Northern Ireland protocol: UK–EU Joint Committee December agreement
The Joint Committee announced on 8 December that it had reached agreement.
For our more up to date analysis, read our explainer on the Northern Ireland protocol: UK–EU Joint Committee points of contention.
The Joint Committee – the UK–EU body responsible for overseeing the Withdrawal Agreement – announced on 8 December that it had reached agreement in principle on all outstanding issues relating to the Northern Ireland protocol. The Joint Committee will officially adopt these decisions at its next meeting, ahead of the protocol coming into force on 1 January 2021.
On 10 December, the UK government published a command paper outlining its interpretation of what have been agreed and further other matters related to the implementation of the protocol.[1] This explainer summarises that paper.
Goods moving from Northern Ireland to Great Britain
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What the command paper says |
What it means |
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Qualifying Northern Ireland goods |
As a temporary measure from 1 January, any goods present in free circulation in Northern Ireland are considered ‘qualifying’ goods and are entitled to ‘unfettered access’ to Great Britain. The UK government will introduce long-term measures in the second half of 2021 to allow traders with ‘qualifying status’ to ‘check-in’ at ports and airports to avoid controls and tariffs. There will be a specific regime for agri-food goods. This will apply to goods moving from NI to GB directly, or in transit through the Republic of Ireland. Full controls will apply to ‘non-qualifying goods’. |
These arrangements allow the UK government to deliver on its commitment to ‘unfettered access’ for ‘qualifying’ Northern Ireland businesses to the UK internal market – avoiding the need for checks and paperwork on Northern Irish goods. Under EU customs law applicable in Northern Ireland, any goods leaving Northern Ireland would need to be accompanied by an exit summary declaration. This was one of the issues the UK government controversially sought to address unilaterally through the UK Internal Market Bill. It dropped the relevant clauses following this agreement in the Joint Committee. |
| Export declarations | No export or exit declarations will be required on goods moving NI-GB. Instead the UK will collect data through other transport sources and share it with the EU. |
Goods moving from Great Britain to Northern Ireland
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What the command paper says |
What it means |
|---|---|---|
| Tariffs | ||
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Trusted trader scheme |
Goods moving GB–NI which can be shown to remain in Northern Ireland will not be subject to tariffs. This will be administered through a UK Trader Scheme (UKTS), where businesses will be required to certify that their goods are being sold to consumers in NI or that they are destined for final use in Northern Ireland or the rest of the UK. Businesses trading in goods subject to processing will also be able to benefit from the scheme in specific sectors including food for sale to consumers, construction and healthcare provision. The UKTS will only be available to businesses established in Northern Ireland or that meet other criteria. Rules of origin will not apply to traders using the scheme. |
The protocol states that goods moving GB–NI that are ‘not at risk’ from subsequently moving into the EU, and not subject to commercial processing, will not have to pay customs duties. The decision on the criteria of ‘not at risk’ was deferred to the Joint Committee. This agreement will mean that most goods moving GB–NI – including through the Republic of Ireland – will not be subject to tariffs. This will be the case even if no agreement on the future relationship can be reached by the UK and the EU. The UK government will reimburse businesses for any goods that are subject to tariffs – although the details of how this scheme will work remains unclear. Traders will need to register for a trusted trader scheme to benefit from tariff-free access, which will be subject to review by the UK and the EU to prevent it being abused by businesses based outside NI using the scheme to avoid EU tariffs. Although the paper says the brake can be used in 2024, legal experts have pointed out that it could be reviewed before that point. [2] |
| Goods directly entering NI |
Goods entering NI from the rest of the world using the scheme will pay the UK tariff where it is less than 3% lower than EU tariff. Traders using the UKTS moving goods GB–NI via the Republic of Ireland will be able to do so without tariffs using transit procedures. |
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| Emergency brake | The UKTS will be subject to safeguards including an emergency brake in 2024 “in the event of significant diversion to trade, fraud or other illegal activities”. | |
| Tariff reimbursement | The government will establish a new scheme to reimburse tariffs on those goods not captured under the UKTS, which can be shown to remain in the UK. This will be subject to EU state aid law. The Trader Support Service will provide advice on this. | |
| Agri-food | ||
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Grace periods |
Supermarkets and trusted suppliers – to be identified by the Northern Ireland Department of Agriculture, Environmental and Rural Affairs – will benefit from a ‘grace period’ until 1 April 2021 where they will not have to provide SPS paperwork when moving goods GB–NI. During this period, UK and EU rules will remain aligned. The agreement would allow certain products – for which trade is restricted under EU law – such as chilled meat and sausages to continue to move between GB–NI for six months. The UK government intends to resolve this issue in the long term through a UK–EU free trade agreement. |
The protocol requires new paperwork and checks for certain products of animal origin moving GB–NI. The two sides agreed a grace period in response to concerns raised by supermarkets as well as buy more time for both businesses and the government to prepare. If full checks had been applied on 1 January, this could have had knock-on implications for food supply. EU law also prevents the import of certain unfrozen meat products from countries outside the EU. The agreement allows GB businesses to continue to supply these items to Northern Ireland for a limited period. Long term, the UK and EU have agreed to look at measures to minimise checks, but unless they find a way forward, the temporary measures will end, and full EU agri-food controls will apply. The UK government will establish a scheme to help traders with the costs of compliance with these new measures. |
| Agri-food checks | Technical arrangements will allow the UK and Northern Ireland executive to streamline and minimise checks on agri-food products. “Physical checks on retail packs and supermarket goods can be reduced to zero, or close to zero, on a risk assessed basis.” | |
| Movement assistance scheme |
A new movement assistance scheme will be put in place for agri-foods, which will cover the ‘reasonable cost’ of new SPS paperwork such as Export Health certificates. The scheme will begin in mid-December and support new costs after 31 December 2020. |
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| Other trade issues | ||
| Medicines | Medicine regulation will be implemented over a year. | This measure will prevent disruption to medicine supply in Northern Ireland. |
| VAT |
NI traders will be able to reclaim VAT through existing UK databases when trading with the EU. The issue of VAT on second-hand goods imported from GB but sold in NI remains unresolved. |
Under the protocol, EU VAT law will apply Northern Ireland, but it will continue to be administered through UK systems. NI traders will be able to reclaim VAT. The question of VAT on second-hand goods is particularly important for the second-hand car market in NI, as many vehicles are imported from GB. |
| Parcels | Arrangements which “draw upon available flexibilities” will be put in place but are still being finalised by HMRC. | Under the protocol, parcels from businesses in GB to customers in NI, for example, from Amazon, would be subject to checks and controls. The exact arrangements remain unclear. |
Other issues
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What the command paper says |
What it means |
|---|---|---|
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State aid |
EU state aid will apply to measures that ‘affect trade’ between NI and EU, but only where there is a ‘genuine and direct link’ to Northern Ireland. Agricultural support will be exempt from state aid rules up to £380m, with the option to roll forward £25m of the unused cap annually. Fisheries subsidies will also be exempt up to £17m every five years, with a maximum of £4m per year. |
The UK government proposed taking powers in the UK Internal Market Bill to unilaterally interpret EU state aid law applicable in Northern Ireland under the protocol. The UK and EU have agreed in principle that this will not apply to subsidies granted to businesses operating in GB only. As a result the UK government agreed to remove this clause of the bill. However, it is not clear what legal force this ‘unilateral declaration’ will have should a subsidy be challenged in court. The Joint Committee has also fulfilled its obligation under the Withdrawal Agreement to establish maximum level of support for agriculture not covered by EU subsidy rules. |
| Single Electricity Market | The UK and the EU have agreed technical measures to support the single electricity market whilst allowing NI to regulate its own retail market. | The single electricity market will continue to operate on an all-Ireland basis. |
| Supervision | EU officials will be present when UK officials are applying EU law. The EU and the UK will have reciprocal access to each other’s databases. | As required by the Withdrawal Agreement, the UK and the EU have agreed arrangements to allow the EU to exercise its rights under the protocol. EU officials will ‘hotdesk’ in UK facilities. |
| Industrial goods |
Northern Ireland will align with EU rules on industrial goods, with the rules administrated by UK bodies through market surveillance. UK approvals that a good meets EU rules will be valid for goods placed on the Northern Ireland market, and EU approvals for NI goods will be valid for goods placed on the GB market. |
Many EU product standards and labelling rules will continue to apply in Northern Ireland. Products meeting these standards and labelling requirements in NI will be accepted on the GB market. |
| Rights in individuals | Extra resources will be provided to Northern Ireland Equality and Human Rights Bodies to support their duties monitoring the commitment in Article 2 of the protocol to no diminution of rights, under the Belfast (Good Friday) Agreement. | Under the protocol, these bodies can raise any right-based issues with the specialised committee on Northern Ireland. This will help them perform this function. |
| Errors and omissions | The UK and the EU have agreed in principle changes to the annexes of the protocol, to correct errors and omissions. | The UK and the EU have made minor technical clarifications to the list of EU law which will apply in Northern Ireland at the end of the transition period. |
- Cabinet Office, The Northern Ireland Protocol, 10 December 2020, www.gov.uk/government/publications/the-northern-ireland-protocol
- David Phinnemore, Twitter, 10 December 2020, https://twitter.com/DPhinnemore/status/1337152393360896000?s=20
- Topic
- Brexit
- Keywords
- Northern Ireland protocol
- Publisher
- Institute for Government