The Windsor framework, as agreed in principle with the UK government and EU Commission attempts to address some of the issues around the current Northern Ireland protocol.

It specifically addresses the border in the Irish Sea for the movement of goods between Great Britain and Northern Ireland. Under the Framework, there will be two channels for goods entering NI from GB.

Green Lane

A Green Lane will be in place for goods entering NI destined to stay within the UK (‘UK internal trade scheme’). These goods will not be subject to any additional customs formalities or certification requirements when entering NI.

In order to use the Green Lane, businesses will have to register for a Trusted Trader Scheme (those businesses already registered for the UK Trader Scheme will be automatically registered) and will use a new online portal to facilitate the movement of the goods. This portal will be underpinned by the existing Trader Support Service (TSS) and will rely on commercial data including sales invoices and transport contracts.

The UK has advised that it will establish a ‘not for EU’ label to differentiate those goods that are destined to stay in NI.

Red Lane

The Red Lane will operate for goods that are at risk of entering the EU market and customs checks will continue for those goods. For goods that were deemed to be ‘at risk’ at the time of entry into NI but ultimately do not enter the EU, a new tariff reimbursement scheme will be in operation, in addition to the existing customs duty waiver scheme.

Movements from NI to GB

In relation to trade moving from NI to GB, the Framework sees the removal of export declarations for the vast majority of goods assuring unfettered access for NI businesses to the UK market. Controls will only be applied only when required to manage specific international obligations such as for movements of endangered species.

Agrifood

The original Protocol required full EU veterinary controls to be in place at NI ports for the movement of certain food products including meat and fruit/vegetables from GB to NI. The full extent of the controls has been avoided through temporary grace periods being applied by the UK government.

Under the Framework, these controls have been simplified and goods for NI retail market will be subject to minimal certification requirements such as a single document electronically processed with no requirement for physical checks.

Medicines

The original Protocol applied EU rules and authorisation requirements for medicine in NI, meaning that the European Medicines Agency (EMA), not the UK’s Medicines and Healthcare products Regulatory Agency (MHRA), approved medicines for the NI market.

The Framework provides a safeguard on the supply of medicines from GB into NI and asserts the primacy of UK regulation. As a result, the MHRA will approve all drugs for the whole UK market, including NI.

Small parcels

Under the Protocol, all parcels moving between GB and NI including those between individuals were subject to full customs formalities. This would also have applied for parcels being sent from NI to GB.

The revised approach under the Framework means that the following applies:

• B2C parcels shipped by authorised carriers – sent via Green Lane and Trusted Trader Scheme

• C2C parcels – waiver from all customs obligations

• NI → GB parcels – export declarations not required

These arrangements will be in place from October 2024.

VAT and excise

Under the existing Protocol, NI remains part of the UK VAT regime but is aligned with EU rules for goods in order to avoid a hard border between NI and the Republic OF Ireland (ROI). Those rules have prevented the UK from applying VAT and excise duty changes UK-wide. To avoid future divergence due to EU rule changes, the legal text of the Protocol has been amended so that NI can benefit from the same VAT and excise taxes that apply in the rest of the UK.

An example of this is the zero-rate of VAT on goods installed in immoveable property as these goods are not at risk of entering the EU Single Market.

The agreement makes further changes to protect NI’s place in the UK VAT regime:

• It removes the limit on the number of reduced and zero rates in NI

• Provides full flexibility on future rates where goods are consumed in NI

• Protects NI second-hand car market with a new scheme effective from 1 May 2023

• Exempts NI businesses from EU rules (including being registered for VAT under a 2025 EU Directive)

• Establishes a new mechanism to look at future EU rule changes in relation to VAT and makes legally binding changes to avoid the impact that new EU red tape could cause.

From as excise perspective, alcohol duty reforms due to take effect this summer (2023) will now also apply in NI.

Stormont Brake

The Framework also establishes the ‘Stormont Brake’ which allows the NI Assembly to have a say on EU goods laws that may have an adverse effect on the NI population. The brake can be activated if approved by 30 Members of the NI Assembly.

Next Steps

It is expected that there will be a phased implementation of the agreement with some aspects coming into force later this year and the remainder in 2024.