Countdown to Brexit: What will happen to Northern Ireland on 31st January?

At 11pm on Friday 31st January 2020 the United Kingdom will legally no longer be a part of the European Union. However, in reality nothing will change for Northern Ireland or the rest of the UK when the clock strikes 11.01pm, as the parties immediately enter into a transitional phase until the end of 2020. This period is to allow time for the UK and the EU to negotiate a trade deal and an on-going relationship, including an agreement regarding Northern Ireland. During the transitional period EU legislation will still apply in the UK and the trading relationship will remain unchanged.

The intention of both the UK and the EU is that no new checks or custom controls should be imposed on the border between UK and Republic of Ireland. Therefore, the proposed plan is that whilst the whole of the UK will leave the EU customs union, and Northern Ireland will remain part of the UK’s customs territory, Northern Ireland will continue to enforce the EU’s custom code at its ports and will follow EU rules on certain industry standards such as agriculture and manufacturing. This will inevitably mean some form of checks on goods moving between Northern Ireland and the rest of the UK, but what is not yet clear is what these checks might consist of and how extensive they might be. Part of the problem is the EU’s fear that goods might move from Great Britain to Ireland via Northern Ireland, without payment of the appropriate tariffs. There is a suggestion that tariffs would be charged on goods deemed ‘at risk’ of such a process and paid back if the goods were used in Northern Ireland, but what goods are deemed ‘at risk’ is a matter of negotiation.

The UK’s withdrawal from the EU is being negotiated between a joint committee of the EU and the UK and a specialised committee will deal solely with the unique position of Northern Ireland in the withdrawal process. Following the recent revival of Stormont, Northern Irish ministers will be invited to attend when NI specific issues are to be discussed and input will be sought by business groups and the Irish government.

The UK government has committed to no extension of the transitional period beyond December 2020. If a trade deal has not been agreed by then, whilst we can be fairly sure that there will be no hard border between NI and the Republic of Ireland, there will in all likelihood be trade barriers between NI and the rest of the UK which could have an adverse affect upon the Northern Irish economy. The next eleven months of negotiations will be crucial for the future of Northern Ireland.

This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Commercial Team at Cleaver Fulton Rankin for further advice or information.

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