Post-Brexit: EU and UK Agree on Certain Provisions Concerning Northern Ireland

On 7 December 2020, the co-chairs of the EU-UK Joint Committee, European Commission Vice-President Maroš Šefčovič and the UK Chancellor of the Duchy of Lancaster, the Rt Hon Michael Gove, held a political meeting to address the outstanding issues related to the implementation of the Withdrawal Agreement. Hong Kong businesses should be aware that the aim of the meeting was to ensure that the Withdrawal Agreement, in particular the Protocol on Ireland and Northern Ireland, will be fully operational at the end of the transition period, i.e., as of 1 January 2021. The Protocol protects the Good Friday (Belfast) Agreement in all its dimensions, with a view to maintaining peace, stability and prosperity on the island of Ireland.

The Joint Statement by the co-chairs of the EU-UK Joint Committee included the announcement that an agreement with regard to the Protocol on Ireland and Northern Ireland, in principle, has been reached in the following areas, amongst others: border control posts/entry points specifically for checks on animals, plants and derived products, export declarations, the supply of medicines, the supply of chilled meats, and other food products to supermarkets, as well as a clarification on the application of state aid under the terms of the Protocol.

The parties also reached an agreement in principle with respect to the decisions the Joint Committee has to take before 1 January 2021. This concerns the practical arrangements regarding the EU's presence in Northern Ireland when UK authorities implement checks and controls under the Protocol, determining criteria for goods to be considered “not at risk” of entering the EU when moving from Great Britain to Northern Ireland, the exemption of agricultural and fish subsidies from State aid rules, the finalisation of the list of chairpersons of the arbitration panel for the dispute settlement mechanism so that the arbitration panel can start operating as of next year, as well as the correction of errors and omissions in Annex 2 of the Protocol. 

This agreement in principle and the resulting draft texts are now subject to the respective internal procedures in the EU and in the UK. Once this is done, a fifth regular meeting of the EU-UK Joint Committee will be convened to formally adopt them. Hong Kong businesses may expect this to take place in the coming days and before the end of the year.

In other news related to Northern Ireland, on 1 December 2020, the European Commission published new rules on identification of economic operators in Northern Ireland once the transition period ends on 31 December 2020. These new rules result in the European Union’s excise duty rules no longer applying to the UK, but continuing to apply to Northern Ireland under Article 8 of the Northern Ireland/Ireland Protocol.

Hong Kong businesses will already be aware that at the end of the transition period, the EU rules on excise duties will no longer apply to the United Kingdom. However, in accordance with Article 8 of the Protocol on Ireland/Northern Ireland, which is part of the Withdrawal Agreement, EU rules on excise duties will continue to apply in Northern Ireland after the transition period as regards goods so as to avoid a hard border between Ireland and Northern Ireland.

The movement of excise goods between the EU and Northern Ireland will, therefore, be treated as intra-EU movements. Consequently, for economic operators established in Northern Ireland intending to move excise goods under duty suspension arrangements to and from Member States, it is necessary to be registered and authorised in SEED as well as use the Union excise procedures and the EMCS.

Further, the rules set out that economic operators established in Northern Ireland intending to move excise goods under duty suspension arrangements to and from Member States, require a Country Code (as set out in Regulation 684/2009). The Country Code that must be used is the code ‘XI’.

Please click on the following hyperlink for more information on the published measure: Commission Implementing Regulation 2020/1811 of 1 December 2020.