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Committee wants more scrutiny of N. Ireland Brexit issues

9 April 2021

The House of Commons European Scrutiny Committee has called on the government to provide it with more information, and in a timelier manner, concerning the December 2020 Brexit agreement with the European Union (EU).

The parliamentary body was referring in particular to information about the UK/EU ‘Joint Committee’ which was set up to manage the Brexit ‘Withdrawal Agreement’. This Joint Committee, the European Scrutiny Committee said in a report published today, has considerable legal and political importance, mainly because of the part of the withdrawal agreement called the ‘Ireland/Northern Ireland Protocol.’

Under this protocol, Northern Ireland remains part of the UK’s customs territory. However, to prevent a ‘hard border’ with Ireland, Northern Ireland must apply the EU’s customs code. Certain EU ‘Single Market’ rules also apply to Northern Ireland.

This means, for example, that the EU can apply import taxes – or ‘tariffs’ – on goods being imported into Northern Ireland from non-EU countries, including Great Britain. The UK/EU Joint Committee oversees the implementation, application and interpretation of these and other rules under the withdrawal agreement. It is co-chaired by, on the UK side, Lord David Frost, and for the EU by a European Commission Vice-President, Maroš Šefčovič, a Slovak politician.

The report published today says the government has provided parliament with information about the decisions of the UK/EU Joint Committee which has been both incomplete and too late. This meant, the parliamentary committee said, it has not been possible to exercise proper democratic scrutiny. The committee’s report repeatedly emphasises the importance of the Joint Committee – especially as it can make legally binding decisions that concern the people and businesses of Northern Ireland.

The European Scrutiny Committee said there is significantly more that the government could - and should - be doing to facilitate democratic oversight.

For example, it called on the government to provide detailed agendas ahead of Joint Committee meetings and to make the minutes of these UK/EU meetings publicly available. The House of Commons committee also asked that government analyses given to parliament about EU legislation relevant to Northern Ireland – known as ‘Explanatory Memoranda’ - should be submitted in sufficient time and with adequate detail for it to consider them before the joint UK/EU committee takes any relevant binding decisions.

The report published today said the government had made statements about the importance of such scrutiny but that without providing the necessary information to facilitate meaningful engagement, those statements are at risk of ringing hollow.

It is important also to state what today’s parliamentary committee report does not cover. The government recently announced that it would unilaterally extend agreed grace periods under which some EU regulations do not have to apply on some goods (such as parcels and plants) moving from Great Britain to Northern Ireland. The government made a similar unilateral announcement on postponing the application of EU food safety and animal health law in Northern Ireland. The scrutiny committee said it would return to these issues once the rapidly changing political and legal context surrounding them had settled.

The European Scrutiny Committee’s report identifies several areas where it says it needs further and better information in order to exercise proper parliamentary scrutiny.

  1. ‘At risk’ goods

The parts of the Northern Ireland Protocol relating to the application of EU tariffs on goods entering Northern Ireland are complex and controversial, the House of Commons report says. ‘At risk’ goods are those imported into Northern Ireland but which may then be ‘at risk’ of ending up in Ireland - and thus avoid the tariffs required of goods entering the EU’s Single Market.

Today’s report says that the Protocol includes a very restrictive definition of goods ‘not at risk’, meaning that EU tariffs are potentially applicable on an indeterminate number of imports into Northern Ireland from Great Britain.

The parliamentary committee report included the following questions for the government in this area:

  • What is the government’s estimate of the total amount of EU tariffs that are likely to be payable on ‘at risk’ goods imported into Northern Ireland from Great Britain? What proportion of this total does the government expect to waive or re-imburse?

  • How would a government-proposed ‘UK Trader Scheme’ (designed to avoid such tariffs) work, and how would EU ‘rules of origin’ affect such a scheme?

  • Why do current HM Revenue and Customs guidelines say that goods brought into Northern Ireland from outside the EU or the UK are not covered by a waiver?

  • How will the planned re-imbursement scheme work for ‘at risk’ goods which incur a tariff but are subsequently shown not to have crossed the border into Ireland?

2. The arbitration panel

If the UK and the EU have disagreements about the Withdrawal Agreement and a resolution cannot be reached through consultations in the UK/EU Joint Committee, they can request the establishment of an arbitration panel drawn from a pool of members named by the UK and the EU.

The House of Commons scrutiny committee notes in its report that the pool of UK members to be appointed to the panel was communicated to it just one day before the list was adopted by the Joint Committee. There had been no communication on this subject at all prior to the list being made available. The scrutiny committee’s questions to the government in this area included:

  • Could the transparency of the process for nominating arbitration panel members be improved?

  • does the role of the arbitrators for Withdrawal Agreement issues compare with the arbitrators’ other role in seeking to resolve disputes under the separate but related agreement known as the ‘UK/EU Trade and Cooperation Agreement’ (which has provisionally been applied since January 1 2021)?
  1. ‘Level playing field’ issues

The UK and the EU interpret the applicability of EU state aid rules under the Northern Ireland Protocol in very different ways, the European Scrutiny Committee report said. It said the committee was concerned about this difference in understanding because it may impact on the willingness of companies to accept subsidies, or of state authorities to grant them.

The report said the EU’s interpretation of the rules could in theory result in the EU intervening with respect to UK subsidies that only have a minimal, or even “merely potential” impact on trade between Northern Ireland and the EU. By contrast, the UK interpretation is that EU intervention would only be permissible if the EU Commission could prove a “real and material impact” on EU-Northern Ireland trade in goods.

The European Scrutiny Committee’s questions in this area included:

  • What is the explanation for this discrepancy in the interpretation of state aid rules under the Protocol between the government and the European Commission and what implications does the government think this will have?

Further information

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