The provisions of the Northern Ireland Protocol Bill have a significant effect on the pillars of EU law contained in the Protocol. Is the government taking back control of Northern Ireland’s borders and economic governance, or is it starting a full-fledged trade war with the EU?
The UK Government’s pre-announced and highly anticipated Northern Ireland Protocol Bill 2022 (hereafter, the Bill) was published and introduced in the House of Commons on 13 June 2022. It s It is a legally complex document of public international law and constitutional law with provisions which relate to the effects of EU law in Northern Ireland. The EU has strongly discouraged such a legislative step, issuing warnings of a trade war with the UK.
In a nutshell, the legal aim of the Bill is to remove the overriding effects of EU law on commercial and economic governance in Northern Ireland, by not applying a number of key provisions (known as “provisions excluded”) triggering these effects and contained in the Protocol on Northern Ireland (hereafter, the Protocol) and the Withdrawal Agreement 2020. By removing most of the effects of EU law, the government has l intention to restore the legislative authority of the United Kingdom and its system of constitutional and legal remedies in Northern Ireland.
According to the British government, the protocol in its current form does not meet some of its main political objectives, related to the maintenance of peace and stability, agreed between the United Kingdom and the EU during the negotiation of the protocol. The Bill therefore seeks to honor the Belfast (‘Good Friday’) Agreement of 1998 and safeguard the social and economic well-being of the people of Northern Ireland. However, the government says the effects of EU law in Northern Ireland have led to a loss of trade and business within the UK single market, leading to social and economic hardship which could have negative political consequences for implementation of the Good Friday Agreement. .
The legal changes brought about by the bill are far-reaching and significant, attracting attention and criticism, especially from the EU.
Trade, subsidy control and governance
The general provisions of the bill remove the direct effect and applicability of most provisions of EU law relating to trade in goods, subsidy control and governance in the protocol. They also remove the requirement for UK courts in Northern Ireland and the rest of the UK to review EU law and defer to the Court of Justice of the EU when interpreting related matters before them. At the same time, the Bill gives UK Ministers of the Crown significant legislative and enforcement powers over protocol matters. Any loopholes that emerge as a result of non-enforcement of EU law would be replaced by new UK laws and regulations relating to trade in goods, subsidy control and governance.
The Trade in Goods and Customs provisions of the Bill do not apply to most of the key provisions of the Northern Ireland Protocol relating to trade, including the notion of products ‘at risk’ of being introduced in the EU. Instead, the bill provides the legal basis for more flexible routes, such as those discussed in the government’s command document ‘Northern Ireland Protocol – the way forward’ from July 2021. Act introduces the foundations of a dual system of trade in goods with and within Northern Ireland. In such a dual system, producers and traders of goods (industrial products, medicines and agri-food products) could choose to comply only with UK laws and regulations, or with both UK and EU law, depending on whether the goods are for use in the UK or destined for the EU. As a result, there would be ‘green’ and ‘red’ trade channels with Northern Ireland, available depending on the intended destination of the goods, as well as ‘eligible movements’ – . For example, the “green channel” would only be accessible to movements that meet certain criteria, such as trade by traders with trusted trader status.
For the purposes of consumer safety, biosafety and public health, the bill provides for the adoption of secondary legislation adapting the dual system to these particular requirements.
On grant control, the bill provides for a single system in Northern Ireland, governed by the new UK Grant Control Act 2022, and removes the current dual system applying elements of state aid control of the EU.
With regard to governance, the draft law removes the mandatory jurisdiction of the Court of Justice of the EU over the protocol and related provisions of the Withdrawal Agreement. UK judges would only be able to refer questions about EU law to the Court of Justice if they themselves deem it necessary.
The Bill also removes a number of interrelated provisions – the references in the Northern Ireland Protocol to the Withdrawal Agreement, which in turn refer to EU law. This element of the bill seeks to remove a number of EU law triggers in the Withdrawal Agreement, which underpin the application of EU law in Northern Ireland. For example, under these interlocking arrangements, Northern Ireland falls within the customs territory of the EU for matters regulated by the protocol, which gives the EU powers of customs enforcement (this is triggered by a reference in the protocol to a provision relating to the territorial definition in the withdrawal agreement).
Under the bill, ministers have the power to remove other elements of the protocol for specified general purposes, such as ensuring the free flow of trade within the UK, safeguarding welfare or animal, plant or human health, or the abolition of the difference between taxes or customs duties in Northern Ireland and Great Britain. Ministers also enjoy considerable legislative freedom to reinstate and adjust the effects of EU law in Northern Ireland.
On VAT and excise, the bill gives the Treasury powers to ensure that UK VAT, excise and other tax policies can be applied across the UK, including including adjustments and ensuring the same level of taxation in Northern Ireland as elsewhere. from the United Kingdom.
The UK government has said a preferred solution to its complaints about the protocol is a new deal with the EU, suggesting the bill could be leverage to bring about a change in the EU’s status quo position. in the current negotiations.
However, the EU sees the bill as a unilateral measure which it believes violates existing bilateral agreements. In this respect, the EU can decide to retaliate, triggering in the same way unilateral mechanisms, such as the suspension of all or part of the withdrawal agreement or even of the trade and cooperation agreement between the UK and the EU. This could potentially escalate into a trade war, such as the removal of duty-free trade benefits and the imposition of punitive tariffs or other disincentives under recent EU legislation.
If you are interested in more details regarding. If you wish to find out more about the UK Government’s Northern Ireland Protocol Bill, the relevant publications are made with references to Bill 12 and Bill 12-EN. Moreover, you may wish. If you have any concerns about how this might affect your business, if you need more information or clarification, please contact the authors for more information or clarification regarding this review article.