Aiken PR

The Briefing

Irish Emergency legislation and island of Ireland impact

by Aiken PR

22/02/2019

The Irish Government has moved to potentially mitigate, where possible, key elements of a crash out Brexit by launching its Omnibus Bill today. If implemented this emergency legislation will have considerable policy impact across the island of Ireland. Notable elements for the business include Part 6 (Taxation) and Part 3 (Amendment to Industrial Development Acts 1986 to 2014)

The Irish Government has moved to potentially mitigate, where possible, key elements of a crash out Brexit by launching its Omnibus Bill today.  If implemented this emergency legislation will have considerable policy impact across the island of Ireland.  Notable elements for the business include Part 6 (Taxation) and Part 3 (Amendment to Industrial Development Acts 1986 to 2014)

At the announcement today the Tánaiste Simon Coveney said that a disorderly Brexit will be a “lose, lose, lose” for the UK, the European Union and for Ireland, restating his view that it would be a ‘shock to all our economies’.

The €4.8bn agri–food sector was again to the fore with the Tánaiste saying that it was particularly at risk should the UK ‘decide to impose the World Trade Organization’s trading rates and tariffs after it leaves the EU’.

The Bill, which is a landmark piece of legislation for Ireland, is designed to ‘protect Irish citizens, support jobs and secure ongoing access to essential services across the island’.

In addition to this, and particularly pertinent in its timing, was the European Commission’s statement on state aid.  It announced that Ireland and other member states will be allowed to increase state aid to farmers in times of crisis without seeking specific EU approval. Under the revised state aid rules, farmers will be able to receive up to €25,000 (from €15,000) in some circumstances in support from the government over a three–year period.

While the statement made no reference to Brexit, it is widely accepted that it is the EC’s first step in supporting farmers in the event of a crash out Brexit. 

What are the key points of the Irish Government’s Omnibus Bill?

  • It hopes the legislation is never used and that sits on the shelf
  • It is the work of nine Government ministers and departments who have worked on the legislation for more than a year
  • The work required a complete overhaul to assess potential policy changes
  • Ireland’s number 1 contingency is remaining a full member state of the EU, with all the support and solidarity
  • The bill encompasses 15 laws in one
  • An area that is being highlighted as particularly significant is a potential change to VAT law which will allow companies importing from the UK to continue to pay VAT in the same way they do now, alleviating significant tax flow challenges for SMEs
  • Grant aid and support for businesses to deal with the impact of a no–deal Brexit
  • It addresses welfare, with pensioners and other Irish welfare recipients living in the UK continuing to get payments
  • Also addresses practical issues, including cross–border arrangements for healthcare, (including reimbursement for UK treatment and travel to the UK for emergency organ transplants).
  • Protects the rights of Irish employees of British companies if they go insolvent.

What are the next steps?

W/C 25 Feb – Brexit Bill in 2nd Stage in Dáil

W/C 4 March – Brexit Bill in Committee, Report and Final Stage in the Dáil

W/C 11 March – Brexit Bill in Seanad

What exactly are the 15 elements of the Bill?

Part 1 – Preliminary and General

Commencement of the different parts of the Bill by relevant Ministers as appropriate.

Part 2 – Arrangements in relation to Health Services

Legislative provisions to enable essential Common Travel Area healthcare arrangements, including reimbursement arrangements, to be maintained between Ireland and the UK. (on basis of UK leaving the EU on 29 March 2019 without a withdrawal agreement)

Part 3 – Amendment to Industrial Development Acts 1986 to 2014

To offset negative effects of Brexit on vulnerable organisations providing Enterprise Ireland with further powers to support through investment, loans and RD&I.

Part 4 – Amendment of Electricity Regulation Act 1999

Critical to infrastructural development and civic well being in both ROI and NI the Single Electricity Market was established across the island of Ireland in2007.  Legislation will enable the Regulator (CRU) to quickly modify licences of Irish–based participants in the wholesale electricity market temporary basis (in the event of a no deal Brexit) to ensure that any issues of non–compliance with EU law can be addressed.

Part 5 – Amendment of Student Support Act 2011

After the UK leaves the EU, these arrangements can continue to apply to eligible Irish students studying in the UK, as well as the payment of SUSI grants to UK students in Irish higher education institutions.

Part 6: Taxation

Modify’ s Income Tax, Capital Tax, Corporation Tax and Stamp Duty legislation to ensure continuity for businesses and citizens.

Part 7 – Financial Services: Settlement Finality (Third Country Provisions)

Relates to European Commission’s equivalence decision / Central Securities Depositories (CSD) Regulation and protections to Irish participants in relevant third country domiciled settlement systems.

Part 8 – Financial Services: Amendment to the European Union (Insurance and Reinsurance) Regulations 2015 and the European Union (Insurance Distribution) Regulations 2018

Would provide for a temporary run–off regime enabling UK insurance undertakings and intermediaries to continue to fulfil contractual obligations to their Irish customers for a period of three years after the date of the withdrawal of the UK from the EU. 

Part 9 – Amendment of Harbours Act 1996

Would provide for an extension of the period of validity of Pilot Exemption Certificates issued by Harbour companies to relevant seafarers, e.g., to Ships Masters on ferries, from the existing maximum one–year period to a maximum of three years.   

Part 10 – Third Country Bus Services

Regulatory relationship for bus and coach passenger services regime between Ireland and a country which is not part of the EU e.g. Northern Ireland

Part 11 – Amendments to the Social Welfare Consolidation Act 2005

Would enable the Minister for Employment Affairs and Social Protection to make arrangements with other States.  The Department has finalised an agreement with the UK under the Common Travel Area, which effectively provides for the continuation of current arrangements post Brexit. 

Part 12 – Amendments to the Protection of Employees (Employers’ Insolvency) Act 1984

In the event of an employer becoming insolvent under the laws of the UK, their employees who work and pay PRSI in Ireland, will continue to be covered by the protections set out in the Act.

Part 13 – Amendment of Extradition Act 1965 

Would provide for the maintenance of arrangements in relation to extradition of citizens between Ireland and the UK under the 1957 Council of Europe Convention on Extradition.

Part 14 – Immigration

Would amend the Immigration Act 1999 and 2003 to confirm that immigration officers, in considering removing or deporting a person from the State, have, in line with EU and international obligations, the power to undertake refoulement consideration. 

Part 15 – Miscellaneous 

This provides that the term ‘Member State’ shall be interpreted as including the UK for the duration of any transition period.