The UK Government's proposal on the Backstop
The UK Government has today published its proposals for the replacement of the Northern Ireland backstop, the key sticking point in the negotiation of the Withdrawal Agreement providing for an orderly basis on which the UK can leave and negotiate a new future relationship with the EU. It represents a material shift by the UK and, as the UK Government recognises, a departure from (or in the words of Boris Johnson in his letter to the EU Commission, "a different way" to) the EU's orthodox approach in terms of the enforcement of the rules of the single market and customs union. As such, whether the proposal proves to be a fresh basis for negotiation depends on the ability of the EU27 to depart from their stated red lines in the negotiations.
On any view, in the time available before 31 October, this is a tall ask – but one the UK Government believes the EU might agree to in the face of a possible no deal Brexit on 31 October. The UK Government has remained silent on the potential implications of the Benn Act, which would see the Prime Minister being bound to request an extension to the Article 50 period beyond 31 October.
The proposed arrangements would come into effect in the event that no future relationship agreement is agreed between the UK and the EU by the end of the transition period set out in the Withdrawal Agreement, i.e. by 31 December 2020 (or 31 December 2022, if extended).
The proposal is that Northern Ireland would remain aligned with Single Market rules for goods, while leaving the Customs Union. This means continued regulatory alignment and free movement of goods between Northern Ireland and the EU, but no free movement of services or people (other than Irish and British nationals, as per the Common Travel Area arrangements), as well as the imposition (albeit not at the border) of customs checks for trade moving between the Republic of Ireland and Northern Ireland. Crucially, the enforcement of Single Market rules would remain subject ultimately to CJEU jurisdiction. However, day-to-day enforcement would largely rely on cooperation between Irish and UK authorities.
As the UK (including NI) would be exiting the EU Customs Union as a whole, checks and controls would have to apply for EU-NI trade – this is a significant departure from the previous Backstop. While the proposal is clear that those checks should remain as minimal as possible and not be conducted "at or near the border", some processes would necessarily have to be followed by traders (using — as yet unidentified — facilitated electronic-type mechanisms). As the distinction between goods and services becomes increasingly blurred by technology, this arrangement may prove difficult to manage.
The proposed mechanism also relies on the existence of a Northern Ireland Executive and Assembly to confirm and reaffirm the democratic consent of the people of Northern Ireland to remaining in this arrangement. However, these institutions have been suspended since January 2017.
For more tailored Brexit advice, please contact your usual Hogan Lovells team or a member of our Brexit Taskforce or email [email protected].