The Department of Enterprise Trade and Employment has published a draft new law to protect Irish critical technology and infrastructure from potentially harmful non-European foreign investment.  The Screening of Third Country Transactions Bill 2022 legislatesto curb so-called “third country” (meaning non-European Union/non-European Economic Area countries) hostile actors using ownership of, or influence over businesses and assets in the Irish state to harm Ireland’s security or public order. 

First time to screen

It will be the first time Ireland has screened investment from a non-European country with a view to halting that investment if it poses such a threat.  The draft new law responds to the EU Investment Screening Regulation (EU) 2019/452 (“Regulation” – see more in Covington blogs here and here) which allows – but does not oblige – European Union Member States to screen foreign investment for risks to their security or public order.  

EU fears

The Regulation reflected a growing concern within Europe about the purchase of strategic European companies by foreign-owned firms, those concerns now heightened as a result of Covid and, more recently, by the war in Ukraine. 

The European Commission (“EC”) guided on June 22 2021, that “(s)uch transactions may put European collective security or public order at risk, especially when foreign investors are state owned or controlled, including through financing or other means of direction…while remaining open to investment, the EU is equipped to protect its essential interests.” 

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On Monday 13 June, the UK Government tabled a Northern Ireland Protocol Bill (The NIP Bill) giving it the power to dis-apply parts of the N Ireland Protocol (NIP), an integral part of the EU-UK Trade and Cooperation Agreement (TCA).  The EU’s response was immediate: unfreezing the 2021 legal action commenced in response to the UK’s unilateral decision not to apply checks to incoming goods from GB to N Ireland.  In the months to come, the UK may face a second legal action by the EU in respect of The NIP Bill.  Without resolution, this issue could ultimately undo the TCA, igniting a trade war between the EU and the UK.

On 14 June, the first UK Government flight taking asylum seekers and refugees from the UK to Rwanda was prevented from taking off by a last minute intervention by an ECHR Judge.   This intervention triggered a backlash among right-wing politicians and commentators, who began to call for the UK to withdraw from the Convention itself – a suggestion which was not discounted by the PM when he was asked about it later.  It will take several months for the courts to decide whether the policy is legal: during that time, the Government appears to have accepted that no more flights to Rwanda can depart, leaving its flagship immigration policy equally grounded.

But the question of membership of the ECHR matters not only for the important principle of international protection of human rights, but because the ECHR is one of the pillars on which the Good Friday Agreement (GFA) rests.  The GFA brought an end to 30 years of The Troubles, and imposed an obligation on the UK to incorporate the Convention into the law of N Ireland to make it directly enforceable in N Ireland’s courts. The UK’s 1998 Human Rights Act did this.  Leaving the ECHR, therefore, to force through the Rwanda asylum policy, would breach the GFA, which the UK Government argues The NIP Bill is intended to defend. 

How did we get here?

Continue Reading Northern Ireland Protocol and the ECHR

Northern Ireland’s 30 years of ‘Troubles’ were brought to an end by the 1998 Good Friday Agreement (the GFA). The GFA was based on the principle of cross-community support from both nationalists and unionists: a delicate compromise which sought a middle path between the Unionists – who see N Ireland as an integral part of the UK – and the Nationalists – who view the future of N Ireland as lying in reunification with the Republic.

The success of the GFA was underpinned by the fact that both the UK and the Republic of Ireland were in the EU.  Whilst both countries were members of the EU, there was no need for a border between N Ireland the Republic – goods and services could flow unimpeded across the border.  Leaving the EU required a bespoke solution to N Ireland – one that respected the GFA and did not reimpose a physical border between N Ireland and the Republic: a visible manifestation of a divided island.

Squaring the circle of respecting the GFA, whilst taking the UK as a whole out of the EU, was always the most complicated part of Brexit. With the UK outside the EU, a customs border would be required somewhere: it could not be between N Ireland and the Republic, because of the need to respect the GFA and avoid antagonizing the Nationalist community. The only place that border could be therefore, was in the Irish Sea between N Ireland and the rest of GB – which risked irritating the Unionist community.

The Northern Ireland Protocol

The solution to this delicate balancing act was the Northern Ireland Protocol (the NIP), which left N Ireland in the EU Single Market, but brought it out of the Customs Union, enabling N Ireland to have the best of both worlds, with one foot in the UK and the other in the EU.  However, the NIP imposed checks on goods (especially food and medicine) from GB arriving into N Ireland, to ensure they complied with EU standards and avoid the risk of them leaking into the EU Single Market through the back door: these checks have so far been unilaterally postponed by the UK.

Elections add to the complexity…

Continue Reading The UK and the Northern Ireland Protocol (again!)

The Background

In 1998, the UK and The Republic of Ireland signed the Good Friday Agreement (GFA) bringing to an end 30 years of conflict in N Ireland.  The GFA was possible at least in part because both the UK and Ireland were Member States of the EU, meaning there were no external borders to the EU or the UK in Ireland and enabling EU Law to provide a legal framework.

The GFA, strongly supported by the US and the EU, relied at its core, on mutual acceptance – S Ireland and Irish Nationalists accepted that N. Ireland was part of the UK and the UK agreed to remove physical security infrastructure on the N/S Ireland Border.

The issue of borders is at once problematic and emblematic, with the Unionist community feeling strongly that N. Ireland is part of the UK and the Nationalist community objecting to a N/S Ireland border as a physical barrier to their long-terms hopes of Irish reunification. The GFA accordingly struck a careful crafted and very delicate balance between the two communities.

Brexit…

Brexit upset that delicate balance.  The Nationalist community largely voted Remain, whilst the Unionist community largely voted Leave.  N. Ireland overall voted to remain in the EU.  The UK’s departure from the EU meant that the N/S Ireland border became not only the border between Ireland and the UK, but the only land border between the mainland UK and the EU.

To preserve the benefits of the GFA whilst protecting the EU’s Single Market, the UK and the EU agreed the Northern Ireland Protocol (NIP), which preserved the Common Travel Area between the UK and Ireland and left N. Ireland in the UK’s Customs Union, but the EU’s Single Market – effectively placing the UK/EU border for Customs Controls in the N Sea between GB and N. Ireland for goods ‘at risk’ of entering the EU via N. Ireland. This arrangement avoided a ‘hard border’ between N and S Ireland and meant that N. Ireland was the only part of the UK to benefit from being in both Unions at the same time.

What has happened since January 2020?

The immediate consequences both of Brexit itself and the NIP are an increase in trade between N. and S. Ireland and a reduction in trade between Ireland and the UK as EU produce (inbound and outbound) has increasingly been dispatched by sea direct from S. Ireland to the European Mainland, by-passing the UK which had been used as a land-bridge for Irish exports whilst the UK was in the EU.

These two changes have raised concerns amongst the Unionist community that the longer-term impact of Brexit and of the NIP is to increase the chances of a United Ireland (the GFA allowed for the possibility of a Border Poll should communities so wish). This concern, added to the number of checks on GB/N Ireland exports, has led to a deterioration in security in N Ireland.  It is against this complicated backdrop that the EU and the UK are seeking to tweak the NIP to facilitate trade between GB and N. Ireland and reduce the number of customs checks carried out on that border.

Article 16….

Buried in the midst of the NIP is the now infamous Article 16 which states at paragraph 1 “If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade… [one side]… may unilaterally take appropriate safeguard measures”.  Paragraph 2 notes “If a safeguard measure taken…. in accordance with paragraph 1 creates an imbalance between the rights and obligations under this Protocol, the [other side] may take such proportionate rebalancing measures as are strictly necessary to remedy the imbalance.”

UK Complaints

The UK is concerned that the application of the NIP has imposed significant new customs formalities on GB-N. Ireland exporters, resulting in extra costs and discouraging trade.  Under the NIP, after a series of grace periods, the UK was supposed to gradually bring in checks on a broadening range of goods and products exported from GB to N. Ireland.  However, as the impact of those checks became clear, the UK took the decision to unilaterally suspend them.

Of particular concern to the UK government are:
Continue Reading The EU, The UK and The Northern Ireland Protocol (again!)

The fragility of Northern Ireland politics continues to prove problematic in dealing with Brexit. The on-going efforts of the UK government to redefine the Northern Ireland Protocol agreed with the EU last December is testament to that. Such efforts may be politically appealing in advance of UK local elections next May, but they too are

The European Commission Vice President and Co-Chair of the Europe-UK Joint Committee, Maroš Šefčovič,  spoke to a meeting of the Irish Institute of International and European Affairs yesterday about the Ireland/Northern Ireland protocol.  He spoke of the political risk and the efforts being made to reach a compromise between the EU and the UK on

The Irish authorities are currently preparing a number of interesting pieces of new legislation – some to simply deal with Covid or to comply with European requirements, others relating to more domestic issues and a number will implement international obligations.  However surprisingly few are Brexit related.

Traditionally there are an average of over 60 new

Ireland is beginning to emerge from the shades of Covid with almost full opening of the economy now planned for October 22nd.  It brings with it some significant changes to working lives, education and business and while the signals are optimistic, caution is in the air.

The Irish have followed a conservative approach to the

Lobbying.  The descriptor we use for seeking to influence key decision makers. It’s been a part of commercial life for centuries and many societal structures were and are built on it such as the medieval guilds, modern trade associations, and a myriad of other bodies who exist to influence, persuade and argue.  Law firms too.