Back in December 2020, Michael Gove and his then counterpart in the EU, Maroš Šefčovič, reached an agreement on how the notorious Northern Ireland Protocol should henceforth be implemented. The protocol, which affects goods in transit between Great Britain and Northern Ireland – and vice versa – came into effect on New Year’s Day 2021, a little over two weeks later. Crucially, it now affects all goods, regardless of whether consignments will go on to enter the Republic of Ireland or not. Virtually since the protocol came into being, it has been a bone of contention within British political circles as well as – primarily – the unionist business community in Northern Ireland. However, recent reports of a way forward have been published in the Irish press that suggest a simplified process for managing goods in transit across the Irish Sea will soon be possible. Crucially, this may allow for better trade relations between Northern Ireland and the mainland without installing hard border infrastructure between the UK and the Republic while still maintaining the integrity of the EU’s single market.
The whole point of the Northern Ireland Protocol was to protect the single markets of both Great Britain and the EU. Because of Northern Ireland’s special historical status and physical geography, the protocol essentially put up some barriers to the movement of goods between GB and NI, both parts of the UK, of course. Firms that had previously sent goods to customers in Northern Ireland from the mainland found that they needed to complete extensive amounts of paperwork, often facing increased costs for shipping items to the region, as well. Meanwhile, suppliers in the Irish Republic faced very few difficulties in sending goods to customers in the North. Virtually since the deal was signed by the UK government, it has signalled its intent to withdraw from the protocol unless trade friction between Northern Ireland and the mainland could be stablised.
One of the hardest aspects of the protocol that needed to be overcome, therefore, was a crucial demand by Brussels was that UK officials were able to provide the EU with real-time, detailed information about any and all goods movements that happened to be taking place between Britain and Northern Ireland. This was set out clearly in article 12 of the protocol, something that the UK government had signed up to. Indeed, at the time, Mr Šefčovič made it clear in a written statement that London had agreed it would provide adequate equipment and facilities to make the protocol work as well as what he called ‘continuous and real-time access’ to HMRC’s IT systems, databases that were designed to track the movements of goods ‘both on the ground and remotely’.
Progress and Reciprocity
Unfortunately for British firms, such systems did not exist at the time. Consequently, physical paperwork was being used for nearly all classes of goods passing between Liverpool or Holyhead to Belfast. Some unionists claimed that the protocol was, therefore, making it harder for Northern Ireland to trade as a genuine part of the UK. In the region’s autonomous assembly, political stalemate took hold with no elected members sitting and the Secretary of State for Northern Ireland threatening all parties in the region with new elections this autumn unless something was done. However, according to numerous press outlets, nearly two years on from the initial Gove-Šefčovič agreement, the imagined digital system that would allow for goods in transit to be monitored by officials in both trading blocs is finally nearing completion. In turn, this has led some commentators to say that they hope the protocol can work in the interests of the UK as well as the EU and, perhaps more importantly, in an acceptable way for all communities in Northern Ireland itself.
According to one Irish report, dealing with the data-sharing element of the protocol has constituted ‘a long and contentious journey’ for both EU and UK officials. Indeed, it is fair to say that the progress on it has been subject to avoidable delays and disagreements. Nevertheless, the progress made with technology could lead to some of the seemingly intractable problems of the protocol soon being unlocked. Indeed, an unnamed source close to the negotiation team in Ireland is reported to have said that the recent progress that has been made is ‘hugely important’ because it gives the guardians of the EU single market ‘a more robust way of safeguarding the customs union’. The source went on to add that, with only a few more tweaks, it would be possible to see how the agreed technology would also protect the single market, too. “What’s more, it helps to build trust,” the anonymous source said. This is vital in the eyes of many who have been involved in UK-EU relations in recent years which have been marked by an absence of candour. For some, greater trust in each other’s systems will help the EU to move on other things. “The EU has been asking London for this sort of reciprocity [in data systems]… and now, at long last, it is being delivered,” the source is quoted as saying.
Under the 2020 deal signed by the UK government and the EU, it was agreed that EU officials would be granted access to now fewer than five named UK databases. Until now they have not been able to do so on a continuous or real-time basis. Nor have they been able to do so remotely which was also a prerequisite of the system working to the satisfaction of both parties. Now, HMRC has said that it has developed a single IT system that is able to bring the five previously agreed-upon databases together. The bespoke software for EU officials has been given the title of the EU Access System by UK customs officials. It is hoped this will function reliably and allow EU customs officers access to HMRC’s customs declaration service (CDS) directly. This is the UK’s main customs system that is used for declaring goods moving in and out of the country to all overseas territories which, for all intents and purposes under the protocol, includes Northern Ireland. CDS is used to help identify goods that may require physical checks and is also used to collect duty payments for certain commodities.
The EU Access System will also offer unfettered access to the import control system for Northern Ireland (ICS). Focussed on the management of hazardous materials, ICS is currently used to make safety and security declarations as well as risk assessments. The system will also provide access to HMRC’s goods vehicle movement service (GVMS), a system which matches the physical movement of a shipment through a port to its corresponding electronic movement. GVMS does so by matching CDS declarations with the registration number of the truck that is conveying it, for example. Furthermore, EU officials will soon be able to gain access to the transit system for Northern Ireland (NCTS), a system that has only just been digitised. This IT system allows traders to move cargo through a particular territory without stopping. It helps to avoid double payments of duty and to keep customs checks away from ports and other infrastructure. Finally, the new EU Access System will also provide access to the UK’s freight targeting system (FTS). In short, FTS collates ferry manifest information, something that contributes to the intelligence gathering of goods in transit to help identify illicit activities.
Cross-Border Cooperation
According to the most recent reports, EU officials will be able to use the new system to check on individual consignments from any location in the Republic of Ireland – or Brussels for that matter. Indeed, the digital platform should help them to better understand the patterns of goods passing over the Irish Sea that may potentially go on to enter the South. In fact, a drag-and-drop functionality has been designed into the system to make it easier for customs officials to spot anomalies that might deserve closer investigation. If a customs officer thinks that there may be an issue with a particular consignment, then he or she can flag it so that the relevant van or truck is stopped by HMRC as soon as it comes off the ferry in Northern Ireland and, crucially, before it leaves the port of arrival when it would be harder to track. It is hoped that this level of tracking and cross-border cooperation will reassure the EU that the UK is serious about making a success of the protocol despite some of the political manoeuvrings that have surrounded it in recent months.
In the end, the system will only work in a political sense if it works at a technical and practical level. As soon as people who might try to abuse the system for goods in transit between the mainland of the UK and Northern Ireland realise that it is not a viable back door to the EU’s single market, the more the EU is likely to relax about its interpretation of how the whole of the protocol should be implemented. At the moment, both sides’ technical teams seem to be hopeful that the technology will have this desired effect.