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

Grace periods created to ease implementation of the Protocol

Full details of how the Northern Ireland Protocol (“the Protocol”) would operate were not decided by the EU-UK Joint Committee, set up under the UK-EU Withdrawal Agreement, until December 2020. This gave little time for businesses in Northern Ireland (NI) and Great Britain (GB) to prepare for the new regime. The EU and UK therefore agreed 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”.

Some of the most consequential of these were:

• a three-month grace period for supermarkets and their suppliers, for EU agri-food rules;
• a six-month grace period for supermarkets for EU rules on certain types of chilled meats, such as sausages;
• a one-year grace period for implementing in full the EU’s rules on testing and selling human and veterinary medicines.

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. They are therefore looking for permanent solutions.

UK asks for more flexibilities and extends some grace periods

The UK has since asked the EU for flexibility in several other areas, such as steel quotas, the movement of livestock and the movement of pets.

The UK unilaterally extended the three-month agri-food grace period in March 2021. In response the EU began an enforcement mechanism, raising tensions between the two sides. In June 2021, the UK asked the EU to extend the six-month grace period for fresh meats. The EU granted a further three months, while also announcing several proposals for new Protocol flexibilities.

Flexibilities requested and granted

The EU’s proposed solutions included flexibilities for the movement of guide dogs, the movement of livestock from GB to NI, and a requirement for UK drivers to show motor insurance green cards. The EU also agreed to change the application of EU law to ensure that medicines from GB can move into NI without constraints which might affect supplies in the region.

Article 16

The Protocol includes a safeguard mechanism that allows either party to introduce emergency measures to deal with serious difficulties arising from implementation of the Protocol. This is set out in Article 16.

Unionist politicians in NI have been calling for the UK Government to trigger Article 16 to stop checks and controls on goods entering the region.

Command Paper on ‘the way forward’

On 21 July 2021, the UK Government published a Command Paper. This in part reiterated the Government’s calls for the EU to show more “flexibility” and “creativity”.

Specifically, it suggested the EU could use the “at risk goods” principle under the Protocol for applying tariffs on GB-NI trade to both customs and Sanitary and Phytosanitary (SPS) checks (checks on agri-food, plants and animals). This would differentiate trade based on its destination. Goods that were destined for Northern Ireland would not require customs processes and most SPS checks, while those moving to Ireland would have full customs and SPS formalities which the UK would enforce.

The Government asked for the grace periods to continue indefinitely and for the EU to halt its legal proceedings while the EU and UK negotiated.

The paper proposed some significant new changes to the Protocol, such as asking for the jurisdiction of the Court of Justice of the EU (CJEU) over the Protocol to be removed, as well as restrictions on State Aid. It also requested new flexibilities in areas such as VAT and for medicines to be removed from the scope of the Protocol entirely.

On Article 16, the Government said it believed the threshold for triggering it had been reached but it would not do so yet, hoping for further solutions in the negotiations.

EU reaction

The EU rejected renegotiating the Protocol, pointing to the new flexibilities it had already proposed.

It said, however, that it would continue to engage with the UK, including on the suggestions made in the paper. While it was ready to continue to seek creative solutions, they should be “within the framework of the Protocol”.

On 27 July the EU said it would halt legal proceedings against the UK for breaching the Protocol, “in order to provide the necessary space to reflect on these issues and find durable solutions to the implementation of the Protocol”.

EU publishes detailed proposals in response to Command Paper

On 13 October 2021 the EU published a detailed response to the UK’s Command Paper. It said it would not accept any changes to the CJEU’s role in enforcing the Protocol, and did not respond to UK proposals on changing the Protocol’s provisions on State Aid and VAT.

The bloc did propose some changes to simplify customs checks by expanding the definition of goods “not at risk” to cover more goods and reducing customs formalities, including declarations for those goods.

It also proposed simplified SPS checks for retail goods

The EU said it would agree to GB chilled meats and sausages being sold in NI, but only if they met certification, production and labelling criteria.

Overall, the EU said these proposals would mean the reduction of SPS checks by 80% and customs checks by “at least” 50%, but it appears this would be compared to the full checks mandated by the Protocol, rather than the lighter-touch grace periods regime currently in place.

Lord Frost resigns, Liz Truss becomes UK chief negotiator

In December 2021, Lord Frost resigned from the Government and the Foreign Secretary, Liz Truss, took over his responsibilities as UK chief negotiator for the talks on the Protocol and Co-Chair of the Joint Committee.

Despite an intensification of talks in early 2022 and talk of a “cordial atmosphere” between the two sides, there has been no breakthrough.

UK announces it will pass legislation to override the Protocol

On 17 May 2022 Liz Truss announced that the Government will “in the coming weeks” introduce legislation unilaterally to change the Protocol.

The Foreign Secretary said the Government’s preference remains reaching 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.

She said the legislation will make four main changes to the Protocol, all of which were proposed in the July 2021 Command Paper:

• Remove checks and paperwork on so called “green lane” goods (relating to both customs and SPS controls). These are goods moving from GB to NI that are destined to stay in NI and are not at risk of moving into Ireland/the EU.
• Create a new dual regulatory system where NI companies can choose to apply the EU or the UK’s regulatory regime for goods, removing regulatory checks.
• Allow changes to VAT rates in GB to be applied to NI also (at present the EU’s VAT rules apply in NI).
• Remove 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.

The Foreign Secretary also mentioned “fixing” the State Aid/subsidy control regime, indicating that the proposed law will cover that area too.

The EU responded by saying that if the UK “move ahead with a bill disapplying constitutive elements of the Protocol” then they 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.

May 2022 Assembly elections

Northern Ireland Assembly Elections were held on 5 May. 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. The DUP were the second-largest party with 25 seats.

The Assembly met on 13 and 30 May but the DUP 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.

Proposals for permanent solutions

More permanent solutions to checks and controls on goods moving from GB to NI have been proposed including the UK and EU signing a veterinary agreement and “trusted trader schemes”.

There have also been calls for Northern Ireland’s political institutions and civil society to have a greater say on Protocol-related discussions between the EU and UK.