The UK Chancellor this morning announced that the UK Government intends to reintroduce duty-free shopping for passengers travelling to EU countries if the UK leaves the EU without a deal on 31 October next. In these circumstances, the UK will assume the status of a ‘third country’ in terms of their trading relationship with the European Union.
Earlier this year, the Oireachtas passed extensive legislation covering contingency arrangements in relation to the exit of the UK from the EU under these circumstances and it is timely to clarify Ireland’s position should this specific policy on duty-free shopping be implemented by the UK Government in the event of no deal.
On 22 February, the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2019 was published. It completed all Oireachtas stages on 13 March and was signed into law by the President on 17 March 2019. The legislation introduced a specific measure relating to Duty Free sales between Ireland and the UK in a ‘no deal’ scenario. The provision contained in the Act was designed as a contingency measure in that it was anticipated that a solution to such matters would form part of a future relationship agreement between the EU and UK. The intention was to provide reciprocal protection to the UK in the event that the UK Government decided to restrict their Duty-Free scheme.
However, as the UK has today decided to apply an unrestricted Duty-Free scheme in the event that the country leaves the EU with no deal, in line with the reciprocal policy, Ireland would not in this eventuality commence the relevant legislative measure and European Union rules in relation to passenger travel from ports and airports between the EU and third countries would therefore apply from 31 October. In effect this would mean that Excise and VAT free sales on purchases of tobacco and alcohol made at duty-free shops, subject to quantitative purchase limits, would therefore operate between Ireland and the UK.
The UK Government announcement on duty free shopping does not apply to passenger travel on the island of Ireland, between North and South and there will be no duty-free regime for passenger travel between the two jurisdictions on the island. This policy is in compliance with EU law and Ireland’s international obligations.
Minister Donohoe commenting on the UK Government statement said: