How the Windsor Agreement changes the Northern Ireland Protocol

And what green lanes, UK-VAT control and the Stormont brake could mean for you

After two years of tense negotiations, the UK and EU have agreed an amendment to the Northern Ireland Protocol – pending official approval. Find out more about the Windsor Agreement in this article.

Why was the Northern Ireland Protocol created?

The NI Protocol created a sea border between Northern Ireland and the rest of the UK. This keeps Northern Ireland and the Republic of Ireland within the same customs territory.

The reason for this is to prevent a land border being created between the Republic of Ireland and Northern Ireland, due to the historical conflict between the two countries.

Under the NI Protocol, all goods that are moving from mainland UK to Northern Ireland must complete an import customs clearance that complies with EU standards.

What are the problems with the NI Protocol?

Northern Ireland is within the United Kingdom, and therefore within the same customs territory. However, the NI Protocol isolates Northern Ireland because of the complications of customs clearance when moving goods between the two regions.

The additional considerations for every change in EU legislations means that Northern Ireland is also experiencing different customs rules to the rest of the UK. This is placing local businesses in a position where it is harder for them to import from and export to the rest of mainland UK.

Political unrest has been rekindled due to these problems, as Northern Ireland’s government feel the NI Protocol undermines their position in the UK. Protesters to the Protocol advise it doesn’t safeguard traders who are only dealing with other UK businesses, and instead applies all EU legislation to them unfairly.

This is what has led to intense negotiations over the last two years between the UK, Northern Ireland’s government, and the European Union.

Previously, Boris Johnson suggested invoking Article 16, whereby the United Kingdom (or the EU) can unilaterally change the NI Protocol to resolve environmental, social, or economic difficulties. The Northern Ireland Bill was introduced to parliament in August 2022  but hasn’t passed into law. Rishi Sunak has confirmed in the last week that this is now unnecessary due to the Windsor Agreement.

How does the Windsor Agreement fix the NI Protocol?

Although the Windsor Agreement is currently awaiting review by Northern Ireland’s government, UK Prime Minister Rishi Sunak and President of the European Commission Ursula von der Leyen are confident that this deal is the breakthrough needed for Northern Ireland.

Rishi Sunak advised in his press conference that the Windsor framework is “about stability in Northern Ireland. It’s about real people and real businesses.”

So, how will the Winsor Agreement serve Northern Ireland?

Green and red lanes for traders

First introduced in Boris Johnson’s Northern Ireland Bill, the concept of green and red lanes is simple:

Green lane traders are able to declare that their goods are only for use within Northern Ireland, and will have fewer import clearance implications.

Red lane traders will need to complete full customs clearance procedures, in line with how the Republic of Ireland need to when importing goods from the UK to the EU.

Reduced checks on essential items

The green lane concept within the Windsor Agreement is particularly beneficial for retailers of food and consumer goods in Northern Ireland, as imports from the mainland will no longer need to have multiple certificates and checks.

Healthcare providers are also due to benefit significantly, as medicines approved for use within the UK are automatically legal for import into Northern Ireland. This allows pharmacies, supermarkets, and hospitals to ensure they can restock with less difficulties.

These reduced checks allow more people within Northern Ireland to get better access to food and medicine at a time when the energy and cost-of-living crisis are impacting supply chains.

UK control on VAT and excise rates

Any changes to UK VAT and excise on goods in the UK will automatically apply to imports into Northern Ireland.

The Stormont brake

The government in Northern Ireland will be able to veto new EU rules in Northern Ireland under the Windsor Agreement, using a mechanism called the Stormont brake.

This aims to bring stability to the government in Northern Ireland by supporting the Good Friday Agreement within the Windsor framework. The Petition of Concern (part of the Good Friday Agreement) allows the legislative assembly to block new laws in Northern Ireland if they do not have cross-community consent. More than 30 members of the assembly have to agree to trigger it.

European Commission Ursula von der Leyen commented on the Stormont break during announcements of the Windsor Agreement, stressing that this was an emergency mechanism and that the European Court of Justice has the final say on any single market concerns.

What’s next for the Windsor Agreement?

The Windsor Agreement needs to be reviewed by the DUP in Northern Ireland, who have refused to create a joined assembly until the issues with the Northern Ireland Protocol have been resolved.

Their advice is that the party will likely assemble on Saturday (4th March 2023) to review the Windsor framework with their legal counsel.

If the DUP agree that the Windsor Agreement is satisfactory, then legal proceedings will begin to pass the framework into law in the UK and the EU.

Will your trade be affected by the Windsor Agreement?

Customs Support provide import and export clearance services across the UK and EU. Our customs consultants  and declarants have helped many businesses like yours navigate Brexit, Northern Ireland Protocol, and the ever-changing landscape of customs.

If your business could use a quick scan to see how the Windsor Agreement could benefit you, contact one of our experts for more information.