Trade in goods across the island of Ireland together with trade in good between NI and other EU member states is to continue unaffected, with no change at the border, no new paperwork, and no tariffs or regulatory checks.
The Current Position
The UK officially left the EU on 31st January 2020. During 2020 little changed as we were still in the “Transition Period”. However, as of 11pm on 31 December 2020, the transition period ended and the UK entered into a new trading relationship with the EU, under the EU-UK Trade and Cooperation Agreement.
From 1 January 2021, the UK has been considered a 3rd Country who operates a full, external border as an independent nation and is free to strike its own trade deals for buying and selling goods and services around the world.
Regardless of the fact that the UK and the EU have reached a Free Trade Agreement, with the exception of trade from and to Northern Ireland (which is subject to the Northern Ireland Protocol), all goods entering the EU from GB or leaving the EU to go to GB are now subject to customs formalities, effective from 1 January 2021.
Northern Ireland Protocol
In terms of the Northern Ireland Protocol, which came into effect on 1st January 2021 and was designed to avoid a hard border with Ireland whilst ensuring the UK, including Northern Ireland, leaves the EU as a whole, the UK government announced that special provisions will apply.
In terms of GOODS, these special provisions include:
1. Trade in goods between NI & Ireland /NI & EU Member States
2. Movement of Goods – NI to GB
In relation to the movement of goods from NI to GB, the UK Government has committed to guaranteeing, in legislation, unfettered access for Northern Ireland’s businesses to the rest of the UK internal market from 31 December 2020, ensuring that trade from Northern Ireland to Great Britain continues as it does now.
The latest command paper on the NI protocol, issued 10th December 2020, reiterated the UK government’s commitment to unfettered access, stating that the agreement that the UK and EU have reached removes any prospect for export declarations or exit summary declarations for NI goods moving from NI to GB expect in very limited circumstances – i.e. movement of endangered species and diamonds.
That will mean no declarations, tariffs, new regulatory checks or customs checks, or additional approvals for “qualifying goods” to be placed on the UK market.
In terms of ‘qualifying goods’, goods will be qualifying Northern Ireland goods from 1 January 2021 if they are in free circulation in Northern Ireland – that means not under acustomsprocedure before you move them from Northern Ireland to Great Britain.
This qualifying goods regime forms part of a phased approach to implementation of unfettered access designed to:
- avoid disruption
- ensure maximum continuity after the transition period.
It is expected that this definition will be tightened during the course of 2021 and will result in unfettered access being limited to:
- products that are sourced in NI or
- products which are substantially processed in NI, resulting in a change of origin.
3. Movement of Goods – GB to NI
The NI/Ireland Protocol means that UK authorities will apply EU customs rules to goods entering Northern Ireland.
The movement of goods from GB to NI will be treated as an import into the EU. For that reason, full electronic import declarations plus checks and controls in some instances e.g. goods of animal & plant origin, will be required and goods that are cleared through the import process are then in free circulation within the EU – i.e. they can be sold, processed or moved anywhere in the EU without further formality.
The UK Government position remains that there should be no tariffs payable on all internal UK trade.
The latest command paper on the NI protocol, issued 10th December 2020 outlined that it is agreed in principle that the new UK Trader Scheme (UKTS) will allow authorised businesses to undertake that the goods they are moving into Northern Ireland are “not at risk” of onward movement to the EU, and therefore not liable to applicable EU tariffs if preferential rates per the TCA cannot be availed of.
The scheme, which will be open to businesses established in NI or businesses who meet certain closely linked criteria, will include safeguards to ensure that it is not available to those with serious criminal records or existing compliance issues.
The scheme will be focused on goods being sold to, or provided for final use by, end consumers located in Northern Ireland or, for internal UK trade, elsewhere in the UK.
These processes are needed to make sure that tariffs are not paid on trade within the UK and that goods going to Ireland/EU will pay tariffs when they should.
Further detail in respect of this new scheme and how to apply can be found here.
4. Trade in goods between NI and ROW
Trade between NI and RoW is already subject to customs formalities. This will continue.
Northern Ireland is to benefit from any new UK Free Trade Agreements – ensuring the benefits of those agreements are felt right across the United Kingdom.
In respect of the provision of services, unlike trade in goods, Northern Ireland will on a similar footing to the rest of the UK as it is now deemed as a Third Country when trading in services. This will inevitably result in non-tariff barriers which are likely to present challenges going forward.
From a services perspective, there are many issues which remain unresolved.
Of particular interest to the NI tourism industry will be the fact that data adequacy was not included in the agreement, however, a joint declaration published alongside the deal makes it clear that the EU will undertake an adequacy assessment.
A temporary arrangement has been put in place which allows the free-flow of personal data between the UK and EU for a minimum of 4 months (potential extension to 6 months) from January 2021. During this period, it will not be necessary for businesses transferring data between the EU and UK to put in place alternative measures such as standard contractual clauses when transferring data from the EU to the UK.
It is recommended that a wait and see approach is adopted in order to determine whether any further actions will be required in order to safeguard against the interruption to the free flow personal data between the EU to UK.