Ministers are targeting four areas for reform in the Bill, which is designed to assuage Unionist concerns that the Protocol is undermining the province’s place in the UK.
They will gain powers to make all of the changes outlined but will have to pass separate legislation to activate each of the different proposals.
The legislation could take more than a year to navigate Parliament and in the meantime the Protocol will stay in force to ensure stability for businesses.
Liz Truss, the Foreign Secretary, will also carry on talks with Brussels and the legislation contains a “kill switch” meaning it can be superseded by any new agreement.
Under the Withdrawal Agreement, Northern Ireland stayed in the EU’s single market to ensure there was no need to reinstate a hard land border with the Republic.
As a result, Brussels’ customs checks had to be moved into the Irish Sea and are now carried out on shipments travelling between Great Britain and Ulster.
The Government says this has led to “disproportionate and unsustainable” red tape that is heaping huge costs on businesses and harming consumer choice.
It points out that “full” controls have to be carried out on all goods headed to the province even though only a sixth of them are “at risk of entering the EU’s market”.
Green and red lanes
Under the new legislation the current regime will be replaced with a new system of green and red lanes that would eliminate almost all border checks.
Products arriving from Great Britain that are marked as only for sale in Northern Ireland, such as many supermarket goods, will be subjected to no red tape.
Only those shipments destined to head onwards to the Republic, and potentially the rest of the bloc, will have to go through the full panoply of customs controls.
Some goods which are currently banned by EU rules from entering Northern Ireland, such as seed potatoes, plants and trees, would be allowed under the green lane system.
Meanwhile the red lane would only apply to businesses meaning all personal shipments including letters, cards and parcels would be exempted from customs checks.
The system will be underpinned by beefed up data sharing, with Brussels being handed real-time information on shipments to ease fears about potential fraud.
To qualify for green lane status companies must sign up to a Trusted Trader scheme and any that flout the rules face huge fines and having their access revoked.
Dual regulatory system
There will also be a new “dual regulatory system” meaning firms importing into Northern Ireland will be able to choose whether to follow UK or EU standards.
It will ensure consumers can still enjoy access to products which are available in Great Britain even after Westminster diverged from some Brussels rules.
Shoppers in Ulster currently face being deprived of favourite lines in future, with ministers warning that unless changes are made there could be “gaps on supermarket shelves”.
One example the Government gives is an EU review of “traffic light” food labelling which risks “the discontinuation of thousands of product lines in Ulster if it goes ahead.
Under the new system goods will be labelled as either UK compliant, EU compliant, or both, and there will be “stringent penalties” for companies that sell into the wrong market.
Companies shipping agrifood products, which are considered the highest category risk by the EU, would have to go through the Trusted Trader Scheme offering extra protection.
British authorities would carry out spot checks in shops across the province with powers to seize any goods on the shelves that didn’t comply with the rules.
Tax and state aid
Thirdly, the Bill will allow ministers to take back control of tax and state aid in Northern Ireland meaning it can benefit from the same policies as the rest of the UK.
Ulster has to apply the bloc’s rules in those areas, with complaints that the Protocol has slowed down Covid funding and stopped VAT cuts on solar panels.
Under the new measures the province will still use EU rules but the Government will be able to unilaterally apply its own tax and state aid decisions on top of them.
Ministers point out there is “minimal risk” to the bloc given the Britain’s “track record as a low-subsidy area – often significantly lower than comparable member states”.
When the changes are introduced the management of tax and state aid spending in Northern Ireland would be based on the looser terms in the wider EU-UK trade deal.
European Court of Justice
Finally the legislation will strip the ECJ of many of its powers and set up an independent arbitration system to oversee the application of the Protocol.
European judges will still have an indirect role in policing the agreement, being called in to adjudicate in cases where interpretations of EU law were required.
But crucially the Commission is set to be deprived of its ability to directly refer disputes to the Strasbourg-based court as its “first port of call…when issues arise”.
The UK Government and Unionists have complained that the current governance of the Protocol is undemocratic and leaves Belfast without a say on the rules it must apply.
More than 4,000 new EU rules have been enforced in Northern Ireland since the start of 2021 including ones which restrict the province’s imports of steel and New Zealand lamb.