Written evidence submitted by Katy Hayward, Milena Komarova and David Phinnemore (UNF0011)

Unfettered Access: , Northern and customs arrangements after transition: Other issues and challenges arising from the implementation of the Protocol Evidence submitted by Katy Hayward, Milena Komarova and David Phinnemore1

Summary

The Protocol on Ireland/Northern Ireland annexed to the Withdrawal Agreement constitutes an extraordinary document which has profound significance for both the UK and the EU. The UK has effectively allowed part of its internal market to be subsumed under a different customs regime and a different single market. The EU sees the Protocol as entailing deep risks for its single market and so will be strict regarding the enforcement of the new rules for goods moving across the Irish Sea from into Northern Ireland.

The Protocol can be expected to determine the conditions of Northern Ireland’s economic and regulatory environment for the foreseeable future. It gives rise to a situation in which Northern Ireland will be caught in the awkward position of having to apply EU rules whilst being part of a UK that is increasingly detached from the EU. Yet the Protocol is now in the care of the UK-EU Joint Committee with the potential of recourse to the Court of Justice of the EU. The Protocol is an agreed document and, from an EU perspective, not subject to renegotiation; that said, it may be superseded in whole or in part by a subsequent UK-EU agreement. Flexibilities may be sought from the EU in its application, but they must focus on Northern Ireland’s ‘specific circumstances’ rather than on the need to reduce friction in the movement of goods. This submission addresses: the consequences of the Protocol, its enforcement, its implications for governance, and its potential disapplication.

The Protocol puts Northern Ireland in an internationally unique position 1. The Protocol on Ireland/Northern Ireland falls in the category of ‘specific solutions’ for Northern Ireland that had been identified by the UK-EU Joint Report of December 2017 as one potential scenario for avoiding a hard border on the island of Ireland. 1.1. As a consequence, Northern Ireland is placed in a highly unique position by the Protocol vis-à- vis both (a) the rest of the UK and (b) the EU. It is also placed in a unique position in international trade terms, not least given that it is nominally in one customs territory (the UK) but applying the rules of another (the EU). 1.2. This position gives rise to practical changes to be incorporated in the movement of goods into, via and out of Northern Ireland. The unique arrangements for Northern Ireland arising from the Protocol also give rise to ‘other issues and challenges’. In identifying a few of these, we hope to illuminate some points that are of serious concern for the economic and political stability of Northern Ireland and that need to be addressed as a matter of urgency. 1.3. At the moment, there is a danger that the ‘specific solutions’ as set out by the Protocol will lead to a situation in which Northern Ireland is viewed by both the UK and the EU primarily as a ‘risk’ rather than as a common concern and responsibility. This must be avoided. 1.4. The Protocol’s implementation should be progressed in light of its overall intention, i.e.:

1 This evidence is based on research we have conducted. We submit this evidence in a personal capacity and it does not reflect the views of our employer, Queen’s University Belfast. We are happy to provide oral evidence if called. ‘to address the unique circumstances on the island of Ireland, to maintain the necessary conditions for continued North-South cooperation, to avoid a hard border and to protect the 1998 Agreement in all its dimensions’ (Article 1.3, Protocol)

What the Protocol means in practice 2. The Protocol is an international legal text that can be expected to determine the conditions of Northern Ireland’s economic, regulatory, rights, etc. environment for the foreseeable future. 2.1. Irrespective of the UK-EU relationship following the end of the transition period, Northern Ireland will remain de facto in the EU’s single market for goods and subject to the rules of the EU’s customs union and trade defence instruments. 2.2. The continued application of over 280 EU legislative acts will ensure that Northern Ireland is aligned with key elements of the EU’s acquis, including in such areas as chemicals, food, and machinery. EU measures on VAT and excise will also apply in Northern Ireland. 2.3. In addition to rules about the production of goods, the ‘necessary conditions for continued North-South cooperation’ are also to be maintained by the Protocol, including ‘in the areas of environment, health, agriculture, transport, education and tourism, as well as in the areas of energy, telecommunications, broadcasting, inland fisheries, justice and security, higher education and sport’. This implies additional continued regulatory alignment. 2.4. The European Commission’s updated Brexit preparedness notices make it very clear that the Withdrawal Agreement and the Protocol differentiate between the rules which will apply to Great Britain (GB) (as a non-member state) and Northern Ireland (where EU rules will apply) across a wide range of sectors. For example, on food: ‘The IE/NI Protocol provides that EU food law applies to and in the in respect of Northern Ireland.’ 2.5. It also means that EU rules will apply on goods moving from GB into Northern Ireland. For example, on excise duties: ‘Transactions involving movements of goods between Northern Ireland and the other parts of the United Kingdom will be regarded as imports or exports for the purpose of EU rules on excise.’ 2.6. If – as the negotiating mandates of the EU and UK for the future relationship indicate – the trajectory is for growing regulatory distance between the two, this only increases the scope of divergence between Northern Ireland and GB and, thus, the need for checks and controls.

What the Protocol means for governance of Northern Ireland 3. The Protocol on Northern Ireland/Ireland in the Withdrawal Agreement adds to the pre-existing complexity of the governance arrangements for Northern Ireland. 3.1. It does this by: (i) putting Northern Ireland in a different regulatory zone from the rest of the UK and (ii) ensuring that different customs and VAT procedures will be required in Northern Ireland compared to the rest of the UK from the end of the transition period. 3.2. The Protocol means that Northern Ireland, although outside the EU, will continue to have legal obligations towards the EU. To be more precise: the UK in respect of Northern Ireland will continue to have obligations to the EU. 3.3. Brexit means a fundamental change in the system of governance in the UK. Law, policy and practice are being adjusted to exclude the institutions and processes of EU integration. Northern Ireland will having to apply EU rules whilst being part of a UK system that is increasingly detached from the EU. 3.4. The position that Northern Ireland will be in following transition (i.e. under regulations coming from the UK and from the EU) raises unique challenges for its devolved institutions. 3.5. This is in a context where the NI Assembly withheld its legislative consent to the powers taken by the UK government in the Withdrawal Agreement Act (2020) in order for it to be able to legislate in areas within devolved competence. 3.6. Most of the UK legislation that will affect Northern Ireland regarding the implementation of the Protocol will come through the use of Statutory Instruments in Westminster, and through the use of the negative procedure. This gives Northern Ireland’s elected representatives (including MPs) no chance of being able to amend that legislation if they object to it or have concerns. 3.7. In the New Decade, New Approach (NDNA) document (January 2020), the UK Government states it would ‘welcome close engagement with a restored Executive on Northern Ireland’s priorities in the next phase [of Brexit]’. It also promises to consult with the Executive on its future trade policy. There is as yet no clarity on what such engagement will entail.

Implementing the Protocol 4. The EU sees the full and effective operationalisation of the Protocol as demonstrating the UK’s trustworthiness in delivering on its legal obligations and as such a test case for the implementation of any future deals. 4.1. The UK is responsible for ‘implementing and applying the provisions of Union [EU] law made applicable’ by the Protocol in Northern Ireland (Art 12(1)). 4.2. The Protocol requires close cooperation between UK authorities and the European Commission to monitor compliance with EU state aid and competition law in Northern Ireland. 4.3. The Protocol also means there will be ongoing jurisdiction of the Court of Justice of the (CJEU) over UK actions with regard to EU law in Northern Ireland and relevant EU law will continue to have direct effect in Northern Ireland. 4.4. The EU has made it clear that it expects the implementation of the Protocol to mean that checks and controls are properly enforced on the movement of goods between Northern Ireland and GB from the end of transition. For example, the Commission's statement after the first meeting of the Joint Committee barely concealed concerns: ‘There is an urgent need to... proceed with the necessary measures, such as preparing for the introduction of customs procedures for goods entering [NI] from [GB].’ 4.5. This will require the imposition of new measures and capacity for monitoring the movement between GB and Northern Ireland of goods (and control of that movement) by the end of the transition period. 4.6. In the best case scenario, businesses in the UK would be prepared and trained for navigating the Irish Sea border, customs authorities’ facilities and capacity to manage the change of status in that border would be being rapidly enhanced, the details of authorised economic operator systems appropriate for managing the Irish Sea border would be being outlined, and a clear timetable for the rollout of the new system would be known. Enforcing the Protocol 5. Article 12 of the Protocol addresses its implementation, supervision and enforcement and it makes it clear that the physical presence of representatives of the EU will be facilitated by the UK. 5.1. Article 12 states that ‘Union representatives shall have the right to be present during any activities of the authorities of the United Kingdom related to the implementation and application of provisions of Union law made applicable by this Protocol, as well as activities related to the implementation and application of Article 5 [i.e. customs, movement of goods]’. 5.2. In agreeing the Protocol, the UK has made the commitment to ‘facilitate such presence of Union representatives and shall provide them with the information requested’. 5.3. The Protocol notes that ‘the practical working arrangements’ regarding the above-mentioned ‘rights of Union representatives’ are to be first proposed by the Specialised Committee on the Protocol and subsequently determined by the UK-EU Joint Committee. This implies that the question of the EU’s technical presence is not a matter of whether it will occur but how. It also shows that the decision is to be a joint UK-EU one. 5.4. Although the Protocol does not specify what ‘activities’ relating ‘to the implementation and application of provisions of Union law’ are covered, it is clear that they relate at minimum to the functions of customs authorities, i.e. relating to the flow of goods between different customs regimes. 5.5. Given that the flow of goods between GB and Northern Ireland will come under the same terms as the movement of goods from a third country into the EU, it may be assumed that the Protocol allows at the very least for the presence of EU representatives alongside those of the UK authorities enforcing rules regarding the movement of goods across the Irish Sea. 5.6. The type of personnel involved in the movement of goods would include customs officers and veterinary staff. The scale of activities is particularly complicated when it involves animal and plant products. There is also the matter of fish and other aquaculture products. The type of activities involved would include everything from documentary checks, to physical inspections to laboratory tests. Such activities would take place, typically, at the point of entry, i.e. ports and airports, and entail specialised facilities.

An EU presence in Northern Ireland 6. The EU’s view is that the non-effective implementation of the Protocol in Northern Ireland would pose a potential risk to the single market and therefore the EU can be expected to utilise its right to be present. 6.1. Evidence from elsewhere shows that there is no clear model of what EU presence will necessarily look like, not least given the uniqueness of the arrangements for Northern Ireland. 6.2. It is commonplace for there to be joint enforcement actions on customs between EU and non- member states, e.g. Switzerland. There are also instances where customs officers from EU and non-EU administrations work together, e.g. on a specific anti-smuggling operation. 6.3. Often, it is the customs authorities of the neighbouring EU member-states which act as the ‘Union representatives’ on joint operations with non-member states. If this were to happen in the case of the Protocol, Ireland’s Revenue Commissioners would be the agents involved; but this would be extremely politically sensitive in Northern Ireland and not a ‘simple’ solution. 6.4. It is also quite usual for the EU to work cooperatively on customs enforcement with third countries, e.g. its customs cooperation and mutual administrative assistance agreements. 6.5. This serves as a reminder – even aside from Protocol implementation – that the interoperability of border management systems (including data exchange) and cooperation between the UK and its EU neighbours in border management after the end of transition will be vital. 6.6. An interesting comparison can be made with Turkey, which is in a customs union with the EU. Monitoring arrangements as set out in the 1995 Decision establishing the EU-Turkey Customs Union are not as extensive as in the Protocol on Ireland/Northern Ireland. But implementation of the EU-Turkey Customs Union has its difficulties. The EU potentially sees a more hands-on approach to Northern Ireland (which is also de facto part of the single market, at least for goods) as a means of avoiding such issues.

The UK-EU bodies overseeing the implementation of the Protocol 7. The governance mechanisms contained within the Withdrawal Agreement include bodies that will oversee the implementation of the Protocol and will thus have a crucial part to play in the post- Brexit governance of Northern Ireland: the UK-EU Joint Committee, the Specialised Committee on issues related to the implementation of the Protocol on Ireland/Northern Ireland, and the Joint Consultative Working Group. 7.1. The Joint Committee carries an extraordinary responsibility when it comes to keeping under constant review three dynamic processes. 7.1.1. Firstly, relating to the movement of goods to and from Northern Ireland, according to Article 6(2) of the Protocol, it is to review the facilitation of trade within the UK. 7.1.2. Secondly, it has the competence to review the application of the rules relating to VAT and Excise as set out in the Protocol (Article 8). 7.1.3. Thirdly, relating to cross-border cooperation on the island of Ireland, according to Article 11(2) of the Protocol: ‘The Joint Committee shall keep under constant review the extent to which the implementation and application of this Protocol maintains the necessary conditions for North-South cooperation.’ 7.1.4.This means that the review role of the Joint Committee is potentially pivotal to the future governance of Northern Ireland, including in relation to its position vis-à-vis both Britain and Ireland. 7.2. Northern Ireland’s direct input to these UK-EU bodies overseeing the Protocol will be limited. 7.3. The UK government committed in the NDNA document to ‘ensure that representatives from the Northern Ireland Executive are invited to be part of the UK delegation’ in meetings of the Joint Committee and the Specialised Committee. It specifies that these invitations will happen only in instances where the Committee concerned is discussing Northern Ireland-specific matters and which are ‘also attended by the Irish Government as part of the European Union’s delegation’. 7.4. The North/South Ministerial Council and the Belfast (Good Friday) Agreement’s cross-border implementation bodies will be able to make proposals to the Specialised Committee concerning the implementation and application of the Protocol. 7.5. Many organisations in Northern Ireland have plentiful experience of engaging with specific EU institutions and bodies. These relationships will need to be fostered and nurtured, rather than diminish, with the full entry into force of the Protocol following the transition period. 7.6. However, as a sub-national region, the representation of Northern Ireland’s interests to the EU will come primarily through the UK government. Ultimately, the future of Northern Ireland’s relationship with EU institutions will therefore be shaped by what the UK government in London is prepared to allow de facto in the practical implementation of the Protocol and future relationship agreements.

Can the Protocol be renegotiated or disapplied? 8. The Government has committed in the NDNA document to negotiate with the EU ‘additional flexibilities and sensible practical measures across all aspects of the Protocol’; however, it is unclear as to what these ‘flexibilities’ might be and they will not constitute ‘renegotiation’. 8.1. There is a risk that the UK pushing for ‘stretch’ from the EU to ‘maximise the free flow of trade’ when it comes to implementing the Protocol will be seen as increasing the liability of Northern Ireland to the EU’s single market and customs union. 8.2. The EU position is that it has already shown enough ‘flexibility’ on Northern Ireland by agreeing to the Protocol and the unfettered access of NI producers to the single market. Where additional accommodation could potentially be found is in respect of the fragility/sensitivities of Northern Ireland’s ’specific circumstances’, not in order to protect the UK internal market. 8.3. Article 13(8) of the Protocol allows for the Protocol to be superseded in whole or in part by a subsequent agreement between the Union and the United Kingdom. However, the ‘thinner’ the future relationship between the UK and the EU, the less likely it is that future UK-EU agreements will supersede much of the Protocol. 8.4. Northern Ireland’s small size and unique circumstances mean that it could aim for exemptions from certain legislation, but this would be in the medium to long term and in relation to developments in the applicable EU acquis, rather than in the application of agreed pre-existing EU legislation. 8.5. The Protocol does allow for the disapplication of Article 5-10 in certain circumstances. This is following the process for ‘affording or withholding consent’ from Northern Ireland in which members of the Northern Ireland Assembly (MLAs) may vote on whether to opt out of alignment with the EU. 8.5.1.This vote will be specifically about the continued application of the Protocol’s provisions on customs, movement of goods, protection of UK internal market, technical regulations etc., VAT and excise, the single electricity market, and state aid. 8.5.2.It is the responsibility of the UK to provide the opportunity for the democratic consent vote in Northern Ireland. This will come within four years after the end of the transition period, i.e. November/December 2024 at the earliest. 8.5.3.A vote of the ninety MLAs present is to be preceded by ‘a thorough process of public consultation’ led by the NI Executive, to include cross-community consultation. 8.6. There are three possible outcomes of the vote: 8.6.1.(i) a vote with cross-community support in favour of alignment [to be followed by another possible vote in eight years’ time]; 8.6.2.(ii) a majority vote in favour of continued alignment but one that does not meet the conditions of cross-community consent [to be followed by public consultation and another possible vote in four years’ time]; 8.6.3.(iii) a majority vote to opt out of alignment, after which there will be a two-year period to agree replacement arrangements, the default being the current UK-EU relationship (and so the earliest Northern Ireland could leave alignment would be at the end of 2026). 8.7. If a majority of MLAs vote to disapply Articles 5-10, the Joint Committee is to make recommendations to the EU and UK on the necessary measures to be put in place instead of Articles 5-10, ‘taking into account the obligations of the parties to the 1998 Agreement’. In this sense, the vote is not a ‘get-out clause’ per se but puts responsibility back in the hands of the UK and EU to negotiate an alternative to a hard border on the island of Ireland. 8.8. As such, although the Protocol determines the rules that will continue to apply in Northern Ireland after transition, it also introduces a considerable degree of new uncertainty into that future.

April 2020