Brexit Transition in 10 days: European Parliament sets the scene for ‘no-deal’

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In the final session of the year, the European Parliament resolved that:

  1. without a written proposal – and time to give it due consideration – they would be unable to ratify a Brexit deal; and
  2. temporary measures come into effect in order to keep Eurotunnel open for a short ‘grace’ period in the event of a no-deal end to the transition period.

European Commission lead negotiator, Michel Barnier, had earlier updated MEPs in an address to Parliament on the state of discussions on Thursday [17 December].

Negotiations continued between the UK and EU over the weekend up to the European Parliament’s deadline of Sunday evening when they broke up with significant differences remaining between the parties.

European Parliament press release on future EU-UK relationship

  • MEP’s acknowledged the enormous efforts of their team attempting to avoid a no deal scenario – and the huge negative impact it would have on citizens and businesses;
  • Emphasised their wish to avoid the disruptive impacts of a possible no-deal outcome;
  • Noted the UK Government’s “refusal to even consider extending the transition period”;
  • Endorsed four “targeted and time-limited contingency measures” to soften a no-deal cliff-edge;
  • Should an agreement be reached by negotiators before midnight on Sunday 20th December, “stands ready to organise an extraordinary plenary session towards the end of December” to allow the European Parliament to “debate the outcome of negotiations and consider granting its consent”;
  • “Insists that this is contingent on having access to the text of any agreement in advance of the formal referral being made, and in this respect urge the Commission to provide the Parliament with a provisional text as soon as possible”;
  • Endorses that ratification of any agreement is: “dependent on the full implementation by the UK government of all provisions of the Withdrawal Agreement, including the Protocol on Ireland/Northern Ireland.  The European Commission must provide Parliament with a full report on the implementation of the Protocol, in order to allow it to assess whether or not this condition has been met;
  • Precludes the European Commission from making a “provisional application of trade agreements.”  A deal can be implemented “only once the European Parliament has given its consent”;
  • Highlights the exceptional nature of these negotiations and stresses that in no way can this be seen to constitute a precedent for future trade agreements.  The usual format of cooperation and access to information must be fully guaranteed in line with EU Treaties – including “far-reaching sharing of all negotiating texts, regular dialogue, and sufficient time for formal EP scrutiny and debate of agreements”;
  • Noted its gratitude for the “dedicated and professional work of the EU’s Chief Negotiator, Michel Barnier, and the Commission ‘Taskforce’, who are “working tirelessly for a positive outcome” – and welcomed their extremely close and regular cooperation with the European Parliament.

European Parliament:  17 December 2020

MEPs adopted temporary measures to keep the tunnel railway connection between continental Europe and the UK running after the end of the transition period in the event of no-deal end to the Brexit transition.

France is empowered to negotiate a “new international agreement with the UK regarding the governance of the Channel Tunnel Fixed Link. The Intergovernmental Commission would remain the main safety authority for the tunnel.

“To avoid rail traffic being interrupted in the Channel Tunnel Fixed Link as of 1 January 2021, the European Parliament agreed to temporarily extend safety licences and certificates to allow France and the UK sufficient time to conclude a bilateral agreement.  The licence for the current tunnel infrastructure manager would remain valid for ‘two months’ after the end of the transition period. The safety certificates and licences issued under EU law to UK companies would be extended for nine months.

Four other contingency measures will be put to the vote on 18 December to provisionally maintain cross-border connectivity between the UK and the EU on roads and by air as of 1 January 2021.

Michel Barnier briefing to European Parliament

Speaking to the European Parliament, Michel Barnier said it was the “moment of truth” for the two sides coming to a Brexit agreement by the end of the year.

“We have very little time remaining, just a few hours to work through these negotiations in a useful fashion if we want this agreement to enter into force on the first of January…There is a chance of getting an agreement but the path to such an agreement is very narrow.”

Mr Barnier emphasised that the bloc would not sign a deal “at any price or any cost” – and concluded that he was unable “to say what will come during this last home straight of negotiations.”

References

https://ec.europa.eu/commission/presscorner/detail/en/speech_20_2499

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2478

Photo:  AP.  Britain’s lead negotiator, Lord Frost, leaves Brexit negotiations in Brussels on Sunday evening, 20 December 2020 – having missed European Parliament’s deadline to table a proposal for ratification by the end of Brexit transition period.

Brexit Transition: Cross-party ‘end-of-term’ report critical of Government’s lack of preparedness

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On Thursday, Parliament ended its last session before Great Britain leaves the EU ‘Single Market’ and ‘Customs Union’ at 23:00 GMT on 31 December.

The cross-party Parliamentary ‘Committee on the Future Relationship with the European Union’ completed its assessment of UK preparedness.  Published this morning, 19 December – and with 12 days until the end of the transition period – it unanimously paints a stark warning of: “a potentially challenging start to 2021 as businesses, traders and citizens adjust to life outside the EU.”

Committee chair, Hilary Benn MP, said:  “With just seven working days until the end of the transition period, significant concerns remain.  The Government still cannot provide businesses, traders and citizens with certainty about what will happen in all the areas affected by the negotiations, but as we leave the rules of the Single Market and the Customs Union, firms exporting to the EU will face more red tape, unfamiliar forms and extra costs from 1 January whatever happens.

Coinciding with the toughest trading conditions since records began – and with businesses focussed on surviving Covid-19:  Benn added: “At this late stage, the Government must be ready to implement contingency plans where necessary to mitigate the effects of any disruption.  Failure to do so would mean the worst possible start to the new year for many people and businesses who are already experiencing the toughest of times.”

The report’s key findings include:

  • “Given the overall state of preparedness, the Government must have robust contingency plans ready for 1 January.”  The report acknowledges the complexities of developing a brand-new Border Operating Model.  However, “key decisions have been taken very late – including the announcement of the outcome of bids to the Port Infrastructure Fund and the location of inland facilities to serve the ports of Holyhead and Cairnryan.”  This has affected overall readiness as the end of transition approaches.

It is critical that the Government has robust contingency plans in place to deal with any disruption from 1 January.

  • “Late delivery of IT leaves little time for users to adapt.”  The report notes that whilst the Government “appears to be on track to make the necessary changes to its own IT systems by 1 January – such as the HMRC’s Customs Declaration Service,” they are being rolled out with very little time remaining.  Many businesses and traders will be unable to update their own systems that now need to integrate with the HMRC.  Late delivery means that staff cannot be fully trained on the new software across the UK and in countries they are exporting to or importing from.

Training is vital if new arrangements are to function smoothly.  We have reported on the recent NAO report which found that systems, processes and resources have not been fully completed and tested.  The Government should therefore have a plan to swiftly address any problems that arise.

  • “The UK and EU should reciprocate on no-deal measures and phasing-in of goods controls.”   The Committee welcomed the European Commission’s ‘no-deal contingency measures’ for road freight and road passenger transport, published on 10 December, and recommends that the Government ensures they can be enacted, if required, by reciprocating in full.  We note that the European Parliament went further in recommending additional ‘grace’ periods to mitigate disruptions in their final session of the year on 18 December.

The report says that the Government decision to phase in controls on goods arriving from the EU over the first six months of 2021 was the right one.  But it warns that July is not far off and urges that all necessary systems and infrastructure are put in place, and businesses made aware of what changes they need to make, as soon as possible.  The report also calls on the EU to reciprocate the UK’s decision to phase in controls.

  • “Trained customs personnel must be in post, and business engagement ramped up.”  As well as IT systems and physical infrastructure, new trading arrangements will require trained customs agents if they are to run smoothly.  Businesses and traders will be reliant on these intermediaries for assistance with paperwork; and ensuring they comply with new requirements – for example on plant and animal health, and food and feed safety.  If the right people are not in the right place at the right time, businesses and traders will face an uphill task.  “The Government must therefore be ready to address any personnel shortages.”

The report welcomed the Government’s efforts to engage with businesses about the changes that are coming – but warned that with so little time remaining, continuing uncertainty about the future arrangements, unclear guidance and the additional complexities created by Covid-19 restrictions, businesses have been constrained in their preparations.

  • “The UK needs to ensure its border is safe and secure.”  The report says that whilst the precise nature of future co-operation with the EU on law enforcement remains unclear, “the UK’s safety and security must not be compromised.”  While UK law enforcement agencies are working hard to develop alternatives to EU databases – such as the Schengen Information System II – the fall-back systems for information sharing are likely to be slower and more cumbersome.

This was highlighted in Thursday’s Home Office Affairs Committee session into “UK-EU security co-operation”.  The police and crime fighting agencies will be disadvantaged once excluded from the shared EU intelligence.

The Brexit Committee noted that: “we still do not know if the UK will receive a data adequacy decision to enable data transfers from the EU to the UK, and a replacement for the European Arrest Warrant is unlikely to be in place by 1 January.”  They call on the Government to “closely monitor the speed and effectiveness of its fall-back systems.”  They added that the Government should explore all available opportunities for countering cross-border crime in Northern Ireland, including bilateral arrangements, that build on current co-operation between the Police Service of Northern Ireland and An Garda Siochána.

  • “The Ireland/Northern Ireland Protocol must remain a priority.”  The Brexit Committee welcomed the agreement between the UK and EU about how the Protocol will work in practice.  However, they noted the “likely negative consequences of the agreement being reached so late for citizens and businesses.” They warn that – even with an agreement – the early months of 2021 are “likely to be difficult” with some problems deferred rather than solved.  Northern Irish businesses and civil servants face challenges, and – if these are to be overcome – “all parties must show flexibility, creativity, and generosity of spirit.”

To ensure that the Protocol is applied consistently – and to avoid future disputes – HMRC should work closely with the Irish Revenue Commissioners and other relevant authorities.  The Government should also – together with its devolved counterparts – “put contingencies in place to minimise traffic disruption near affected ports.”

Comment

We can only agree with Mr Benn when he says that: “the government has left it very, very, late.”

References

Preparing for the end of the Transition Period – Committee on the Future Relationship with the European Union – House of Commons (parliament.uk)

Committees – UK Parliament

 

Post Brexit: Northern Ireland ‘grace periods’ aim to soften cliff-edge landing

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The Government has published a series of measures to buy time for them to work out how to implement Brexit in Northern Ireland whilst reconciling the conflicting principles of: the ‘Withdrawal Agreement’ and its ‘Protocol’ signed in 2019; and the province remaining an integral part of the United Kingdom.

The Protocol protects the Belfast (Good Friday) Agreement in all its dimensions: maintaining peace, stability and prosperity on the island of Ireland. It is overseen by the ‘EU-UK Joint Committee’, co-chaired by European Commission Vice-President, Maroš Šefčovič, and the UK Chancellor of the Duchy of Lancaster, Michael Gove MP.

The UK Government introduced two Bills to Parliament:  The ‘UK Internal Market’ Bill and, last week, the ‘Taxation (Northern Ireland)’ Bill.  Each of these Bills included clauses that aimed to keep Northern Ireland a part of the UK – but at the cost of breaching the Withdrawal Agreement.  These Bills have faced opposition in Parliament – with the House of Lords voting strongly against them. More widely, the EU negotiations on a future trade deal were jeopardised, and President-elect, Joe Biden, stated that they would preclude a future trade deal between UK and USA.

Post Brexit: UK risks widening the gap as the post-transition negotiations go down to the wire – Europartnership

On Thursday, the UK Government decided not to proceed with the contentious clauses in the Bills and accepted as “essential” that the Withdrawal Agreement – in particular the Protocol on Ireland and Northern Ireland – should be “fully operational on 1 January 2021” – the end of the Brexit transition period.

The UK and EU reached an “agreement in principle” on: Border Control Posts/Entry Points – specifically for checks on animals, plants and derived products; export declarations; the supply of medicines; the supply of chilled meats and other food products to ‘supermarkets’; and a clarification on the application of State aid under the terms of the Protocol.

Since then a series of detailed guidelines on these temporary ‘easements’ and ‘grace periods’ have been published on the Gov.UK website.

The UK and EU also reached an “agreement in principle” with respect to the decisions the Joint Committee has to take before 1 January 2021.  In particular, this concerns the practical arrangements regarding the EU’s oversight of Northern Ireland remaining part of the EU ‘customs union’ as UK authorities: begin to implement checks and controls under the Protocol; determine criteria for goods to be considered “not at risk” of entering the EU when moving from GB to Northern Ireland; the exemption of agricultural and fish subsidies from State aid rules; and the finalisation of the list of chairpersons of the arbitration panel for the dispute settlement mechanism.

On 9 December, Michael Gove informed Parliament that the Government will withdraw clauses 44, 45 and 47 of the UK Internal Market Bill, and will not introduce any similar provisions in the Taxation Bill.

The moves come as the European Commission tiggered its ‘contingency plans for Brexit no-deal’ – warning that the risk of an agreement not being reached is now “significant”.

On 10 December, European Commission President, Ursula von der Leyen, offered an emergency package of measures designed to soften the landing from a cliff-edge no-deal end to Brexit.

Extracts from the European Commission statement:

“Readiness and preparedness for 1 January 2021 is now more important than ever.

Disruption will happen with or without an agreement between the EU and the UK on their future relationship.

This is the natural consequence of the United Kingdom’s decision to leave the Union and to no longer participate in the EU Single Market and Customs Union.

The Commission has always been very clear about this.”

While a ‘no-deal’ scenario will cause disruptions in many areas, some sectors would be disproportionately affected due to a lack of appropriate fall-back solutions and because in some sectors, stakeholders cannot themselves take mitigating measures.  The Commission is therefore putting forward today four contingency measures to mitigate some of the significant disruptions that will occur on 1 January in case a deal with the UK is not yet in place:

Basic air connectivity: A proposal for a Regulation to ensure the provision of certain air services between the UK and the EU for 6 months, provided the UK ensures the same.

Aviation safety: A proposal for a Regulation ensuring that various safety certificates for products can continue to be used in EU aircraft without disruption, thereby avoiding the grounding of EU aircraft.

Basic road connectivity: A proposal for a Regulation covering basic connectivity with regard to both road freight, and road passenger transport for 6 months, provided the UK assures the same to EU hauliers.

Fisheries: A proposal for a Regulation to create the appropriate legal framework until 31 December 2021, or until a fisheries agreement with the UK has been concluded – whichever date is earlier – for continued reciprocal access by EU and UK vessels to each other’s waters after 31 December 2020.  In order to guarantee the sustainability of fisheries and in light of the importance of fisheries for the economic livelihood of many communities, it is necessary to facilitate the procedures of authorisation of fishing vessels.

The Commission will work closely with the European Parliament and Council with a view to facilitate entry into application on 1 January 2021 of all four proposed Regulations.”

References

EU-UK Joint Committee statement on implementation of the Withdrawal Agreement – GOV.UK (www.gov.uk)

Commission proposes targeted contingency measures (europa.eu)

Post Brexit: UK risks widening the gap as the post-transition negotiations go down to the wire

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Updated Tuesday 8 December 2020

Boris Johnson and European Commission President, Ursula von der Leyen, may have “welcomed the fact that progress has been achieved in many areas” in their weekend conference call.

Nevertheless, significant differences remain on three critical issues: ‘a level playing field’ when it comes to state aid; ‘governance’ and who will arbitrate future disputes between the EU and UK; and access to UK waters for EU fishing fleets.

Both sides acknowledged in a joint press statement that if these issues are not resolved, the UK is heading for the ‘no-deal’ scenario at the end of the Brexit ‘transition period’.

We dealt with ‘state aid’ in a previous post – highlighting the hardening of the UK ‘red line’ in recent weeks.  It is difficult to see how, having widened the gulf between the parties, the UK could compromise and accept the EU position without loss of face.

Johnson and von der Leyen spoke again yesterday evening” [7 December] – having instructed their chief negotiators to reconvene in Brussels.  In the hour immediately before the call the House of Commons voted to re-insert the controversial ‘Treaty breaking’ clauses in the ‘Internal Market Bill’ that had been removed last week by the House of Lords in an overwhelming cross-party vote.

Whist publicly stating that they want an agreement, the UK Government last week added a second piece of legislation that is likely to further increase the likelihood that one of one of the 27 EU member states using its veto – even if negotiators can find common ground, four-and-a-half years after the vote leave referendum.  One veto from a any member state, or the European Parliament, or the European Council, will be enough to stop a trade deal in its tracks – and Great Britain will leave the EU single market and customs with ‘no-deal’ on 31 December.

On Thursday 3 December, Jacob Rees-Mogg MP, Leader of the House of Commons, announced that the Government would be introducing the ‘Taxation (Post-Transition Period) Bill’.  To date, the Bill has not been published – yet is to be fast-tracked to a ‘second reading’ on 9 December 2020.

The Internal Market Bill has received widespread criticism around the across European and around the World.  President-elect Joe Biden has said that if passed, it will count against the UK in any future discussions about a trade agreement.  The House of Lords have formally ‘expressed regret’ that the part of the Bill which concerns the implementation of the Northern Ireland Protocol would: “undermine the rule of law and damage the reputation of the United Kingdom” as Parliament – “which is responsible for making the law and expecting people to obey the laws it makes – would be knowingly granting power to the Executive to break the law.”

The House of Lords resolved to remove clauses that would enable a breach of international law.  They also resolved to remove clauses “intended to give the UK Government the power to provide financial assistance to any part of the United Kingdom for a wide range of purposes.”  The main arguments against granting those powers were the effects on the devolution – with the potential to undermine the stability of the Union that is the United Kingdom. The cross-party majority was 433 to 165.

The Government has now reinstated the clauses.

In a related move, Michael Gove MP, Chancellor of the Duchy of Lancaster indicated in October that in the event of a no-deal end to Brexit transition, the Government would need to legislate “measures relating to tariffs on movements of goods between Great Britain and Northern Ireland” in the form of a ‘Finance Bill’.

In a highly unusual fast-track move, the provisional date has been set for Wednesday 9 December for Parliament to complete the ‘second reading’ and the ‘committee stage’ of the ‘Taxation (Post-Transition Period) Bill’.  MPs will have their first sight of the contents of the Bill on Tuesday 8 December as it is published on the Parliament website.  The Bill has the potential to further alienate all those who do not want the UK to break international law and treaty commitments to the Good Friday Agreement.

With EU and UK negotiations on a knife-edge and against the backdrop of either a very ‘thin’ deal, or no-deal, Peter Mandelson – former Cabinet Minister and EU Commissioner – has published an article in the Guardian looking at how the UK – having spent nearly half a century reshaping itself round the opportunities offered by European economic integration – now has to scope out the next chapter in its national story.

“In determining that Great Britain should not only leave the EU, but additionally languish outside Europe’s giant single market and its frictionless customs union, Boris Johnson is putting Britain at a massive and permanent disadvantage in relation to its biggest export market.  All the new benefits from every global trade deal that we could ever aspire to will not begin to equal the size of our present European trade.  This is the price we will pay for the triumph of hard-line Tory Brexiters over those with a stronger sense of national interest in their party.”

He argues that there were many other priorities into which we could have invested energy much more gainfully in order to build a “21st-century Britain – including a recasting of work and human rights, and updating the welfare system.

I’d like to add: leading the move to create a sustainable planet for future generations; levelling some of the global inequalities that presently create friction between factions and nations; and harnessing the burgeoning technological advances in artificial intelligence, communications, robotics, genetics, medicine and agriculture – for the greater good of mankind.

References

Joint Statement by EC President and PM Johnson (europa.eu)

Post Brexit: ‘State Aid’ remains a sticking point for EU-UK negotiations as UK ‘hardens’ its ‘red-line’

UK Internal Market Bill: House of Commons Library

Taxation (Post-Transition Period) Bill: House of Commons Library

Photo:  EP Research

 

 

Post Brexit: ‘State Aid’ remains a sticking point for EU-UK negotiations as UK ‘hardens’ its ‘red-line’

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Neither the UK nor EU has been willing to compromise and yield ground on their ‘red-line’ on ‘state aid’ policy during negotiations on the future relationship between them.  The EU wants any ‘deal’ to include commitments on state aid as part of a set of ‘level playing field’ provisions.  This would ensure ‘fair competition’ between the UK and the remaining 27 EU member states who operate under a unified regime – the ‘single  market’.

The EU, therefore, has asked for full disclosure on the detail of the UK’s future domestic state aid policy.

The UK’s chief negotiator, Lord Frost, has indicated that the UK is willing to include some ‘high-level principles’ on state aid in any agreement.  However, the detailed design of the UK system has not yet been worked out.  That will come later – allowing time for wider consultation before setting the UK’s ‘long-term’ policy.

The UK Government position is that at the end of the transition period, the UK will have its own domestic subsidy control regime to replace EU law on state aid.  From 1 January 2021, the UK will – according to the Secretary of State for Business, Energy and Industrial Strategy, Alok Sharma MP – follow the World Trade Organisation (WTO) rules for subsidy control.

Sharma also said the Government would publish a consultation “in the coming months” on whether to go further than the WTO basic rules and related commitments as the UK enters into in free trade agreements.

The WTO regime is fundamentally different from the EU’s state aid rules.  For example, subsidies are allowed by default rather than being generally prohibited – and prior notification and approval is not required.

Far from looking to compromise and move closer to the EU in order to reach a ‘deal’ by 31 December, the UK Government is driving through legislation which would remove state aid provisions from the ‘retained EU’ law that will remain on the UK statute book after the transition period.  The House of Commons has approved the ‘State Aid (Revocations and Amendments) (EU Exit) Regulations 2020’ with the House of Lords scheduled to debate them on 2 December 2020.

Labour has tabled a ‘regret’ amendment to the motion and the House of Lords ‘Secondary Legislation Scrutiny Committee’ has drawn the instrument to the special attention of the House.

Special provisions on state aid apply to Northern Ireland.  Under the Northern Ireland Protocol, Northern Ireland remains part of the UK’s customs territory but will continue to apply the EU’s customs code, VAT rules and single market rules for goods.

Background

The EU defines state aid as “an advantage in any form whatsoever conferred on a selective basis to undertakings by national public authorities”.  This includes things like subsidies, grants, interest or tax reliefs, guarantees, the granting of preferential terms, and so on – where this is done selectively – for example, only to specific companies or industry sectors or regions.

EU law prohibits state aid where it would ‘distort or threaten to distort’ competition between member states.  State aid may be permitted in some circumstances – but before implementing state aid measures, EU member states must notify the European Commission.  The Commission is empowered to approve aid which helps achieve defined policy objectives such as ‘regional economic development’ or ‘better environmental protection’.  The Commission also has powers to recover state aid if it is incompatible with the EU rules.

Northern Ireland

The Withdrawal Treaty Protocol provides that EU law on state aid shall apply to the UK “in respect of measures which affect that trade between Northern Ireland and the EU which is subject to this protocol”.  Annex 5 lists the specific EU law state aid provisions that this covers.

United Kingdom ‘Internal Market’ Bill

The UK Government sought to address the issue of EU ‘reach-back’ by proposing the ‘United Kingdom Internal Market Bill’.  The bill contained a clause through which the Government sought to give itself the power to unilaterally determine the interpretation of ‘article 10 of the protocol’.

Controversially, clause 45 of the bill clause would, in the Governments own admission: “break international law in a very specific and limited way”.

The House of Lords voted at committee stage to remove a number of clauses, including clause 45.  The Government said immediately after committee stage that it would reintroduce the clauses the Lords removed when the bill returns to the Commons in December.

The bill also contained provisions to set out that only the UK Parliament, and not the devolved assemblies, could legislate to regulate subsidies.

United Kingdom ‘State Aid (EU Exit)’ Regulations

The Commons formally approved the regulations on 4 November 2020.

The House of Lords is due to debate the regulations on 2 December 2020.  Lord Stevenson of Balmacara, Shadow Spokesperson for Business, Energy and Industrial Strategy and International Trade, has tabled an amendment to add the following wording to the end of the motion to approve the regulations: “that this House regrets that the Regulations replace retained European Union State Aid rules with a yet to be defined new subsidy regime, and calls on Her Majesty’s Government to delay implementation of the regulations until (1) they have consulted widely on their proposals, (2) they have sought the agreement of the devolved administrations, and (3) the primary legislation detailing how the United Kingdom’s new subsidy regime will operate after the end of the transition period has received Royal Assent.

EU and state aid

EU law on state aid is set out across provisions in the ‘Treaty on the Functioning of the European Union’ – TFEU.   The State Aid (Revocations and Amendments) (EU Exit) Regulations 2020 would disapply EU law relating to state aid otherwise retained in domestic law by the European Union (Withdrawal) Act 2018.  They would do this by: ensuring directly effective TFEU provisions ceased to be recognised and available in domestic law; revoking directly applicable EU law provisions; amending retained EU law and relevant provisions of domestic law.

Commenting on the trade talks and the three ‘sticking points’ on 20 November 2020, the President of the European Commission, Ursula von der Leyen, said that the negotiations had: “made some headway on state aid”.

References

What is state aid? European Commission (europa.eu)

World Trade Organisation (WTO) rules for subsidy control

Draft State Aid (Revocations and Amendments) (EU Exit) Regulations 2020 – House of Lords Library (parliament.uk)

Image: by Shutterbug75 on Pixabay

Post Brexit: Northern Ireland remains under EU regulations for prescription drugs – ‘GB’ medicines may not be dispensed

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According to a Parliamentary briefing: “approximately 98% of the medicines used in Northern Ireland are imported either from or via Great Britain, often originating in the EU.”

From 1 January 2021, the EU laws and regulations regarding: ‘medicinal products’ – known as the ‘Falsified Medicines Directive’ will apply in Northern Ireland but not in Great Britain.   The directive aims to prevent counterfeit medicines entering the supply chain – and applies to the majority of prescription-only medicines.

The requirement to conform to EU regulations for a province of the UK after the end of the Brexit ‘transition period’ is creating: “uncertainty and worry for pharmaceutical companies about what rules will apply to medicines that are imported to Northern Ireland having been supplied directly from – or delivered via – Great Britain.

EU Environment Sub-Committee wrote earlier in 2020 expressing their concerns to Edward Argar MP,  Minister for Health.  The Department of Health and Social care formally replied on 10 November – informing the Committee that the European Commission: “has agreed to a 12 month grace period before the regulations have to be complied with, providing businesses with more time to prepare.”

In the meantime, the pharmaceutical industry from research to manufacturing to retail – in GB and NI – have raised practical concerns about the issues that they now face.  This has been widely reported elsewhere – some key links are included below.

For instance, at the time of writing, the EU has stated that will not recognise pharmaceuticals that carry only a ‘GB’ identification code.  Further, medicines must carry EU identification codes – and without this authentication, the Pharmacist is required to ‘quarantine’ all such packs.  Ultimately, this may mean new sources are required for drugs on the list of those presently dispensed in Northern Ireland.

Having considered the update concerning the grace period, Lord Teverson, Chair of the Committee, has written again on 25 November, saying that it welcomes the grace period, which relieves the immediate pressure and will allow businesses more time to prepare for any changes with regard to the supply of prescription medicines to NI consumers from 1 January.

However, the same uncertainties now apply from 2022, so the Committee urges progress in the coming months so that the grace period is not wasted – and has requested a response from the Minister within 10 days.

Background

The European Union Environment Sub-Committee examines EU policy on agriculture, energy, climate change, the environment, food, fisheries, biosecurity and public health. It also considers the environmental aspects of the UK-EU level playing field. This Committee is a Sub-Committee of the European Union Select Committee

On 11 November 2020 the Northern Ireland Affairs Committee heard from witnesses: Colette Goldrick, Executive Director, Strategy and Partnerships, Association of the British Pharmaceutical Industry; Dr Richard Greville, Director, Distribution & Supply and ABPI Cymru Wales, Association of the British Pharmaceutical Industry

At the time of writing – 1 December 2020 – the detailed guideline on the Gov.UK website reads: “Rules for importing medicines to Northern Ireland are different because of the Northern Ireland Protocol.  Further guidance will be published in due course.”

As part of the Brexit process, the European Medicines Agency – the licensing, approvals and regulatory authority for all medicines across the EU – was relocated with the loss of many specialist roles from London to Amsterdam in March 2019.

Reference

Supplying medicines to Northern Ireland from 1 January 2021 – GOV.UK (www.gov.uk)

Parliamentlive.tv – Northern Ireland Affairs Committee

https://committees.parliament.uk/publications/3693/documents/35937/default/

‘Another year needed’ to amend Northern Ireland medicines distribution post-Brexit – BelfastTelegraph.co.uk

Brexit: the United Kingdom’s withdrawal from the European Union | European Medicines Agency (europa.eu)