Dispute resolution under the Ireland/Northern Ireland Protocol

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 The Ireland/Northern Ireland Protocol is part of the Withdrawal Agreement, and was designed to deal with the effect of the UK’s exit from the EU on the island of Ireland.

This Protocol sets out arrangements necessary to address the unique circumstances on the island of Ireland, to maintain the necessary conditions for continued North-South cooperation, to avoid a hard border and to protect the 1998 Agreement in all its dimensions.

These considerations underpin and shape the Protocol, along with the need to ‘respect the essential state functions and territorial integrity of the United Kingdom’. Amongst other things, the Protocol deals with issues around customs, tax, the rights of individuals and state aid. In force since the beginning of 2021, it has already been the subject of considerable debate. Ten days after it began to regulate some aspects of trade between the UK and EU, questions were raised in the House of Commons on the possibility of invoking Article 16 to address problems around the transit of goods between GB and NI. Since then, the EU has briefly invoked Article 16, and the UK has now notified the EU that unilateral steps will be taken to deal with issues arising as a result of its implementation. This article examines how these disputes have worked within the context of the resolution procedures laid out in the Protocol.

How does Article 16 work?

The Article 16 dispute resolution procedure is often referred to as a way to simply cancel the Protocol – or at least get rid of aspects of it that are proving problematic. In reality, it incorporates a lengthy consultation and arbitration procedure to manage difficulties caused by the Protocol.

In the first instance, Article 16 is to be called into aid when the application of the Protocol ‘leads to serious economic, societal or environmental difficulties that are likely to persist’ or ‘diversion of trade’. In such circumstances, the EU or the UK may unilaterally take appropriate safeguard measures, which must be restricted to what is strictly necessary to remedy the situation. Priority is given to measures that ‘least disturb’ the functioning of the Protocol.

Annex 7 to the Protocol governs the procedures when action is taken under Article 16. The party considering safeguarding measures will notify the other via the Joint Committee and provide all relevant information. Both parties will then enter consultation in the Joint Committee to find a commonly acceptable solution. Unless the consultation procedure has been concluded beforehand, the party taking safeguarding action may not take measures until one month after the date of notification.

When exceptional circumstances require immediate action and thus exclude this type of consultation and discussion, strictly necessary measures may be taken to remedy the situation. That party will notify the measures taken to the Joint Committee. The measures taken shall be consulted on within Joint Committee every three months from the date of their adoption. Either party may at any time request the Joint Committee to review the measures.

In layman’s terms, this is legal glass to be broken in case of emergency; even then, notice of intention to break the glass is preferred. Once that has been done, there will be discussions around how much glass has been broken, why, and how best to replace it.

But hasn’t Article 16 been invoked already?

On 29th January 2021, the EU released new rules controlling the export of COVID-19 vaccines and said it would trigger emergency safeguarding measures to prevent vaccines being sent to Northern Ireland and then on to the rest of the UK. This caused considerable controversy, and the EU quickly reversed the measures. Since then, the UK has said it will unilaterally extend the grace period which applied in respect of export certificates for supermarkets, agrifood charges and rules around the sale of live plants.

In response, the EU has written to the UK under Article 12 (4) of the Protocol, beginning the formal infringement process. This letter, in keeping with the practice of the Court in this matter, has not been published. The EU has also sent a ‘political letter‘ to Sir David Frost, the co-chair of the Joint Committee, calling on the UK to ‘rectify and refrain from’ taking the unilateral actions described. The letter also calls on the UK to enter into bilateral consultations in the Joint Committee to reach a mutually agreed solution.

How does Article 12 come into it?

Article 12 deals with the ‘implementation, application, supervision and enforcement’ of the Protocol. Article 12 (4) applies part of the Treaty on the Functioning of the European Union in the UK and essentially states that EU bodies will have the powers conferred on them by Union law in the UK, in respect of the parts of the Protocol that deal with technical regulations, VAT, state aid, customs and the single electricity market. In particular, it explicitly grants the Court of Justice of the European Union (CJEU) jurisdiction.

The EU – or more properly – the European Commission, have sent a Letter of Formal Notice to the UK, alleging breaches of substantive provisions of EU law concerning the movement of goods and pet travel. This is a preliminary step in a reference to the CJEU for an opinion or enforcement action, which is (in part) why Article 12(4) is involved. The UK has one month to reply. This process is analogous to judicial review procedure or other civil law action – one party has laid out its complaint to the other in a formal fashion, warning that proceedings may follow if action is not taken.

So did anybody invoke Article 16?

Not exactly. The EU invoked it over vaccine supply and reversed the decision within hours. The UK has taken unilateral action in relation to grace periods that were already agreed with the EU. A press release from Lord Frost explained that the unilateral measures were announced ‘following official-level notification to the Commission earlier this week’. It is also worth noting that the political letter sent by the European Commission asks the UK to enter discussions in the Joint Committee, which is an aspect of Article 16 procedure. As above, the EC has taken action under Article 12, but Article 16 does not include a process for objecting to measures taken beyond its provisions.

This question was raised in the House of Commons and the NI Secretary of State, Brandon Lewis, stated that the measures being taken were temporary operational measures, that were ‘well precedented’ in international trade, but he did not directly answer the question on whether Article 16 had or had not been invoked.

What next?

The UK’s response to the letter from the European Commission is the next in a series of steps that may tread relatively new legal ground, albeit using the familiar map of the CJEU reference procedure.

As has been pointed out by commentators, the EU took action in parallel by sending the ‘political letter’. This letter calls upon the UK to consult in Joint Committee, so the arguments over provisions of the Protocol may remain there, rather than disturb the ear of any court. The advantage of a court ruling is the greater certainty and transparency it will provide, but the Committee’s proceedings will doubtless be simpler and faster. Importantly, both parties will have input into any solution that is reached in Joint Committee. If a decision is reached by the court, that decision may be challenged, or its implementation may create new problems on the ground.

The Protocol is a complex answer to a complex question, but there is always more than one way of solving complex questions and opinions will differ over which is best. Arguably, a robust dispute resolution procedure is an essential part of ensuring the answer is sufficient. As problems arise with implementation of the Protocol, ways of solving those problems are likely to become increasingly important.