For many years holders of a FAA CFI certificate have trained pilots for a UK IMC rating at the many schools located in the USA. It has also happened in other countries. On what grounds can the CAA say that it is not acceptable for someone qualified to teach instrument flying should not teach for the IMC?
They cannot hide behind the Eurogarbage umbrella, and unless they can produce a safety case to justify their decision, they are skating on thin ice if they reject a European Licence holder who is quite entitled to teach at any UK ATO to the level of their FI certificate!