Let's examine why NI businesses WIN big from the NI Protocol and how the Border works today
NI Ireland business gets to be the only region that best of both worlds. In the UK and - somehow - in the EU Single Market. Northern Ireland businesses still win, it's just that England, Scottish and Welsh businesses lose.
Please allow us to explain.
Terminology sorted Let's get the language straight first:
UK = United Kingdom of Great Britain and Northern Ireland
GB = Great Britain without Northern Ireland (aka England, Wales and Scotland or the UK mainland)
NI = Northern Ireland
The Republic of Ireland = The island of Ireland without Northern Ireland = Eire
A special situation Very early on in the negotiations ahead of the United Kingdom’s withdrawal from the EU, both the United Kingdom and the EU acknowledged the unique situation of Ireland and Northern Ireland. They agreed that a specific solution was needed to reconcile the different interests at play. The WINNER: Northern Ireland
This solution was found benefits Northern Ireland in four ways:
Avoids a hard border between Ireland and Northern Ireland, and safeguards the all-island economy and the Good Friday (Belfast) Agreement in all its dimensions;
Preserves the integrity of the EU’s single market, along with all the guarantees it offers in terms of consumer protection, public and animal health, or combatting fraud and trafficking,
Maintains Northern Ireland in the UK customs territory so that it may benefit from future Free Trade Agreements (FTAs) that the UK may conclude with third countries.
No admin from NI -> GB
N.I has it all: Single Market Access without being part of EU
EU Customs Union - EU Singe Market and Member States explained in one picture This means that Northern Ireland gets to follow EU Customs Rules without being part of the EU Customs Territory. It gets full access to the Single Market of the EU without being part of the EU. It gets access to some 450 million citizens (including unhindered access to the Republic of Ireland) without any Free Trade Agreement having to be signed.
Part of the UK Customs Territory At the same time, it gets to be part of the UK Customs Territory. So no need for any controls or checks getting into your own territory, at least in theory (what to do with goods coming from the EU Single Market - how to check that they comply with UK rules?). It can also benefit from Free Trade Agreements that the UK concludes. (what about EU trade agreements, do they also apply? Can NI benefit from the best of both worlds? If so, does this means that it is OK to bring in products at a lower rate of duty into Belfast than it would cost to get these goods into Dublin? Can you then just ship them across from Belfast to Dublin without any tax adjustment?) Just sit it out and reap the rewards Northern Ireland's luck does not depend on any further agreement, like a free trade agreement. The Protocol on Ireland and Northern Ireland will become applicable at the end of the transition period. It was conceived as a stable and lasting solution, and it can be expected that it will apply alongside any agreement on the future partnership. Overall, that's what I call lucky. Or is it? Let's examine a little closer: What has been agreed in the Protocol on Ireland and Northern Ireland 1. EU rules for Products & Union Customs Code Northern Ireland will remain aligned to EU rules related to goods and the Union's Customs Code will apply to all goods entering Northern Ireland. This avoids any customs checks and controls on the island of Ireland. 2. Controls will take place from GB -> NI Necessary checks and controls will take place on goods entering Northern Ireland from the rest of the United Kingdom, including for example, Border Inspection Posts to ensure that the necessary sanitary and phytosanitary (“SPS”) controls are carried out. 3. EU Customs Duties apply EU customs duties will apply to goods entering Northern Ireland.
If goods are not at risk of entering the EU's Single Market, the UK tariff will apply. No customs duties will be payable, however, if it can be demonstrated that goods entering Northern Ireland from the rest of the UK are not at risk of entering the EU's Single Market.
How does the GB - NI border work in practice today ?
Today, electronic documents will need to be completed. This is to achieve customs control, the UK has agreed with the EU to ensure that all goods are presented and declared to customs that travel between GB and NI.
To do this in an electronic format as much as possible, we need to understand a lot of abbreviations. These describe tools and rules that need to be met. At the very least, we need to understand:
Under the “Goods Vehicle Movement Service” (GVMS) system, hauliers or the owners of the freight can oblige to pre-lodge three types of electronic paperwork before getting on a ferry from British ports such as Liverpool or Cairnryan in Scotland to Northern Ireland. There are three sets of documents that may have been submitted before one can embark the ferry:
The first piece of documentation that suppliers must complete is an import declaration form, which includes the customs commodity code or codes for any items being carried to Northern Ireland.
Second, the provider may need to submit a safety and security statement, which is presently waived for all items traded in the EU's single market.
Suppliers will then have to furnish their truckers with a transit accompanying document (TAD) which must stay with the vehicle at all times so the EU can be assured that the cargo that leaves Great Britain is the same as the one that arrives
The customs declaration system to be used is called the Customs Declaration Service (CDS). It has to be used for trade with Northern Ireland. If you are using the TSS Service, there is no need to use CDS as TSS is the interface between the two.
HMRC simplify the procedure using the TSS, the Trader Support Service, a one-stop shop for customs clearance supported by support staff, so that the three documents, as necessary, may be collected and pre-registered with the authorities.
At the end of the process, stands a "goods movement reference" number, or GMR, for the haulier to provide to the ferry operator. This will show that the shipment is being processed by customs and will provide port officials with information on how to handle arrivals.
Some cars will be permitted to go to their destination, while others may be compelled to pay tariffs if they continue to the Republic of Ireland, and those delivering food, drink, and animal products will be subjected to health and disease checks.
GB -> NI treated as exports (even though they remain in the UK)
While products travelling from the United Kingdom to Northern Ireland stay in the UK market, they are considered as exports and need this documentation due to the particular procedures included in the Brexit agreement to prevent a border on the island of Ireland.
The price to pay
The government is quoted as: “Our approach, welcomed by businesses, ensures that Northern Ireland will benefit from unfettered access to the whole UK market and that there will be no tariffs for internal UK trade in any circumstances”.
What about the NI -> GB Border?
The procedures will not apply to goods going from Northern Ireland to GB. Easy, no controls, no tax. Hang on, that sounds suspicious. How do we control EU goods entering the UK via the Republic of Ireland? Do we leave that to the Irish?
Consent The EU and the United Kingdom have agreed to create a new mechanism on “consent”, which will give the Northern Ireland Assembly a decisive voice on the long-term application of relevant EU law in Northern Ireland, based on intense discussions between Ireland and the United Kingdom. This consent mechanism concerns the substantive issues of regulatory alignment on goods and customs and other matters. A vote every four years: 2025 for 2027
In practice, this means that four years after the end of the transition period, the Assembly can by simple majority give consent to the continued application of relevant Union law, or vote to discontinue its application, in which case the United Kingdom would notify the EU. In such a case, the Protocol will cease to apply two years later. Every four years thereafter, the Assembly can vote on the continued application of relevant Union law. In case a vote of the Assembly gathers cross-community support for the continued application of relevant Union law, the next vote can only take place eight years thereafter.
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