts further doubt on an already highly dubious dossier.”

Grassley’s letter also attached a complaint to the Justice Department last July from Bill Browder, an American-born investor who employed Magnitsky at the time of his death. In the complaint, Browder accused Fusion GPS of failing to disclose its activities under FARA. Grassley wanted to know what action the Justice Department had taken on Browder’s complaint.

Five questions investigators want to ask Michael Flynn

President Trump’s former national security adviser, Michael Flynn, has volunteered to be interviewed by the FBI and congressional committees probing possible links between the Trump campaign and Russia in exchange for immunity from prosecution.

The Wall Street Journal first reported the development Thursday evening, which comes a month and a half after Flynn was forced to resign amid revelations that he misled administration officials, including Vice President Pence, about his conversations with Sergey Kislyak, Russia’s ambassador to the United States.

The House and Senate Intelligence committees don’t yet appear to be biting. Reports surfaced Friday that the Senate panel had so far rejected Flynn’s request.


Still, Chairman Richard BurrRichard BurrFive questions investigators want to ask Michael Flynn HB2 replacement makes all the wrong compromises Senate intel panel declines Flynn immunity offer ‘at this time’: report MORE (R-N.C.) has strongly implied that the committee would like to interview Flynn.

A spokesman for House Intelligence Committee Chairman Devin Nunes (R-Calif.) told The Hill that his panel had a “preliminary conversation” with Flynn’s lawyer about arranging for him to speak to the panel but noted the discussions did not include immunity or other potential conditions of his appearance.

Flynn’s testimony could provide valuable information to members of the committees as well as the FBI, all of which have launched their own probes into Russia’s election meddling.

Here are five questions that FBI investigators and members of Congress might have for Flynn should they reach an agreement to interview him.

Who knew what about Flynn’s Russia contacts, and when did they know it?

Flynn could be questioned about which associates of Trump — including the president himself — knew about his associations with Russia, what they knew, and when they knew it.

He also could be asked to provide more information about the nature of his encounters with the Russian ambassador, as well as any other individuals linked to Moscow.

Flynn resigned as national security adviser in February after the Washington Post reported that he discussed sanctions on Russia with Kislyak before Trump’s inauguration despite public denials by White House officials, including Pence. Flynn acknowledged that he had provided “incomplete information” to administration officials.

“The starting points [are] like with any other type of case,” Mark Zaid, an attorney who specializes in national security cases, told The Hill. “Who, what, when, and why. When did he first have conversations with which Russians, and why? And who, if anyone, told him to do it?

Zaid said investigators would also want to know when the conversations took place, and that they would be looking for evidence of any possible quid pro quo with regard to sanctions.

What did the Trump campaign know about Flynn’s payments from sources in Russia and Turkey?

Flynn filed papers with the Justice Department in early March registering himself as a foreign agent. The papers revealed that his firm was paid over $500,000 to lobby on behalf of a Dutch-based firm owned by a Turkish businessman as he serve as a campaign adviser. The owner of Inovo BV, the Dutch-based firm, has ties to Turkish President Recep Tayyip Erdogan.

The White House has denied that Trump knew about Flynn’s lobbying work, though it acknowledged that lawyers for the transition team were informed he might have to register as a foreign agent.

Additionally, records obtained by the House Committee on Oversight and Government Reform and released by ranking member Rep. Elijah Cummings in mid-March showed that Flynn had been paid over $45,000 by Russian state-owned media outlet RT to attend a gala in Moscow in December 2015 at which he was photographed dining next to Russian President Vladimir Putin.

Democrats have alleged that the payment could constitute a violation of the U.S. Constitution’s Emoluments Clause, which bars top officials from taking money from foreign governments.

The new documents also showed that Flynn received thousands of dollars in 2015 from a Russian charter cargo airline and an American subsidiary of Russia-based cybersecurity firm Kaspersky Lab. His payments from Russia-related organizations totaled nearly $68,000.

Less than a week later, committee leaders requested documents from the White House FBI, Pentagon, and Director of National Intelligence related to Flynn’s contacts with and payments from foreign sources. Flynn served as director of the Defense Intelligence Agency (DIA) before resigning in August 2014.

“I would want to know more about any financial payments that he took before being with Trump and also post-DIA to now,” Zaid said.

What information does he have about other associates of Trump’s campaign who may have had contact with Russians?

FBI Director James Comey has said the bureau’s probe of the election includes looking into the nature of any links between individuals associated with Trump’s campaign and Russia.

Flynn could be crucial to understanding any links between other Trump campaign associates and the Russian government. 

Three other people have come under heavy scrutiny: Carter Page, who briefly advised Trump on foreign policy and who has ties to Russian state-owned gas giant Gazprom; Roger Stone, a longtime Trump ally who has admitted to having contact with Guccifer 2.0, the hacker who claimed responsibility for the Democratic National Committee breach, during the campaign; and Paul Manafort, Trump’s former campaign chairman who has come under fire for his work for pro-Russian oligarchs.

Flynn could face questions about any contacts between Russian individuals and these and other Trump associates.

Flynn could also provide information about other Trump associates’ communications with Kislyak. These included former Alabama Sen. Jeff SessionsJeff SessionsMaher, Roger Stone share marijuana cake on TV Five questions investigators want to ask Michael Flynn Trump proclaims April ‘Sexual Assault Awareness and Prevention Month’ MORE, now Trump’s attorney general, who spoke twice with Kislyak last year but did not disclose the contacts during his confirmation proceedings. Session later recused himself from investigations related to the 2016 presidential campaign.

Senior White House adviser Jared Kushner, Trump’s son-in-law, also met with Kislyak at Trump Tower in December. Flynn attended the meeting, which the White House told the New York Times was meant to “establish a line of communication” between the new administration and the Kremlin.

What did the Trump campaign know about campaign aides’ past ties to Russia?

Since Manafort stepped down as campaign chairman last August, more information has emerged about his past work for pro-Russian figures, which has raised questions about how much Trump’s campaign knew about his history before bringing him on.

Most recently, the Associated Press reported that Manafort worked for a Russian billionaire as far back as a decade before the presidential election in order to advance the interests of Putin’s government.

Flynn would likely be questioned on what he or members of the campaign knew about Manafort’s past associations, as well as those of Page, who had a history of pro-Russian rhetoric.

“What was Manafort doing, especially when he was campaign manager? What did the Trump campaign know about these individuals’ prior connections to Russia, to Ukraine?” Zaid observed. 

Did Flynn have any other foreign contacts besides Russia?

Flynn’s past lobbying on behalf of the firm linked to Turkey raises questions about whether he may have had other contacts with foreign sources during the campaign.

“The whole notion of why Flynn said he was talking to the Russian ambassador in the first place was, ‘this is what we do as a transition. We’re talking to foreign leaders, foreign dignitaries.’ Well, what else was going on with respect to that?” Zaid said. “Who else was he talking to?”

Trump leaves photo op before signing executive orders

President Trump on Friday announced two new executive orders aimed at tackling long-standing concerns around trade enforcement, but he left the room before actually signing the orders.

White House video showed Trump entering the Oval Office to announce the orders, but leaving before actually signing any documents.

Vice President Pence appeared to notice the mistake, turning back to grab materials off the president’s desk and leaving the room with them.

Trump reportedly left the room after a reporter asked him about his former national security adviser Michael Flynn, who is seeking immunity before testifying before congressional committees about Russia’s meddling in the presidential election.

The president typically sits inside the Oval Office to sign orders while the press takes photos.

Commerce Secretary Wilbur Ross and National Trade Council Director Peter Navarro were also present at the Friday announcement.

The officials said that the Trump administration will produce a sweeping report on the cause of U.S. trade deficits as well as plans to improve trade enforcement and the collection of billions in import taxes as part of the effort to bolster U.S. manufacturing.

Updated at 6:05 p.m.