The Protocol on Ireland/Northern Ireland Contents

Chapter 7: Protection of the UK internal market and technical regulations (Articles 6 and 7)

Article 6: Protection of the UK internal market and the movement of goods from Northern Ireland to Great Britain

143.The Government’s Command Paper asserts that, because the Protocol neither creates, nor provides for the creation of, “any kind of international border in the Irish Sea between Great Britain and Northern Ireland … its provisions must entail the minimum possible bureaucratic consequences for business and traders, particularly those carrying out their affairs entirely within the UK customs territory”. In the Government’s view, this means that trade from Northern Ireland to Great Britain “should take place as it does now. There should be no additional process or paperwork and there will be no restrictions on Northern Ireland goods arriving in the rest of the UK.”113

144.This assertion needs to be read in the context of Article 6, on ‘Protection of the UK internal market’, which primarily covers matters relating to the movement of goods from Northern Ireland to Great Britain. Article 6(1) states: “Nothing in this Protocol shall prevent the United Kingdom from ensuring unfettered access for goods moving from Northern Ireland to other parts of the United Kingdom’s internal market.” Article 6(2) states that, “having regard to Northern Ireland’s integral place in the United Kingdom’s internal market, the Union and the United Kingdom shall use their best endeavours to facilitate the trade between Northern Ireland and other parts of the United Kingdom”, while taking “into account their respective regulatory regimes”.114

145.Article 6(1) states that the provisions of EU law applied to Northern Ireland via the Protocol “which prohibit or restrict the exportation of goods” shall “only be applied … to the extent strictly required by any international obligations of the Union”.115 The Joint Committee is enjoined to keep the facilitation of trade between Northern Ireland and the UK “under constant review”, and is instructed to adopt “appropriate recommendations” to avoid controls at Northern Ireland’s ports and airports “to the extent possible”.116 This implies that some checks and controls will nevertheless be necessary.

Checks and controls in relation to the prohibition or restriction of the export of goods

146.The reference to prohibitions or restrictions being applied only “to the extent strictly required by any international obligation of the Union” is significant, since a number of EU sanctions or restrictive measures derive from binding Resolutions of the UN Security Council, for instance in relation to trafficking in firearms, endangered species or diamonds.117 In its technical note on the implementation of the Protocol, the Commission interpreted this requirement as meaning that “all goods leaving Northern Ireland to either a third country or Great Britain are subject to prohibitions and restrictions applicable to exports under relevant Union law, without prejudice to Article 6(1) of the Protocol.”118

147.The Government’s Command Paper confirmed that checks and controls will be required on:

“goods falling within the very limited number of procedures relating to specific international obligations binding on the UK and the EU—for example, obligations on the movement of endangered species—and where traders want to use special procedures like duty suspense where we would continue to provide facilitations. We will ensure that the necessary procedures apply only to very minimal volumes of relevant trade necessary to comply with those obligations. For goods affected, the processes put in place in these very specific cases will have negligible implications for trade as a whole. We will provide guidance to the small number of traders affected before the end of the transition period.”119

148.We welcome the Government’s confirmation that checks and controls will be required on goods moving from Northern Ireland to Great Britain to the extent necessary to meet the UK and the EU’s international law obligations (for instance to comply with resolutions of the UN Security Council imposing economic sanctions) regarding the prohibition or restriction of the export of goods. We invite the Government to set out the nature, scale and location of such checks and controls.

Exit summary declarations

149.Article 6 also needs to be read in conjunction with Articles 5(3) and 5(4), which, as we have seen, apply EU customs legislation, including the Union Customs Code, to Northern Ireland.120 In its technical note on the implementation of the Protocol, the Commission states that the UK has “committed to apply the relevant Union Customs Code formalities in respect of all goods leaving Northern Ireland to either a third country or Great Britain”.121 The Union Customs Code implies a requirement to complete exit summary declarations on goods moving from Northern Ireland to Great Britain (or third countries), as a ‘Safety and Security Declaration’, which the EU uses to help enforce its international restrictions and prohibitions, referred to above.122

The Government’s view

150.The Government’s position on the requirement for exit summary declarations has lacked clarity in the months since the Protocol was published. When we asked Mr Barclay whether Northern Ireland businesses would have to complete export declarations when sending goods to Great Britain, he initially replied: “No. We have said, in terms of from Northern Ireland to GB, that it will be frictionless.”123 He then revised his answer: “Exit summary declarations will be required in terms of Northern Ireland to GB.”124 Shortly afterwards, in an apparent reference to Mr Barclay’s widely quoted evidence, the Prime Minister said: “The great thing that has been misunderstood about this is, and I speak as the Prime Minister of the United Kingdom and a passionate unionist, there will not be checks on goods going from Northern Ireland to Great Britain.”125

151.In the meantime, Jim Harra had told the Treasury Committee on 22 October 2019 that there would be “some administrative process, an electronic form, which will apply to goods moving from Northern Ireland to Great Britain”, but said that the detail was yet to be settled: “In the coming months, we need to work both within the UK and together with the EU to understand precisely what those administrative processes will be.”126

152.Mr Harra said that HMRC had predicted the cost of each such declaration would be between £15 and £56, “depending on the complexity of the declaration and the nature of the arrangement you use to make it”.127 He acknowledged that HMRC did not know what the precise impact of these provisions would be, because during the transition period “we have to go through a process with the EU to agree what these procedures are … it is impossible to be definitive”. He stated that it “will be intended to keep the paperwork as light as possible while addressing the obligations that we have agreed with the EU that we will meet in terms of protecting its market”.128

153.At his appearance before the Committee on 5 May 2020, we asked Mr Gove if the completion of exit summary declarations was a requirement under the Protocol. He replied:

“To my mind unfettered access is the single most important thing. One question that I ask is whether we can ensure that we are safeguarding the UK’s internal market as well as the EU’s single market. That is the approach that we will take, so we will see how that develops in the course of the conversations that we have.”129

154.In its Command Paper the Government stated:

“Our view is that it makes no sense for Northern Ireland businesses to be required to complete an export or exit summary declaration as they send goods directly to the rest of the UK. Self-evidently goods being sent away from the Single Market cannot create a back door into it; and any such goods subsequently leaving the UK would be subject to both exit and entry checks anyway en route to their new destination. We believe that this pragmatic approach is a sensible one and should be agreed between the UK and the EU in the Withdrawal Agreement Joint Committee.”130

155.The Command Paper clarifies that these arrangements “will not cover goods travelling from Ireland or the rest of the EU being exported to Great Britain. The UK’s customs and regulatory regime will apply to EU goods and businesses exporting to Great Britain, subject … to any preferential terms we agree through a Free Trade Agreement.”131 While the Government intends to define a qualifying status for goods and businesses in Northern Ireland benefiting from unfettered access,132 it has not explained how it will in practice distinguish between goods originating from Northern Ireland, or from Ireland and the rest of the EU, for the purposes of exit summary declarations.

Witnesses’ view

156.David Henig said that a failure to complete exit summary declarations on goods moving from Northern Ireland to Great Britain could, prima facie, lead to a most favoured nation breach under WTO terms, as well as creating an incentive for the movement of goods from mainland Europe into Great Britain via Ireland and Northern Ireland, in order to avoid checks at the Channel ports.

157.The Northern Ireland Business Network said that their understanding was that exit summary declarations would be required as a stock-take of goods leaving the Single Market. They pointed out that under the standard EU exit summary declaration form, 31 data elements (i.e. answers to questions) needed to be completed, and there was a €300 fine if the form was completed incorrectly. If the typical EU regime applied to Northern Ireland to Great Britain movement, there would be one form per consignment. They said that this could require 70 forms for a single lorry, and that completion of these forms would mostly be delegated to the logistics providers, who would be relying on the exporter for information.133

158.The Northern Ireland Business Network also pointed out that many Northern Ireland businesses had no experience in this area, but would suddenly have to comply with new rules and procedures for moving goods to Great Britain. While large companies were making preparations in terms of training, SMEs did not have the staff to do the same. They called for the Government to negotiate a bespoke arrangement for exit summary declarations.134

Conclusion

159.The continued debate over whether or not exit summary declarations will be required on goods moving from Northern Ireland to Great Britain, with differing views expressed by Ministers and officials, has been unhelpful to Northern Ireland businesses, who urgently need clarity.

160.Articles 5(3) and 5(4) apply EU customs law, including the Union Customs Code, to Northern Ireland. This includes a requirement for the completion of exit summary declarations on goods moving from Northern Ireland to Great Britain. We therefore concluded in our January 2020 report that “exit summary declarations are likely to be required for goods moving from Northern Ireland to Great Britain, unless and until the parties agree alternative arrangements to facilitate the movement of such goods”.

161.Northern Ireland stakeholders have expressed serious concern at this new administrative burden. They have drawn attention to the complexity of the standard EU exit summary declaration form, and the lack of readiness of many Northern Ireland businesses, particularly SMEs.

162.In contrast to its previous statements, the Government now argues that Northern Ireland businesses should not be required to complete an exit summary declaration as they send goods directly to the rest of the UK. Given the concerns of Northern Ireland businesses, the EU should take this argument seriously, but the Government in turn needs to explain how such an exemption can be reconciled with the EU’s international obligations under the Union Customs Code. The Government also needs to explain how it will in practice distinguish between goods originating in Northern Ireland, or in Ireland and the rest of the EU, for the purposes of exit summary declarations.

163.The EU also, as part of its wider commitment to support Northern Ireland, has a duty to ensure that these processes do not place an intolerable burden upon businesses. If exit summary declarations cannot be eliminated, the Joint Committee should consider means to streamline and simplify the process, in particular in the context of declarations for multiple consignments on a single load.

164.After months of uncertainty, this issue now needs to be resolved. If exit summary declarations are required, Northern Ireland businesses need to know precisely what will be required, and how, when and where declarations will need to be made. This in turn will require a programme of training for Northern Ireland businesses, and arrangements to support businesses after the Protocol has come into effect.

Unfettered market access to the UK internal market

165.Notwithstanding these provisions, Article 6(1) states that “nothing” in the Protocol will “prevent the UK from ensuring unfettered market access” for goods travelling from Northern Ireland to Great Britain. The Government has repeatedly made a unilateral commitment to guarantee in legislation before 1 January 2021 unfettered access for Northern Ireland’s businesses to the whole of the UK internal market, most recently in its Command Paper.135

166.The key question, in the context of the Government’s opposition to the completion of exit summary declarations, is the balance between the Protocol’s requirement to apply the Union Customs Code and its statement that nothing in the Protocol should prevent the UK ensuring unfettered access. Colin Murray acknowledged the “uneasy relationship” between Articles 5 and 6, which he said could lead to arbitration. David Henig observed that, while Article 6 states that nothing within the Protocol shall prevent unfettered access, “that does not mean that that is true of any other agreement, such as the commitments under World Trade Organization rules.” Dr Sylvia de Mars said that the EU and UK may disagree as to whether filling in some paperwork amounts to an infringement of unfettered access.136

167.The Northern Ireland Business Network stressed that, in order to access the Great Britain market in an unfettered manner, Northern Ireland businesses needed to be able to maintain relationships with suppliers, engage in the UK market, source raw material (such as meat) from Great Britain, process goods in Northern Ireland and then send them back. They explained that in some cases items cross the border back and forth several times in the course of production. They therefore needed to maintain supply chains across the island of Ireland, as businesses based in Northern Ireland sourced products from Ireland in order to supply the Great Britain market. They stressed that this should be a concern for the whole of the UK, given the important role that Northern Ireland businesses play in meeting UK-wide demand.137

168.In his evidence to us, Mr Gove repeatedly stressed the importance of the commitment to unfettered access:

“We take that very seriously and want to make sure that the EU appreciates that as well. … We stand by our determined obligation to help the Republic of Ireland and the EU to protect the integrity of the EU’s single market, but the Protocol holds in balance with that the requirement to ensure that the UK’s internal market operates effectively as well.”138

169.In a letter dated 8 April, Mr Gove described ‘unfettered access’ as meaning “no tariffs, no import processes, and no checks as these goods arrive in Scotland or Liverpool”.139 In its Command Paper, the Government defined unfettered access as follows:

170.The European Union (Withdrawal Agreement) Act 2020 includes provision for the Government to define a qualifying status for goods and businesses in Northern Ireland benefiting from unfettered access. The Government committed in its Command Paper to engage with businesses and the Northern Ireland Executive on the means for delivering qualifying status, ensuring that the needs of Northern Ireland businesses are met.141 However, it did not explain how it will in practice distinguish between qualifying Northern Ireland goods and goods originating in Ireland and the rest of the EU, in order to avoid Northern Ireland becoming a back door for goods entering the UK market from the EU without checks.

171.The Northern Ireland Business Network stressed that, in order to make it an attractive destination for investment, Northern Ireland goods will need to be treated as domestic in both the UK and EU markets. They said that it was largely in the gift of the UK Government to provide a unique definition for Northern Ireland goods for tariff, customs and goods of origin provisions in order for UK customs not to be applied.142

172.We note the apparent contradiction between the commitment in Article 5 to apply the Union Customs Code in Northern Ireland, and that in Article 6, that nothing in the Protocol shall prevent the UK from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the UK. The Government needs to explain how this will be resolved in practice.

173.The key concerns for Northern Ireland businesses in terms of unfettered access are maintaining the practical ability to service the Great Britain market, maintaining supply chains both across the UK and the island of Ireland, and sourcing and processing raw material to and from Great Britain. In bringing forward legislation to give effect to its commitment, the Government must prioritise these concerns. We urge the Government to intensify its engagement and consultation with Northern Ireland stakeholders.

174.The Government has committed to defining a qualifying status for Northern Ireland goods and businesses. It needs to provide more information on this definition, and in particular to explain how it will in practice distinguish between qualifying Northern Ireland goods, and goods originating in Ireland and the rest of the EU, in order to avoid Northern Ireland becoming a back door for goods entering the UK market from the EU without checks. It also needs to set out if it will allow for Northern Ireland products to be treated as qualifying domestic goods in both the UK and EU markets.

UK common frameworks

175.The tension between Articles 5 and 6 in turn calls into question Northern Ireland’s participation in UK-wide common frameworks, which the UK Government has been developing with the Devolved Administrations “to create a common approach across the UK in a range of policy areas … ensuring it remains simple for businesses from different parts of the UK to trade with each other … and ensure the effective functioning of the UK internal market.”143

176.We invite the Government to explain the impact of the Protocol upon Northern Ireland’s participation in UK-wide common frameworks being developed with the Devolved Administrations, which the Government has stressed are necessary to ensure the effective functioning of the UK internal market.

Article 7: Technical regulations, assessments, registrations, certificates, approvals and authorisations

177.Article 7 of the Protocol imposes additional regulatory and technical obligations on Northern Ireland. These include the application to goods moving from the EU into Northern Ireland144 of the EU’s rules prohibiting quantitative restrictions on imports and measures having equivalent effect,145 a requirement to introduce a “United Kingdom (Northern Ireland)” or “UK(NI)” marking for the labelling of goods produced in Northern Ireland,146 and provisions regarding technical regulations, assessments, registrations, certificates, approvals and authorisations.147


113 Cabinet Office, The UK’s Approach to the Northern Ireland Protocol, CP 226, (20 May 2020), paras 16–17: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/886289/2020–05-20_Command_Paper__UK_s_Approach_to_the_Northern_Ireland_Protocol-gov.uk.pdf [accessed 22 May 2020]

114 Withdrawal Agreement (19 October 2019), Protocol on Ireland/Northern Ireland, Article 6(2)

115 Withdrawal Agreement (19 October 2019), Protocol on Ireland/Northern Ireland, Article 6(1)

116 Withdrawal Agreement (19 October 2019), Protocol on Ireland/Northern Ireland, Article 6(2)

117 European Commission, EU Prohibitions and Restrictions for Customs (June 2018): https://ec.europa.eu/taxation_customs/sites/taxation/files/prohibition_restriction_list_customs_en.pdf [accessed 19 May 2020]

118 European Commission, Task Force for Relations with the United Kingdom, Technical note on the implementation of the Protocol on Ireland/Northern Ireland (30 April 2020): https://ec.europa.eu/info/sites/info/files/brexit_files/info_site/20200430_note_protocol_ie_ni.pdf [accessed 19 May 2020]

119 Cabinet Office, The UK’s Approach to the Northern Ireland Protocol, CP 226, (20 May 2020), para 22: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/886289/2020–05-20_Command_Paper__UK_s_Approach_to_the_Northern_Ireland_Protocol-gov.uk.pdf [accessed 22 May 2020]

120 See paras 38–44.

121 European Commission, Task Force for Relations with the United Kingdom, Technical note on the implementation of the Protocol on Ireland/Northern Ireland (30 April 2020): https://ec.europa.eu/info/sites/info/files/brexit_files/info_site/20200430_note_protocol_ie_ni.pdf [accessed 19 May 2020]

122 BBC, ‘Will Northern Irish ‘exports’ within UK need checks?’ (24 October 2019): https://www.bbc.co.uk/news/business-50172896 [accessed 19 May 2020]

123 Oral evidence taken on 21 October 2019 (Session 2019), Q 9 (Rt Hon. Stephen Barclay MP)

124 Oral evidence taken on 21 October 2019 (Session 2019), Q 10 (Rt Hon. Stephen Barclay MP)

125 BBC, ‘No checks on goods between NI and GB, says PM’ (8 November 2019): https://www.bbc.co.uk/news/uk-northern-ireland-50344110 [accessed 19 May 2020]

126 Oral evidence taken before the Treasury Committee, 22 October 2019 (Session 2019), Q 265 (Jim Harra)

127 Oral evidence taken before the Treasury Committee, 22 October 2019 (Session 2019), 281 (Jim Harra)

128 Oral evidence taken before the Treasury Committee, 22 October 2019 (Session 2019), Q 284 (Jim Harra)

129 Oral evidence taken on 5 May 2020, Q 23 (Rt Hon. Michael Gove MP)

130 Cabinet Office, The UK’s Approach to the Northern Ireland Protocol, CP 226, (20 May 2020), para 20: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/886289/2020–05-20_Command_Paper__UK_s_Approach_to_the_Northern_Ireland_Protocol-gov.uk.pdf [accessed 22 May 2020]

131 Ibid. para 23

132 See paras 170–171.

133 European Union Committee, Note of roundtable meeting with Northern Ireland Business Network (25 February 2020): https://committees.parliament.uk/publications/409/documents/1540/default/ [accessed 19 May 2020]

134 Ibid.

135 Cabinet Office, The UK’s Approach to the Northern Ireland Protocol, CP 226, (20 May 2020), para 19: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/886289/2020–05-20_Command_Paper__UK_s_Approach_to_the_Northern_Ireland_Protocol-gov.uk.pdf [accessed 22 May 2020]

137 European Union Committee, Note of roundtable meeting with Northern Ireland Business Network (25 February 2020): https://committees.parliament.uk/publications/409/documents/1540/default/ [accessed 19 May 2020]

138 Oral evidence taken on 5 May 2020, Q 12

139 Letter dated 8 April 2020 from Rt Hon. Michael Gove MP, Chancellor of the Duchy of Lancaster to Lord Kinnoull, Chair of the European Union Committee: https://committees.parliament.uk/publications/690/documents/3408/default/ [accessed 19 May 2020]

141 Ibid. para 24

142 European Union Committee, Note of roundtable meeting with Northern Ireland Business Network (25 February 2020): https://committees.parliament.uk/publications/409/documents/1540/default/ [accessed 19 May 2020]

143 HL Deb, 4 April 2019, col HLWS1449

144 Withdrawal Agreement (19 October 2019), Protocol on Ireland/Northern Ireland, Article 7(1)

146 Withdrawal Agreement (19 October 2019), Protocol on Ireland/Northern Ireland, Article 7(2)

147 Withdrawal Agreement (19 October 2019), Protocol on Ireland/Northern Ireland, Article 7(3)




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