Although many of the provisions of the backstop remain the same, one of the major revisions concerns customs arrangements.

The old backstop essentially created a new customs union consisting of the UK and EU as well as aligning Northern Ireland to certain aspects of the single market.

The new backstop does something different.

Article 4 of the backstop states that ‘Northern Ireland is part of the customs territory of the United Kingdom’. So formally Northern Ireland remains within the UK customs territory.

However, Article 5 goes on, in effect, to place Northern Ireland in a customs union with the EU. This is because the EU customs legislation still applies to Northern Ireland, including the Union Customs Code and Common Commercial Tariff (see Article 5(3)), so that goods coming into Northern Ireland from outside the EU (including the Great Britain) are subject to the EU tariff (see Article 5(1) and 5(2)).

The only exceptions to this are the following types of good:

  • Goods not subject to commercial processing in Northern Ireland, the criteria for which will be further defined by the Joint Committee;
  • Goods which fulfil a risk based criteria established by the Joint Committee: this criteria has not been determined but shall take into account things like the final destination of the good and the nature and value of the good.

These goods will be treated as coming into or moving within the ‘UK customs territory’ as defined in Article 4: hence, there will be no duties for goods moving from Great Britain to Northern Ireland; similarly, the UK customs rate will apply to goods coming into Northern Ireland from outside the UK or the EU (see articles 5(1) and (2)). These goods will also be treated as having preferential origin under UK FTAs (see Article 4).

Further, there will be no duties payable by residents of the UK for personal property brought into Northern Ireland from another part of the UK. Neither will duties be payable on consignments of negligible value sent from one individual to another or on goods contained in a travellers’ personal baggage (see Article 5(7)) (as set out in the EU customs legislation).

Note that even if EU duties are levied on good going into Northern Ireland, subject to state aid rules in the protocol, the UK has the power to reimburse duties or waive the customs debt (see Article 5(6)).

In addition to this – many provisions of the single market will continue to apply to Northern Ireland (see Article 5(4)).

At the time of writing, the customs arrangements contained in the protocol are the subject of a legal challenge which argues that they breach section 55 of the Taxation (Cross-border Trade) Act 2018 which states: “It shall be unlawful for Her Majesty’s Government to enter into arrangements under which Northern Ireland forms part of a separate customs territory to Great Britain”.