Northern Ireland Protocol Bill

The Northern Ireland Protocol (the Protocol) is part of the UK’s Withdrawal Agreement with the EU and set out special arrangements for Northern Ireland, so that the island of Ireland remained border-free.

A Bill making changes to the Protocol was introduced on 13 June. The Government also published a summary of its legal position on the Bill , and a policy paper outlining its proposed solutions to solving issues with the Protocol on the same day. The Bill will have its second reading on 27 June.

The Foreign Secretary said the Government’s preference remains to reach a negotiated outcome with the EU, but that the EU’s current proposals are not able to address the Government’s “fundamental concerns” over the Protocol.

What does the Bill do?

The legislation empowers ministers to disapply the Protocol and relevant parts of the EU-UK Withdrawal Agreement in domestic law, as well to make new domestic law in place of what is set out in the Protocol.

Ministers can do this for a wide range of purposes including safeguarding “social or economic stability in Northern Ireland”, “the territorial or constitutional integrity of the United Kingdom”, the “functioning of the Belfast Agreement”, and various other purposes including health, welfare and environmental interests.

The only parts of the Protocol that will be protected in their current form are Articles 2 (individual rights), 3 (the Common Travel Area) and 11 (North-South co-operation).

There are five specific areas in which the Bill empowers ministers to change the application of the Protocol:

  • The movement of goods: Removing checks and paperwork on so called “green lane” goods. These are goods moving from Great Britain (GB) to Northern Ireland (NI) that are destined to stay in NI and are not at risk of moving into Ireland/the EU.
  • The regulation of goods: Creating a new dual regulatory system where NI companies can choose to apply the EU or the UK’s regulatory regime for goods.
  • VAT and excise: Allowing changes to VAT and excise rates in GB to be applied to NI also (at present the EU’s VAT rules apply in NI).
  • The governance of the Protocol: Removing the jurisdiction of the Court of Justice of the EU (CJEU) which currently has a role in enforcing EU rules and settling disputes over the Protocol.
  • State aid/subsidy control: Bringing Northern Ireland fully under the UK’s new subsidy control regime. It currently follows the EU’s state aid regime.

For full details of the Bill see Library BriefingNorthern Ireland Protocol Bill 2022-2023.

How has the EU responded?

The EU has responded to the UK Government’s announcement it would introduce the Bill. It said that, should the UK decide to “move ahead with a bill disapplying constitutive elements of the Protocol” then the EU will “need to respond with all measures at its disposal”.

The EU said it is ready to continue discussions with the UK “to identify joint solutions within the framework of the Protocol” but added that the potential of the flexibilities it has already offered “is yet to be fully explored” by the Government.

European Commission response and legal action

After the Bill was published on 15 June, the European Commission announced it was moving forward with the legal action against the UK it first launched in March 2021. The Commission had paused these infringement proceedings in July 2021, while it pursued negotiations with the UK. The Commission also announced it was launching two new infringement proceedings against the UK for not supplying the EU with trade statistics data for Northern Ireland, as required under the Protocol, and for not applying the EU’s sanitary and phytosanitary (SPS) rules for goods entering Northern Ireland.

In addition the Commission published two new position papers on customs and SPS rules, that gave further details of its proposed solutions to ease these checks in addition to the non-papers that it had published in October 2021.

Background

What is the Northern Ireland Protocol?

The Protocol sets out Northern Ireland’s post-Brexit relationship with both the EU and Great Britain. It came into force on 1 January 2021.

The Protocol ensures there are no checks on goods that move between Northern Ireland and Ireland (and the rest of the EU). It does this by applying the EU’s Single Market rules for goods to Northern Ireland, and the EU’s customs rules. This means that goods coming into Northern Ireland from Great Britain must be checked and/or have paperwork to show they comply with the EU regulations.

The Protocol is part of the EU-UK Withdrawal Agreement, an international treaty between the UK and EU which sets out how the UK’s exit from the EU would work. This is separate to the Trade and Cooperation Agreement (TCA) which is the agreement that governs trade and other cooperation between the UK and the EU.

Why is the Protocol still an issue?

Northern Ireland’s Unionist parties, particularly the Democratic Unionist Party (DUP), did not support the Protocol when it was agreed, saying it threatened the territorial integrity of the UK, and the Union between Northern Ireland and Great Britain.

They say it also threatens the 1998 Belfast (Good Friday) Agreement, and the principle that decisions should be taken on a cross-community basis.

Nationalist parties Sinn Féin and the Social Democratic and Labour Party (SDLP), as well as the non-aligned Alliance Party support the Protocol, and say it upholds the Good Friday Agreement by ensuring an open border between Northern Ireland and Ireland.

There have also been issues with the implementation of the Protocol.

Is the Protocol being fully applied?

The UK left the EU on 31 January 2020 and the Northern Ireland Protocol came into force on 1 January 2021. The full details of how the Protocol would operate were only decided by the EU-UK Joint Committee, set up under the UK-EU Withdrawal Agreement, in December 2020.

This gave little time for businesses in Northern Ireland and GB to prepare. The EU and UK agreed therefore, to simplify some procedures for a short period and temporarily suspend the full application of EU law to NI that mandated checks and controls in several parts of the Protocol. These became known as “grace periods”.

Despite these grace periods, problems with moving goods between GB and NI have emerged, and businesses are concerned that these issues will get worse when the grace periods end.

The grace periods have all been unilaterally extended by the UK, without the EU’s agreement. The EU have agreed however, to not take any formal action under the Withdrawal Agreement’s dispute mechanisms, while the two sides continue talks on the Protocol. However this position may change due to the UK’s decision to proceed with the Northern Ireland Protocol Bill.

What’s happened in EU-UK talks?

In early 2021, in response to difficulties businesses and individuals faced that year, the UK asked the EU for flexibility and easements of parts of the Protocol in several areas, such as steel quotas, moving livestock, pets, and medicines. The EU responded with proposals for reducing checks and paperwork, and proposed changing EU regulations on medicines to address issues with their potential availability.

In July 2021 the UK Government published a Command Paper, asking for much bigger changes to the Protocol, including removing the jurisdiction of the Court of Justice of the EU (CJEU) over the Protocol, as well as restrictions on State Aid.

The EU responded to some of the proposals on reducing checks on goods but rejected removing the role of the CJEU. Negotiations continue, but no agreement has been reached.

The UK Government said in early May 2022, if the EU does not show “the requisite flexibility to help solve those issues”, then “as a responsible government we would have no choice but to act”. The Government then announced on 17 May that it would introduce legislation to suspend parts of the Protocol. 

Relevant Library briefings:

Northern Ireland Protocol: Implementation, grace periods and EU-UK discussions (2021-22), 1 June 2022.

This paper looks at how the Protocol has been implemented since it was introduced and the EU-UK negotiations on possible changes to the Protocol throughout 2021 and 2022.

What is Article 16?

Article 16 is an emergency mechanism in the Protocol that either the UK or the EU can use to introduce temporary safeguard measures to protect its economy and society. This is only if the application of the Protocol leads to “serious economic, societal or environmental difficulties that are liable to persist”, or to “diversion of trade”. These measures, however, need to be targeted to directly address the problems they are trying to fix.

It is sometimes said that Article 16 is a means to “suspend” parts of the Protocol. This is not directly stated in Article 16 and is not the purpose of the safeguard mechanism.

In the July 2021 Command Paper, the UK Government said it believed the threshold for triggering Article 16 had been met, but it would not trigger it yet while negotiations continued.

Relevant Library briefings:

Northern Ireland Protocol: Article 16, 26 November 2021.

This paper explains what Article 16 of the Northern Ireland Protocol is and how it should work. It includes reasons why Article 16 might be triggered, what the other party can do to respond if it is, including whether they can take action under the Trade and Cooperation Agreement. It refers to possible scenarios for how the EU might respond to the UK triggering Article 16 that could also apply if the UK Government introduces legislation which overrides parts of the Protocol.

Governing the new UK-EU relationship and resolving disputes, 24 February 2021.

This Insight gives a short overview of what the Withdrawal Agreement and the Trade and Cooperation Agreement say about how the UK and the EU should manage disputes over their implementation. It also links to more detailed analysis of the dispute procedures in these agreements.

How has the recent election in Northern Ireland changed things?

On Thursday 5 May voters in Northern Ireland elected 90 Members of the Legislative Assembly (MLAs) to sit in the devolved Northern Ireland Assembly at Stormont. The Executive – Northern Ireland’s devolved government – is formed once the MLAs are elected.

Sinn Féin won the most seats in the election (27), the first time a nationalist party has been the largest at Stormont in terms of MLAs. This allows them to nominate a candidate for First Minister. The other main nationalist party, the SDLP, gained eight seats.

The DUP, which was the largest party in the previous Assembly “Mandate” (term), is now in second place with 25 seats, meaning it can nominate a candidate for deputy First Minister (despite their titles, the First and deputy First Ministers jointly head the Executive Office). Unionist parties still form the largest “designation” in the Assembly, with the Ulster Unionist Party (UUP) gaining nine seats and Traditional Unionist Voice (TUV) one. Both these parties also oppose the Protocol (in addition, there are two independents who designate themselves as Unionists).

The cross-community Alliance Party of Northern Ireland returned 17 MLAs.

The Assembly met on 13 May but the DUP has blocked the election of a Speaker and deputies, meaning the Assembly cannot conduct any other business, including the nomination of a First and deputy First Minister and other Executive ministers. A caretaker Executive remains in place but cannot take any new decisions.

The DUP has said it will not allow a Speaker to be chosen or nominate Executive ministers until its concerns about the protocol are resolved. All the other parties in the Assembly, except the TUV, do not support this approach.

On 17 May after the UK Government announced its plans to introduce legislation to change the Protocol the leader of the DUP, Sir Jeffrey Donaldson, said that while the plans were a “good start” they were not sufficient for his party to remove their block on forming a new Executive.

Relevant Library briefings:

Northern Ireland: Key issues, 8 March 2022.

This paper gives an overview of some of the main issues in the May 2022 elections to the Northern Ireland Assembly, including disputes over the Protocol.

Northern Ireland elections: How will an Executive be formed? 6 May 2022.

This Insight explains the process political parties in Northern Ireland follow to agree upon an Executive after Assembly elections, and what happens if they can’t.

Library briefings on international law

Principles of International Law: a brief guide, 21 September 2020.

This paper looks at some of the principles of international law, including how international treaties, such as the Withdrawal Agreement/Protocol are applied in domestic law, and what happens when states breach their international obligations.

United Kingdom Internal Market Bill 2019-21, 14 September 2020 (in particular section 3.6).

This paper looks at the Internal Market Bill when originally introduced in September 2020. The Bill had the potential to lead to a dispute between the UK and the EU as it contained provisions that would have breached the UK’s international obligations to implement the Protocol. These provisions were later removed.


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