Key data
| Regulation | Decision No. 1/2026 of the Specialised Committee on Trade on Level Playing Field for Open and Fair Competition and Sustainable Development [2026/1868] |
|---|---|
| Publication | 29 July 2026 (EU Official Journal) |
| Entry into force | 30 June 2026 |
| Legal basis | Article 409 of the EU-UK Trade and Cooperation Agreement (TCA) |
| Affected parties | Companies operating in EU and UK markets, especially in regulated sectors |
| Category | European Regulation |
| Year | 2026 |
Companies operating on both sides of the English Channel have had, since 30 June 2026, a fully operational arbitration mechanism to resolve conflicts over level playing field for competition and sustainable development. Decision No. 1/2026 of the Specialised Committee on Trade, published in the EU Official Journal on 29 July 2026, establishes the official list of persons who may serve as members of the expert panels provided for in the Article 409 of the EU-UK Trade and Cooperation Agreement (TCA).
This is not a minor change. Until now, the absence of a consolidated list of arbitrators left this mechanism in a state of limited operability. With this decision, either party can formally convene a panel to settle disputes that directly affect the competitiveness of companies.
What does this regulation establish?
The EU-UK Trade and Cooperation Agreement (TCA), in force since Brexit, includes a specific chapter on level playing field for competition. This chapter seeks to prevent either party from gaining unfair competitive advantages through:
- State aid that distorts bilateral competition.
- Labor standards below agreed commitments.
- Environmental or sustainability rules less stringent than those of the trading partner.
- Tax differences that create artificial competitive advantages.
Article 409 of the TCA provides for the creation of expert panels to resolve these disputes. Decision No. 1/2026 takes the key operational step: it establishes the official list of persons available and willing to serve as members of such panels when convened.
The Committee adopting this decision is the Specialised Committee on Trade on Level Playing Field for Open and Fair Competition and Sustainable Development, created specifically under the TCA framework to oversee this area.
Economic and operational impact
The activation of this mechanism has concrete practical consequences for companies:
- Greater legal certainty for companies competing with operators on the other side: there is now a formal channel to report competitive distortions.
- Increased scrutiny risk for companies benefiting from public aid, subsidies or favorable tax regimes in either territory.
- Impact on regulated sectors such as energy, transport, financial services, fishing or manufacturing, where regulatory differences between EU and UK are more pronounced.
- Pressure on labor and environmental standards: companies operating in the UK and competing with European operators could be affected if the panel determines that applied standards create unfair advantage.
From an operational perspective, the existence of an operational expert panel means that any dispute between the EU and UK on these matters can now be resolved in a binding manner, with consequences that can translate into corrective measures, compensatory tariffs or regulatory adjustments with direct market impact.
Who does it affect?
- Exporting and importing companies that regularly operate between the EU and UK.
- Companies benefiting from state aid in either territory (subsidies, tax bonuses, preferential public contracts).
- Sectors with high environmental or labor regulation: energy, heavy industry, transport, fishing, agriculture.
- Companies with operations in both markets that may be affected by panel decisions on competitive distortions.
- Legal advisors and consultants managing regulatory compliance for clients with bilateral EU-UK exposure.
- CFOs and operations directors of business groups with subsidiaries or suppliers in the UK.
Practical example
Imagine a Spanish energy company competing with a British operator in European tenders. The British operator receives a subsidy from the UK Government which, according to the Spanish company, distorts competition and would not be admissible under EU state aid rules.
Before this decision, the Article 409 TCA mechanism existed on paper, but the absence of a formal list of experts made its practical activation difficult. With Decision No. 1/2026 now operational, the affected party (in this case, the EU on behalf of the Spanish company) can request the establishment of an expert group from the official list to examine whether the British subsidy violates the TCA's level playing field principle.
If the panel determines that distortion exists, the TCA provides for corrective measures that may include subsidy elimination or adoption of compensatory measures. This scenario is now legally viable and operationally possible thanks to this decision.
What should companies do now?
- Review bilateral EU-UK exposure: Identify whether your company operates, competes or has suppliers/customers in both markets and in which regulated sectors.
- Audit public aid received: If your company is a beneficiary of subsidies, tax bonuses or public contracts in the UK or EU, assess whether they could be subject to scrutiny under the Article 409 TCA mechanism.
- Verify compliance with labor and environmental standards: The panel may examine whether regulatory differences between EU and UK create unfair competitive advantages. Document your company's compliance in both territories.
- Inform legal and compliance teams: The legal department must know that this arbitration mechanism is now operational and may affect ongoing or future disputes.
- Monitor panel decisions: Rulings by these expert groups may create precedents affecting entire sectors. Establish a system to track decisions adopted.
Frequently asked questions
What types of disputes can the Article 409 TCA expert panel resolve?
The panel can resolve disputes between the EU and UK related to level playing field for competition and sustainable development. Specifically, it covers conflicts over state aid, labor standards, environmental standards and tax differences that distort bilateral trade competition. It does not resolve disputes between private companies directly, but between TCA parties (EU and UK) as agreement subjects.
When did this list of expert arbitrators enter into force?
Decision No. 1/2026 entered into force on 30 June 2026, although it was published in the EU Official Journal on 29 July 2026. Since that date, the expert panel mechanism provided for in Article 409 of the TCA is fully operational.
Can a Spanish company directly activate this arbitration mechanism?
Not directly. The Article 409 TCA mechanism is an instrument between government parties: the EU (through its institutions) and the UK. However, a company can report to the European Commission a practice it considers distortionary so that the EU may, if appropriate, activate the panel. The outcome may have direct consequences on market competition conditions.
Which sectors are most at risk of being affected by these panel decisions?
The sectors with greatest exposure are those with high environmental, labor or tax regulation and significant bilateral trade between EU and UK: energy, transport, manufacturing, fishing, agriculture and financial services. These are sectors where post-Brexit regulatory differences are most pronounced and where state aid has greater competitive weight.
What is the difference between this mechanism and ordinary commercial arbitration?
This mechanism is specific to the EU-UK Trade and Cooperation Agreement (TCA) and operates between States, not between private companies. It is activated when one party believes the other is breaching TCA level playing field commitments. Ordinary commercial arbitration resolves contractual disputes between private parties. Both mechanisms can coexist, but have different scopes of application.
Official source
Consult full regulation at official source (EUR-Lex, EU Official Journal)
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202601868