The Northern Ireland protocol – can agreement be reached?

All goods entering NI must comply with EU law as set out in the protocol. This includes sanitary and phytosanitary (SPS) rules that apply to animal and plant products.

EU rules don't allow certain products such as chilled sausages, to enter its market. A grace period, where the rules don't apply, has been in place since January 2021 but no long-term solution has been found. Tension around extending grace periods has been coined the “sausage war”.

The UK proposes that only goods moving from GB to NI, where their final destination is the EU, should require checks and paperwork.

Goods moving from GB to NI to remain in NI should not need additional checks and paperwork.

The EU is offering an approximate 80% reduction in SPS checks by way of a streamlined certification procedure and removal of physical checks.

This solution would be dependent upon the UK honouring its commitment to construct permanent Border Control Posts, including packaging and labelling indicating that the goods are for UK consumption alone, and strengthened monitoring of supply chains.

Supermarkets and other stakeholders have raised concerns relating to increased costs, supply chain issues and a lack of choice for NI consumers. For example, a leading retailer will not be running its Christmas food ordering service in Northern Ireland due to concerns it may not be able to fulfil orders.

Back in January 2021, the shelves in Northern Ireland were alarmingly empty in most supermarkets and even bottled water which originated from Great Britain was scarce. Many suppliers in Great Britain stopped delivering to Northern Ireland as the paperwork was considered too cumbersome and even free packets of seeds which accompany gardening magazines have been and continue to be absent because of the protocol. It impacts on daily life in Northern Ireland and may, more worryingly, impact on the supply of medicines with a body representing some UK pharmaceutical companies warning that the EU’s plan to guarantee the supply of medicines from Great Britain to Northern Ireland is unworkable.

Customs declarations are required on all goods moving from GB to NI.

However, the full effect of the protocol has been limited so far due to grace periods in certain areas.

The UK proposes that customs formalities should only apply to goods moving from GB to NI that are destined for the EU.

It would be the primary responsibility of any UK trader moving goods to NI to declare whether the final destination of those goods was NI or Ireland.

The EU is proposing to introduce a kind of red/green “traffic light” system for goods, where the definition of goods “not at risk” is expanded.

With this arrangement, the EU estimates that customs paperwork could be reduced by 50%.

Additional paperwork can be costly for businesses.

Concerns have also been raised around GB exporters failing to comply with EU origin rules when importing into the EU. This could lead to enforcement actions by EU authorities.

NI is part of the EU's internal market and therefore the EU's pharmaceutical regulatory system for medicines. However, the grace period means that there is currently no risk to supplies in terms of the movement of medicines from GB to NI.

The UK Government has proposed removing medicines from the protocol entirely.

The EU is offering to change its own rules on medicines, to guarantee that medicines licensed in GB can flow to NI.

The EU has been prepared to make some significant concessions to resolve the situation, including permitting GB to keep their regulatory compliance functions where they are currently located. Concessions also include placing medicines which are centrally approved in the EU, via the EMA procedure, on the NI market, without any further formalities.

In effect, the protocol subjects Great Britain to a “dual regulatory regime” in respect of the placing of medicines on the Northern Ireland market, with manufacturers and distributors in Great Britain being forced to comply with the regulatory requirements and obligations of Great Britain and Northern Ireland, respectively.

The onerous regulatory burdens posed by the protocol are of paramount concern for Great Britain based medicinal manufacturers and distributors, particularly suppliers of generic medicines which are subject to high volume production at low cost. The complex practicalities arising from the transfer of regulatory compliance functions (including marketing authorisation holders and batch testing) to Northern Ireland or the EU, and associated expense, will inevitably discourage the supply of medicines to the NI market, with many industry stakeholders having voiced their intentions of pulling out of the Northern Ireland market completely, should resolution not be reached imminently.

With indicators by Informa Pharma Intelligence showing that some companies are due to withdraw 90% of their products, it is clear that the small commercial margins within which some companies operate, do not allow for added complexities in the supply chain. According to the BBC, these potential hurdles have already triggered change, with 910 medicines so far being notified for withdrawal. The Health Department has been notified of a further 2,400 at risk.

Annex 2 of the protocol, lists all of the required pieces of EU legislation that continue to apply to NI to keep it aligned. Further, NI will need to keep pace with future changes/updates.

The UK Government has stated that “where EU law is applied or replicated in Northern Ireland under a rebalanced settlement, there should be more robust arrangements to ensure that, as rules are developed, they take account of their implications for Northern Ireland – and provide a stronger role for those in Northern Ireland to whom they apply.”

The EU is proposing enhanced engagement with NI stakeholders and authorities. The proposed solution includes:

• Establishing a structured dialogue between NI stakeholders and the Commission.
• Participation of Stakeholders at the Specialised Committees.
• A stronger link between the NI Assembly and the EU-UK Parliamentary Partnership Assembly.

There have been reports referring to a “democratic deficit”. Northern Ireland is not part of a Member State but must adopt a significant body of EU rules without having any formal opportunities to influence EU policy.

The protocol essentially states that that the ECJ has jurisdiction to rule on matters of EU law in NI.

The relationship between the UK and the EU should not ultimately be policed by the EU institutions including the ECJ.

The dispute settlement process should return to a normal treaty framework, with governance and disputes managed jointly between the UK and EU and disagreements ultimately resolved through international arbitration.

The EU has not put forward any proposals in this area.

In practice, the ECJ’s role in resolving disputes under the protocol has not proved hugely significant for Northern Ireland businesses to date.