"Holyrood’s Finance and Constitution Committee is not in a position to recommend legislative consent to the EU Withdrawal Bill," the Scottish parliament said in a statement.
The source of concern for the Scottish parliament is Clause 11 of the EU Withdrawal Bill that would prevent Scottish parliament from passing any legislation which would modify "retained EU law," which is intended to consist of those parts of EU law that are to remain, or become, part of UK law after Brexit.
"The unanimous view of the Committee is that Clause 11 of the Bill, as currently drafted, is incompatible with the devolution settlement in Scotland. The committee adds that even if Clause 11 is designed to be a transitional measure it fails to respect fully the devolution settlement," the statement said.
The second phase, to which the parties moved on in December, is expected to focus on the transition period in EU-UK relations after Brexit, and their future long-term trade and security cooperation.