The UK and European Union have agreed the key principles of a new deal to replace the Northern Ireland protocol. Justin McKenna, Corporate Partner, reviews the Windsor Framework and outline how the new regime will practically affect importers.
The Northern Ireland Protocol is to be replaced by the Windsor Framework, announced by the UK and EU on 27 February 2023. If implemented, the Windsor Framework will have a significant impact on any business importing goods into Northern Ireland from the UK.
The new regime
The key change will be dividing imports from the UK into Northern Ireland into “green lane” and “red lane” products. Red lane products intended for or at risk of distribution in the EU Single Market will have to adhere to EU standards and will be inspected on importation. Green lane products will be those for distribution only in Northern Ireland and will not be subject to customs checks. It is expected that this system will significantly reduce checks on imports.
Importers will be able to apply for ‘trusted trader’ status which will allow them to import goods into Northern Ireland more seamlessly. These arrangements will be facilitated by increased data sharing and market monitoring. Acquiring this status will be crucial for businesses importing goods regularly.
The framework provides that food products imported for consumption in Northern Ireland will be subject only to UK health rules and will not have to satisfy EU requirements. Similar rules will apply to agricultural and gardening products.
EU regulations will continue to apply to red line products imported for use in the EU. It is expected that the Court of Justice of the European Union will continue to have jurisdiction for disputes arising in connection with these products.
Another important change would be to the VAT applicable to goods sold in Northern Ireland. Formerly, the Northern Ireland Protocol applied EU VAT to goods sold in Northern Ireland. The Windsor Framework allows for certain goods, such as energy-saving goods which benefit from a 0% VAT rate in Britain. Similarly, UK alcohol duties will apply to products sold in Northern Ireland.
The UK Government has not yet announced its timeline for approval or implementation of the Framework. It is expected that the new framework may not initially be supported by the Democratic Unionist Party of Northern Ireland and certain groups within the UK Conservative and Unionist Party.
While the Windsor Framework has not yet been formally approved by the UK Parliament, importers should begin preparing for its implementation in the coming years.
Key steps for importers will be to:
- Apply for and maintain trusted trader status
- Clearly define which goods they import are intended to be circulated in the EU, and
- Prepare for increased checks on red lane products imported into Northern Ireland for consumption in the EU
For more information on the likely impact of the Framework’s implementation on your business and operations, contact a member of our Food, Agriculture & Beverage team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.