Michael Gove has said he is “confident” that progress can be made in talks with the European Union over the Northern Ireland Protocol without Article 16 needing to be triggered.
Speaking at the British-Irish Council summit in Cardiff, the Cabinet minister said “a constructive approach” is being taken by both sides in the negotiations and that he believes the mechanism to suspend elements of post-Brexit trading arrangements won’t need to be enacted.
Image: EU Commission vice-president Maros Sefcovic said he hopes the UK’s ‘actions will follow the words’
The Northern Ireland Protocol prevents a hard border with Ireland by keeping Northern Ireland in the EU’s single market, but that meant checks on products crossing the Irish Sea from Great Britain.
It states that Northern Ireland will remain part of the UK’s customs territory however, and it will have to stick to some EU rules to allow goods to move freely into the Republic and rest of the EU.
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Article 16 allows either the EU or the UK to suspend parts of the Brexit withdrawal agreement if it is causing economic difficulties.
“(Brexit minister) Lord Frost has signalled that while, of course, it’s always possible that Article 16 may require to be invoked, we’re confident that we’ll be able to make progress without it,” Mr Gove said on Friday.
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The Cabinet minister added that there was clear “determination” from all negotiating parties to “make progress” in discussions.
“There’s a shared recognition that we do need to alter the operation of the protocol on the ground,” Mr Gove said.
He added: “I hope that we won’t need to trigger Article 16, for reasons that will be well understood, but we reserve the right to do so if we believe that changes which are required on the ground in Northern Ireland have not been made.”
Irish Prime Minister Micheal Martin said he believes all sides share “a common desire to get these issues revolved through negotiation”.
He urged both the UK and the EU to “turn the corner” and act in the “best interests of people in Northern Ireland on the ground”.
“It’s clear in the discussions this morning from all participants, an acknowledgement of the challenges of COVID to supply chains, the challenges of Brexit and what that means.
“The last thing we need is further disruption and, rather, the focus should be on resolving this.”
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‘Major consequences’ over NI protocol
Their comments came as Brexit minister Lord Frost and EU Commission vice-president Maros Sefcovic continue fresh talks on Friday to resolve issues related to the protocol.
Ahead of their latest meeting, Mr Sefcovic welcomed a “change in tone” from Lord Frost’s team but warned that a post-Brexit trade deal “cannot exist” without the protocol matter being settled.
He added that he hopes the UK’s “actions will follow the words”.
“Our solutions can become reality if the UK plays its part. That is why we have engaged constructively with the UK in order to agree joint solutions,” the EU Commission vice-president said.
“But we also make clear, with the full support of the European parliament and the member states, that we will not renegotiate the protocol.
“To do so would mean to put at risk the stability in Northern Ireland and it would be unnecessary because solutions are available within the framework of the protocol.”
Mr Sefcovic also said the bloc’s offer to permanently slash customs paperwork by 50% and remove up to 80% of checks would result in a “win-win situation” for all.
Lord Frost said “intensive and constructive talks have proceeded between the UK and EU teams”, adding: “There is the potential to generate some momentum in our discussions.”
But, speaking ahead of the meeting, he played down the prospect of progress, telling reporters there are still “significant gaps” between the UK and EU’s negotiating positions and that the option of triggering Article 16 of the Northern Ireland Protocol remains.
“Our preference is to see if we can find a negotiated way through this problem. If we can’t, Article 16 remains on the table,” he said.
Lord Frost added: “I wouldn’t expect any breakthroughs today but there are some issues that we are making better progress on than others.”
After the meeting, the UK’s Brexit minister said the two parties have “not yet made substantive progress on the fundamental customs and SPS (plant, human and animal health) issues relating to goods moving from Great Britain to Northern Ireland”.
Lord Frost also confirmed that he and Mr Sefcovic will reconvene for further talks on 26 November.
The shutdown of the US government entered its 38th day on Friday, with the Senate set to vote on a funding bill that could temporarily restore operations.
According to the US Senate’s calendar of business on Friday, the chamber will consider a House of Representatives continuing resolution to fund the government. It’s unclear whether the bill will cross the 60-vote threshold needed to pass in the Senate after numerous failed attempts in the previous weeks.
Amid the shutdown, Republican and Democratic lawmakers have reportedly continued discussions on the digital asset market structure bill. The legislation, passed as the CLARITY Act in the House in July and referred to as the Responsible Financial Innovation Act in the Senate, is expected to provide a comprehensive regulatory framework for cryptocurrencies in the US.
Although members of Congress have continued to receive paychecks during the shutdown — unlike many agencies, where staff have been furloughed and others are working without pay — any legislation, including that related to crypto, seems to have taken a backseat to addressing the shutdown.
At the time of publication, it was unclear how much support Republicans may have gained from Democrats, who have held the line in demanding the extension of healthcare subsidies and reversing cuts from a July funding bill.
Is the Republicans’ timeline for the crypto bill still attainable?
Wyoming Senator Cynthia Lummis, one of the market structure bill’s most prominent advocates in Congress, said in August that Republicans planned to have the legislation through the Senate Banking Committee by the end of September, the Senate Agriculture Committee in October and signed into law by 2026.
Though reports suggested lawmakers on each committee were discussing terms for the bill, the timeline seemed less likely amid a government shutdown and the holidays approaching.
Japan’s financial regulator, the Financial Services Agency (FSA), endorsed a project by the country’s largest financial institutions to jointly issue yen-backed stablecoins.
In a Friday statement, the FSA announced the launch of its “Payment Innovation Project” as a response to progress in “the use of blockchain technology to enhance payments.” The initiative involves Mizuho Bank, Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, Mitsubishi Corporation and its financial arm and Progmat, MUFG’s stablecoin issuance platform.
The announcement follows recent reports that those companies plan to modernize corporate settlements and reduce transaction costs through a yen-based stablecoin project built on MUFG’s stablecoin issuance platform Progmat. The institutions in question serve over 300,000 corporate clients.
The regulator noted that, starting this month, the companies will begin issuing payment stablecoins. The initiative aims to improve user convenience, enhance Japanese corporate productivity and innovate the local financial landscape.
The participating companies are expected to ensure that users are protected and informed about the systems they use. “After the completion of the pilot project, the FSA plans to publish the results and conclusions,” the announcement reads.
The announcement follows the Monday launch of Tokyo-based fintech firm JPYC’s Japan-first yen-backed stablecoin, along with a dedicated platform. The company’s president, Noriyoshi Okabe, said at the time that seven companies are already planning to incorporate the new stablecoin.
Recently, Japanese regulators have been hard at work setting new rules for the cryptocurrency industry. So much so that Bybit, the world’s second-largest crypto exchange by trading volume, announced it will pause new user registrations in the country as it adapts to the new conditions.
Local regulators seem to be opening up to the industry. Earlier this month, the FSA was reported to be preparing to review regulations that could allow banks to acquire and hold cryptocurrencies such as Bitcoin (BTC) for investment purposes.
At the same time, Japan’s securities regulator was also reported to be working on regulations to ban and punish crypto insider trading. Following the change, Japan’s Securities and Exchange Surveillance Commission would be authorized to investigate suspicious trading activity and impose fines on violators.
The European Union is considering a partial halt to its landmark artificial intelligence laws in response to pressure from the US government and Big Tech companies.
The European Commission plans to ease part of its digital rulebook, including the AI Act that took effect last year, as part of a “simplification package” that is to be decided on Nov. 19, the Financial Times reported on Friday.
If approved, the proposed halt could allow generative AI providers currently operating in the market a one-year compliance grace period and delay enforcement of fines for violations of AI transparency rules until August 2027.
“When it comes to potentially delaying the implementation of targeted parts of the AI Act, a reflection is still ongoing,” the commission’s Thomas Regnier told Cointelegraph, adding that the EC is working on the digital omnibus to present it on Nov. 19.
EU’s AI Act entered into force in August 2024
The commission proposed the first EU AI law in April 2021, with the mission of establishing a risk-based AI classification system.
Passed by the European Parliament and the European Council in 2023, the European AI Act entered into force in August 2024, with provisions expected to be implemented gradually over the next six to 36 months.
An excerpt from the EU AI Act’s implementation timeline. Source: ArtificialIntelligenceAct.eu
According to the FT, a bulk of the provisions for high-risk AI systems, which can pose “serious risks” to health, safety or citizens’ fundamental rights, are set to come into effect in August 2026.
With the draft “simplification” proposal, companies breaching the rules on the highest-risk AI use could reportedly receive a “grace period” of one year.
The proposal is still subject to informal discussions within the commission and with EU states and could still change ahead of its adoption on Nov. 19, the report noted.
“Various options are being considered, but no formal decision has been taken at this stage,” the EC’s Regnier told Cointelegraph, adding: “The commission will always remain fully behind the AI Act and its objectives.”
“AI is an incredibly disruptive technology, the full implications of which we are still only just beginning to fully appreciate,” Mercuryo co-founder and CEO Petr Kozyakov said, adding:
“Ultimately, Europe’s competitiveness will depend on its ability to set high standards without creating barriers that may risk letting innovation take place elsewhere.”
The EU’s potential suspension of parts of the AI Act underscores Brussels’ evolving approach to digital regulation amid intensifying global competition from the US and China.