Earlier this year I said that Northern Ireland is the Brexit Winner! They get to be the only region that best of both worlds. In the UK and - somehow - in the EU Single Market. With the Guardian's leak of classified information, on how GB-NI Border Controls will work from 2021, my opinion has not changed. Northern Ireland businesses still win, its just that England, Scottish and Welsh business lose.
Please allow me to explain.
Terminology sorted Let's get 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 gets 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 that 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.
What did HMRC do towards the end of June?
The authority presented a first discussion paper to the JCCC on the requirements for border processes on goods moving between GB and NI and asked practical questions and presented ideas on requirements, how to lodge information, identified border points and safety and security obligations and how the Common Transit Convention would work. HMRC said it would “ensure” the new processes would be “light touch via electronic submission” and would “impose the minimum possible burden” on traders.
How will the border work in practice?
The Guardian reported on 2 July 2020 that:
"Electronic documents will need to be completed whether there is a Brexit trade deal or not and will apply to all suppliers. An 11-page slide presentation from HMRC, outlining the new system, states: “To achieve customs control, we need to ensure that all goods are presented and declared to customs.”
NEW: Goods Vehicle Movement Service (GVMS)
Quoting from the Guardian: "Under a new “Goods Vehicle Movement Service” (GVMS) system, hauliers or the owners of the freight will be obliged 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.
The Guardian refers to three sets of documents that may have to be collected:
The first paperwork applying to suppliers is an import declaration form setting out the customs code or codes for all the goods being transported to Northern Ireland.
Second, the supplier will have to complete a safety and security declaration, paperwork that is currently waived on all goods being sold within the EU’s single market".
The newspaper explains further: "Suppliers will then have to provide their truckers with a transit accompanying document (TAD) which must remain with the vehicle at all times so the EU can be guaranteed that the load that departs Great Britain is the same as the one arrives".
HMRC is planning to streamline the system so that the three elements can be collated and pre-lodged with the authorities, who will then generate a “goods movement reference” number or GMR for the haulier to present to the ferry operator.
This will demonstrate that the cargo is being processed by customs and give port authorities information on how to treat arrivals.
Some trucks will be given the green light to their destination, others may have to be processed for tariffs if they are making an onward journey to the Republic of Ireland and those carrying food, drink and animal products will be subjected to health and diseases checks.
GB -> NI treated as exports but are no exports --- WHAT?
The Guardian explains: "While the goods going from GB to Northern Ireland remain in the UK market, they are being treated as exports and require this paperwork because of the unique arrangements made in the withdrawal agreement to avoid 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?
I agree 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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