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Does Article 16 Authorize the UK to Delay Implementation of the Protocol?

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Written by Orlando Smith

American lawyer Orlando Smith judges that Prime Minister Johnson is not breaking international law by extending the grace periods for the Northern Ireland Protocol. His actions lie within the legal scope of the Protocol itself.

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If the Northern Ireland Protocol’s inspection regime had gone into effect on 1 April 2021, it would have caused hardship for Northern Ireland’s consumers and businesses. Increased costs and delays on imports from the rest of the UK into Northern Ireland would have caused businesses not to have supplied goods, including some essentials such as food, to the people of Northern Ireland in a timely manner and at an affordable costs, or even at all.  Some business would even have been pushed into administration, and consumers would have faced bare shelves at their grocers.  In some cases, there may have also been shortages of medicine and other essential goods.  No British Prime Minister could permit that, no matter what agreements might say, or how they would be interpreted, by a foreign court or a foreign power.[1]

Is Johnson’s Delay of the Full Implementation of the NI Protocol Legal?[2]

Fortunately, the law provides several remedies, to simply legislate to reform the Withdrawal Agreement, so that it “ensures the sovereignty of the United Kingdom and the protection of its internal market,”[3] as Prime Minister Johnson nearly did earlier with his Internal Markets bill.[4]  Here, I am going to deal with just one of those laws.  That is Article 16 of the NI Protocol as set forth at Withdrawal Agreement, Page 101 and in its Annex 7.    Art. 16, Para. 1 says that:

If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the United Kingdom may unilaterally take appropriate safeguard measures. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Protocol.

Despite all of the howling to the contrary, Article. 16, Para. 1 expressly permits the UK to unilaterally take appropriate safeguard measures to relieve serious economic, societal, or environmental difficulties or the diversion of trade occasioned by the application of the NI Protocol.  There is no need to formally invoke article 16. PM Johnson’s only obligation under Article 16 is to give the EU one month’s notice and to enter into consultations with the EU about the measures adopted, in order to try to find an agreed solution. Lord Frost, has done all of that.[5]

So yes, the Prime Minister can lawfully unilaterally delay the full implementation of the NI Protocol, as he has done, for the reasons that he has. Even the current limited application of the NI Protocol is doing serious economic harm to Northern Ireland’s businesses, disrupting the supply of goods to its people, and seriously disrupting trade between Northern Ireland and the rest of the UK. There is no doubt, therefore, that the fully implemented Protocol would have done more and even worse harm.  In short, the Protocol, in even its limited form has worked to disrupt Northern Ireland’s commerce and its trade with the rest of the UK, and its full implementation would have been an even more disruptive failure, inflicting suffering and loss on the people of Northern Ireland.  And, although Prime Minister Boris Johnson has placed a self-imposed time limit of six months on his delay of the full implementation of the NI Protocol, there is no time limit on the duration of those safeguard measure in Article 16.  The safeguard measures may exist as long as the difficulties that gave rise to them exist, unless and until the parties can mutually agree on an alternative solution to the difficulties that caused PM Johnson to invoke the safeguards. That is, the UK’s safeguards can indefinitely delay the implementation of the NI Protocol, as long as the difficulties remain.

Proportionate Rebalancing

If the EU is getting less than it bargained for as a result of the UK’s safeguard measures, it has recourse to proportionate rebalancing measures as set forth in Art. 16, Para. 2[6]  The purpose of rebalancing is to compensate the EU for any loss of the value of its bargain under the NI Protocol.  Rebalancing is compensatory, not punitive, in nature, being designed to restore to the EU the value of what the EU would have received under the fully implemented NI Protocol, and it is limited to what is necessary to compensate the EU by, in effect, restoring the value of it’s loses as a result of the safeguards.

There are two categories of performance that arise because of the safeguards:  One, is consultation, which must occur at least quarterly, where the UK and EU try to come to some agreed solution that makes the safeguards unnecessary by agreeing to a solution in lieu of the safeguards that eliminates the difficulties that gave rise to them. Second, there is the compensatory proportionate rebalancing[7] that the EU may seek, provided that it is no more than compensatory for the damages that it suffers as caused by the safeguarding measures. Since Art. 16 itself makes it clear that there should not be provisions, interpretation of provisions, solutions, or anything else that disrupts Northern Ireland’s economy, society, trade, or environment, therefore, the rebalancing measures must not create new difficulties in those areas.

So, what does proportional rebalancing to restore the value of the EU’s bargain concretely mean?  It means going to the very purpose of the NI Protocol, which is to protect the EU’s Single Market and Customs Union.  And the principal harms that can happen to Single Market and Customs Union are contraband goods, that is, goods that aren’t properly taxed or tariffed, and/or nonconforming goods, that is, goods that don’t comply with EU regulations.[8]  But compensatory rebalancing that the EU is entitled to is the value of the harm of contraband goods entering the Single Market. That is a definite and discrete amount of damages that are compensable in money or other property.  But it is an amount that exceeds zero only to the extent that the loss value, plus the harm, of contraband goods is significantly greater than zero.[9]

If Prime Minister Boris Johnson and Lord Frost can devise and so manage their program of safeguards during the extension of the grace period, in lieu of full implementation of the NI Protocol, the EU’s rebalancing might amount to no more than zero.  And who knows, such UK practice might show the way to a solution that permanently modifies the NI Protocol. This could eliminate the difficulties that occasioned the safeguard of extending the grace period, delaying the full implementation of the NI Protocol which was already disrupting Northern Ireland’s trade and economy and societal difficulties that jeopardized, inter alia, the Good Friday Agreement. At the same time, it might also reduce the import of contraband goods into the EU Single Market to a less than economically significant effect level.  Wouldn’t that be a joy?  Let’s hope that it comes to pass.[10]

The Delayed Implementation of the NI Protocol Poses No Jeopardy to the Good Friday Agreement

We needn’t worry about the howling and baying on behalf of the Good Friday Agreement.  Prime Minister Johnson isn’t proposing a hard border anywhere, not at Northern Ireland’s ports of entry and certainly not at the Northern Ireland, Republic of Ireland border.  All he proposes to do is continue the grace period to delay the full implementation of the NI Protocol’s Regime, its regimes of inspection, red tape, and duties.  That is not imposing a border.  The only legal remedy available to the EU, whether by making a claim or as a result of judgment in court, is just money, not a border between Northern Ireland and the Republic of Ireland.  Why people started taking about borders or the need for a border in response to Prime Minister Johnson’s safeguard of delaying full implementation of the NI Protocol, in order to prevent economic and societal harm in Northern Ireland, can only be explained by them reacting before reading the law, or that they were intentionally engaging in demagoguery and propaganda.  All the EU can do pursuant to Article 16 in response to Johnson extending the grace period to delay the full implementation of the NI Protocol is recover proportionate damages for the harm caused by the UK’s extending the grace period.  All the UK is doing, pursuant to the authority of Article 16, is extending the grace period to delay the full implementation of the NI Protocol that, if fully implemented, would do serious harm to trade and commerce in Northern Ireland.  Neither of those things is a border or can result in a border.  Or to put it another way:  If the EU imposed a border on the Island of Ireland in response to the UK delaying the full implementation of the NI Protocol, instead of seeking and accepting proportionate damages, as Article 16 mandates, it, not the UK, would be violating the NI Protocol and international law.

Conclusions

The NI Protocol anticipates in its Article 16 that the implementation of the NI Protocol could cause difficulties that would need to be addressed by remedial safeguards.  It provides for the Party, who might suffer damages as a result of those safeguards, to be proportionately compensated to the extent of its damages.  It also provides for the Parties to engage in consultations to try to reach an agreed solution to either eliminate the safeguards in favor of an alternative solution to the difficulties that the safeguards relieve, or even to officially approved of the safeguards.  Just read Article 16, and you will see that it addresses just this situation, the need for safeguards, such as the delay of fully implementing the NI Protocol, and for compensatory damages for the Party suffering loss because of those safeguards, and it does it all without any mention of or need for borders.  And thus, Art. 16 handles the instant problem of delaying the full implementation of the NI Protocol, and protects the Good Friday Agreement, because it lawfully handles the problem without imposing any borders and without disturbing the status quo ante with respect to the Good Friday Agreement.


Orlando Smith is a retired lawyer formerly with BakerHostetler  based in Cleveland, Ohio

[1]     Nor would any Prime Minister of the United Kingdom need to do that, for Parliament has the power to legislate to ensure that the UK’s sovereignty is respected and that its internal market is protected.  See, for its discussion the U.K.’s sovereign prerogative to legislate, Why UK law must prevail over the EU Withdrawal Agreement, Martin Howe, Q.C. Briefings for Britain at https://briefingsforbritain.co.uk/why-uk-law-must-prevail-over-the-eu-withdrawal-agreement/.

[2]     The correct way of stating this is whether the UK’s decision to unilaterally to extend the grace period to delay the full implementation of the NI Protocol complies with the WA’s terms, because a sovereign nation can’t break international law by simply voiding or disregarding the terms of a treaty, because that is a prerogative of sovereignty, subject to the consequences of doing so, as the EU has done many times.  See:  Why UK law must prevail over the EU Withdrawal Agreement, supra.  So, while a sovereign nation can breach a treaty, that isn’t a violation of international law, because that breach is a prerogative of sovereignty.  However, a breach might lead to adverse consequences.

[3]     Quoted from the EU-UK Joint Political Declaration, Paragraph 4, as the EU declared, promised, and committed to ensuring the UK’s sovereignty and protecting the UK’s internal market.

[4]     United Kingdom Internal Market Act 2020 at https://en.wikipedia.org/wiki/United_Kingdom_Internal_Market_Act_2020.

[5]     Can the EU demand that the PM formally invoke Art. 16?  Perhaps, it can, but that is a formality.  What’s important is that Prime Minister Boris Johnson, through Lord Frost, has satisfied the procedural requirements of Art. 16, and, thus, is legitimately operating under it.  If EU Vice President Marcos Sefcovic demands that Lord Frost formally invoke Art. 16, Lord Frost can satisfy him in due course.

[6]     If a safeguard measure taken by the Union or the United Kingdom, as the case may be, in accordance with paragraph 1 creates an imbalance between the rights and obligations under this Protocol, the Union or the United Kingdom, as the case may be, may take such proportionate rebalancing measures as are strictly necessary to remedy the imbalance. Priority shall be given to such measures as will least disturb the functioning of this Protocol.

[7]     Proportionate rebalancing is similar to the common-law concepts of damages and equitable restitution.

[8]     hereinafter, collectively “contraband goods.”

[9]     There is no need for Lord Frost to reach into his pocket for change if the odd egg or a loaf of bread slips through.

[10]   And the United States could return to its proper position of being a neutral party in this dispute, which uses its good offices to help the Parties to their own fair solution.  And there is a silver lining, even here.  Who knew, before this, that people of Northern Ireland had such a concerned friend in the EU?  It just shows how a trade dispute with the UK and the EU’s objections to UK’s sovereignty and to the UK competing with it can inspire in the EU such hitherto almost unnoticed devotion and affectionate regard for Northern Ireland’s people.  It is truly moving.  And the EU and UK can make the most of it by simply following a straightforward reading of Article 16.

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Orlando Smith