Under the "Northern Ireland Protocol" Northern Ireland will have a unique status in the EU customs union and the UK. Businesses inside and outside Northern Ireland may wish to consider the implications of the protocol for their operations.
The protocol is established in the UK’s withdrawal agreement from the EU, but may be modified on agreement between both parties; this may happen as part of the negotiations for the EU-UK Free Trade Agreement. The UK government has signified that it is prepared to unliterally make changes to this legal framework – these are set out in the Internal Market bill, which is currently (21 October 2020) making its way through the UK parliament.
The protocol allows for Northern Ireland to remain part of the UK’s customs territory while not introducing any new additional customs procedures for goods passing between Northern Ireland and the Republic of Ireland. There is already a customs border between the two for excise purposes (eg, Excise duties on tobacco, alcohol and fuel), however there is no physical border infrastructure. A key objective of the withdrawal agreement was to avoid new infrastructure at the border. The protocol therefore allows for trade between Northern Ireland and the Republic of Ireland with:
- no customs checks, paperwork or requirements
- no tariffs or quotas applicable, nor checks on rules of origin
Any approvals or certifications required to place goods from Northern Ireland on the EU internal market will be recognised across the UK market.
The Common Travel Area, which predates the EU, means UK and Irish citizens are free to live or work in either country. Northern Ireland will remain part of the UK’s customs territory and the UK government has pledged that no tariffs will apply to goods passing between Northern Ireland and the UK mainland.
The UK government has pledged that no new customs infrastructure will be built in Northern Ireland and that no customs declarations will be required for goods moving from the UK mainland to Northern Ireland. It has also pledged that tariffs will either not apply for movement of goods to Northern Ireland, or that "full use will be made of waivers and reimbursements to minimise the impact". Checks and ‘processes’ will be minimal, although there is not, as yet, full clarity on what these will be.
A key area of uncertainty is on the process for moving goods from Northern Ireland to the UK mainland. The UK government has pledged that there will be no import declarations for goods arriving in the UK mainland from Northern Ireland. However, the Withdrawal Agreement does require exit declarations for goods leaving Northern Ireland. The UK government says it is their "unequivocal position" that these declarations should not apply and is seeking to disapply this part of the Withdrawal Agreement in the Internal Market bill. The outcome is therefore currently uncertain.