EXPLANATORY NOTE

UK PROPOSALS FOR AN AMENDED PROTOCOL ON IRELAND/NORTHERN IRELAND

2 October 2019

1
 EXPLANATORY NOTE ON UK PROPOSALS FOR AN AMENDED PROTOCOL ON
IRELAND/NORTHERN IRELAND

1. The UK sets out below a proposal for an agreement which should be acceptable to
both sides and which delivers the objectives of the Belfast (Good Friday) Agreement.
This proposal would:
a. be based first and foremost on our commitment to find solutions which are
compatible with the Belfast (Good Friday) Agreement, the fundamental basis
for governance in Northern Ireland;
b. confirm our commitment to long-standing areas of UK / Ireland collaboration,
including those provided for in the Belfast (Good Friday) Agreement, but also
others, in some cases predating the European Union: the Common Travel
Area, the rights of all those living in Northern Ireland, and North / South
cooperation;
c. provide for the creation of an all-island regulatory zone on the island of Ireland,
covering not just sanitary and phytosanitary (SPS) and agri-food rules but all
goods, thus eliminating regulatory checks for trade in goods between Northern
Ireland and Ireland;
d. make this regulatory zone dependent on the consent of those who live under
it, through the Northern Ireland institutions;
e. ensure that Northern Ireland will be fully part of the UK customs territory, not
the EU customs territory, after the end of the transition period, with all customs
processes necessary to ensure compliance with the UK and EU customs
regimes taking place electronically, and with the small number of physical
checks needed conducted at traders’ premises or other points on the supply
chain. This should be coupled with a firm commitment (by both parties) never
to conduct checks at the border in future.

(1) Overarching measures

2. The UK Government is absolutely committed to upholding the Belfast (Good Friday)

Agreement. The Government has been clear that it will not, under any circumstances,
impose a hard border between Northern Ireland and Ireland. The Protocol should
make a firm commitment to avoiding customs checks, regulatory checks, or related
physical infrastructure at the border between Northern Ireland and Ireland.

3. The Protocol is not intended to provide a model which can be transferred to other
aspects of the future relationship between the UK and the EU. It constitutes a
response to the specific conditions of Northern Ireland and Ireland in the context of
the Belfast (Good Friday) Agreement. For example, the UK Government would not

2
 see measures agreed here as setting a precedent for wider arrangements governing
the movement of goods between the UK and EU, or in relation to specific entry
points, such as Calais or Dover.

4. The previous Protocol contained, in Annex 4, a list of ‘level playing field’ measures.
The amended Protocol represents a significant change to the customs relationship
between the EU, Northern Ireland and the UK more broadly. The proposal set out in
this note would see regulatory checks applying between Great Britain and Northern
Ireland, whilst Northern Ireland and Ireland would be in separate customs territories
with customs controls applied to trade in goods between them. There is therefore no
need for the extensive level playing field arrangements envisaged in the previous
Protocol. Measures regarding open and fair competition are most appropriately
discussed in the context of the UK-EU future relationship.

5. The arrangements set out in this explanatory note are intended to provide a basis for
the permanent future relationship between the UK and EU in due course, with any
adaptations appropriate to reflect that new relationship.

(2) Regulatory compliance for goods

6. The introduction of a zone of regulatory compliance across Northern Ireland and the
EU would remove the need for regulatory checks and related infrastructure at the
border between Northern Ireland and Ireland, while enabling the UK and EU to
maintain their own distinct customs regimes.

7. At the end of the transition period:

a. Building on the existing practice established to maintain the Single

Epidemiological Unit (SEU) on the island of Ireland, Northern Ireland would
align with EU SPS rules, including those relating to the placing on the
market of agri-food goods. Agri-food goods entering Northern Ireland from
Great Britain would do so via a Border Inspection Post or Designated Point of
Entry as required by EU law, building on the provisions that already exist to
support the SEU. They would be subject to identity and documentary checks
and physical examination by UK authorities as required by the relevant EU
rules.

b. In addition, Northern Ireland would also align with all relevant EU rules
relating to the placing on the market of manufactured goods. This would
reinforce the arrangements above by ensuring that regulatory checks can be
implemented at the boundary of the zone, as appropriate and in line with
relevant EU law, minimising the potential for non-compliance. This would be
supplemented by on-the-market surveillance, as it is now.

3
 c. The governance framework for this zone would be as set out in the previous
Protocol.

8. The EU measures which would apply within the single zone of regulatory compliance
are those set out in Annex 5 of the previous Northern Ireland Protocol, excluding
those measures covering areas dealt with in our proposals on customs in Section (4)
below. Northern Ireland would align with updates to the measures within scope and
the Joint Committee would determine whether any new measures should be included
within scope, as set out in Article 15(4) and (5) of the previous Protocol.

9. To support this system of controls at the boundary of the zone, traders moving goods
from Great Britain to Northern Ireland would need to notify the relevant authorities
before entering Northern Ireland, in order to provide the necessary information to
undertake the appropriate checks, and, where appropriate, prevent the entry of
products prohibited or restricted by EU rules. At its boundary with other third
countries, the EU currently captures much of this information through the application
of the Union Customs Code. This would not be an appropriate approach under the
amended Protocol, as Northern Ireland will be in the UK customs territory. A new
notification requirement will therefore be needed to provide basic information to
support the regulatory controls, covering:

a. the nature of the goods in the consignment, and where they were produced;

b. the people sending (exporting) and receiving (importing) the goods; and

c. where the goods will depart and arrive.

The precise arrangements for ensuring the effective operation of this approach would
be decided through the Joint Committee before the end of the transition period.

10. As a result:

a. The regulatory checks and controls taking place on goods entering Northern
Ireland from Great Britain would not apply when goods enter Ireland from
Northern Ireland. The UK would not apply corresponding checks or controls on
goods entering Northern Ireland from Ireland.

b. Third country goods arriving in Northern Ireland would, as now and in the rest
of the UK, be subject to full customs processes, as well as the required
regulatory checks.

11. The UK Government is committed to protecting Northern Ireland’s position in the

UK’s internal market, and guarantees that Northern Irish businesses and farmers will

4
 continue to have unfettered access to the rest of the UK market. In support of this,
the provisions in Article 7 of the previous Protocol should be maintained. For the
same reason the UK also supports maintaining the provisions in Article 8 of the
previous Protocol.

(3) Consent

12. The zone of regulatory compliance will mean that Northern Ireland will be, in
significant sectors of its economy, governed by laws in which it has no say. That is
clearly a significant democratic problem. For this to be a sustainable situation, these
arrangements must have the endorsement of those affected by them, and there must
be an ability to exit them. That means that the Northern Ireland institutions – the
Assembly and the Executive – must be able to give their consent on an ongoing basis
to this zone (and to the Single Electricity Market, which raises similar issues).

13. Our proposal is that, before the end of the transition period, and every four years
afterwards, the UK will provide an opportunity for democratic consent to these
arrangements in the Northern Ireland Assembly and Executive, within the framework
set by the Belfast (Good Friday) Agreement. If consent is withheld, the arrangements
will not enter into force or will lapse (as the case may be) after one year, and
arrangements will default to existing rules.

(4) Customs

14. It is a fundamental point that the UK will be exiting the EU Customs Union as a whole
at the end of the transition period. This means that the UK and EU will operate
distinct customs territories and that Northern Ireland will be part of the UK customs
territory.

15. This means that the border between Ireland and Northern Ireland will be a customs
border. That does not mean that customs checks and controls need to take place at,
or even near, that border. Instead, we are making a proposal which ensures that no
customs controls necessary to ensure compliance with the UK and EU customs
regimes will take place at or near the border. This system will be underpinned by
continuing close cooperation between UK and Irish authorities.

16. These arrangements will be based on the existing customs legislation of both parties,
which will be the ultimate guarantee that an operable system is in place. But the
intention is to make a series of simplifications and improvements to that legislation
which will ensure that the commitment in the new Protocol to ensure no checks or
infrastructure at the border will be fulfilled by the end of the transition period.

17. Specifically, our proposal consists of the following:

5
 a. All goods movements between Northern Ireland and Ireland will be
notified using a declaration; regulatory checks will not apply. Goods would
be imported or exported between Northern Ireland and Ireland under either i) a
transit mechanism or ii) a prior declaration mechanism. Goods moved under
either mechanism would be under customs supervision by one or other
customs authority from the point at which they are declared for export until
they are cleared by customs in the territory of import for free circulation or
placed under an alternative customs procedure. Cooperation between relevant
authorities would help to ensure compliance.

b. Under either process the relevant customs authority will be notified that
the consignment has entered their customs territory. Either mechanism
would link the movement of the consignment over the border with the
information provided to the customs authority, which could identify any goods
requiring customs interventions. Physical checks – which would continue to be
required only on a very small proportion of movements based on risk-
assessment – could then take place at traders’ premises or other designated
locations which could be located anywhere in Ireland or Northern Ireland.

c. Special provision would be made for small traders to ensure that

requirements on them could be simplified. These simplifications should respect
the nature of economic activity between Northern Ireland and Ireland and
should ensure that any special circumstances regarding the purpose for which
goods move between customs territories, the nature of the goods, or the
nature of the trader carrying out the movement, are all taken into account.
Some small traders should be exempted from processes and from paying duty
altogether. These measures would need to be carefully designed so they
target the traders most in need of support while continuing to ensure
compliance as far as possible.

d. We also propose that the UK and EU should take an approach which ensures
that goods movements between Ireland and Northern Ireland should not
require entry or exit summary declarations.

18. These arrangements would be supported by a range of simplifications, which could

be applied in the same way in Northern Ireland and Ireland, including:

a. Trusted trader scheme. Authorised traders who meet agreed eligibility criteria
could have access to benefits which make the customs process for goods
moving from one territory to another easier to comply with. Authorities in both
Ireland and Northern Ireland would commit to applying appropriate schemes,
and could offer benefits to one another’s authorised traders, though would
retain the flexibility to adjust these based on the specific circumstances of their
territories.

6
 b. Simplified customs procedures would be used to make it easier for eligible
traders to submit declarations for their cross-border trade whilst maintaining
appropriate compliance standards.

c. Temporary admissions. To minimise burdens on individuals or firms carrying

goods across the border temporarily, there should be an ambitious temporary
admissions arrangement.

19. In a similar way to the role envisaged for the Joint Committee under the previous
Protocol, the Committee would, before the end of the transition period, adopt
decisions establishing the detailed rules for the implementation of these customs
arrangements.

20. The UK and the EU should continue to apply their own legislation with respect to VAT
and excise in their respective territories, with the UK’s legislation no longer subject to
the EU’s VAT and excise legislation at the end of the transition period. The proposal
would establish that import VAT and excise duty arising on goods moving between
Ireland and Northern Ireland should not be paid or accounted for at the border and
the administration of VAT and excise will not give rise to checks or controls at the
border. The UK and the EU should cooperate to minimise evasion and ensure
payment of the tax in the country where it is due and the Joint Committee should
make decisions about any arrangements for that cooperation.

21. Alongside our formal proposals, the UK Government would aim to support the market
for intermediaries, on the expectation that many traders will use customs brokers,
hauliers, freight forwarders and fast parcel operators. To boost the intermediaries
market serving the island of Ireland, and respond to increased demand, the
Government would put in place a package of interventions, for example grant
schemes in the sector.

Conclusion

22. Taken together, these measures correspond to the core aims put forward by both the
UK and EU. They constitute a proposal that: fulfils the Belfast (Good Friday)
Agreement and avoids the need for checks or infrastructure at the border; maintains
the integrity of the EU Single Market; supports the economy on the island of Ireland;
preserves intact the UK customs territory; and provides for an extended transition and
appropriate mechanisms for consent where Northern Ireland is bound by EU law. It
is, as such, a proposal for an agreement which should be acceptable to both sides.