1. Research Knowledge Base
  2. Cross-Border trade and North/South comparisons

Regulatory Barriers to Cross-Border Trade and Business

June 2009

Executive Summary 

Key findings 

The aim of this study is to identify where differences in regulation impose a significant cost to businesses that wish to operate on both sides of the border. 

From the scoping and mapping exercises

  1. In order to select the regulations for the study, a number of criteria were established in consultation with the Steering Group. These included cross-sectoral application, likely familiarity, relevance to business, length of time in force, and potential cost to business and are detailed in Table 1 below. 

  2. Regulations were assessed against these criteria and other factors, such as the desire to include areas with potentially significant and widespread impact such as employment regulations. The scoping exercise phase of this assignment was substantial, serving to underline the complexity and scale of the regulatory landscape for businesses. Once a long list of legislation was selected, a short list of regulations was created based on the above criteria and including some pieces of legislation in certain broad areas, for example, employment in order to achieve a spread of regulatory areas in the final sample. However, it was also agreed with the Steering Group that, if new or other legislation was cited by the businesses participating in this research, these regulations would also be referenced in this report. The long list of regulations is presented in Appendix 1.

  3. The shortlist of regulations/areas that emerged from the scoping phase are presented in Table 2. 

Table 1: Selection criteria for regulations

Cross-sectoral  The regulation should not be tied to one distinct trade or sector.
Familiarity  It should not be unreasonable to assume a general familiarity with the area of regulation.
Relevance to business  The regulation should be aimed at businesses or a function of a business and not society at large. For example, speed limits will clearly have an impact on the speed of delivery for goods but they apply to all members of the public. However, weight restrictions for heavy goods vehicles and rest times for drivers will be directly applicable to the transport industry.
Length of time in force There should be a general working knowledge of its requirements. For example, much of our understanding of the requirements of a regulation comes from case law interpretation. With new legislation, it may well be that there is not a sufficient body of case law to properly assist an examination of its impact. However, it was recognised that businesses may well refer to such new legislation in the context of their compliance activity and it was also recognised that this lack of case law might also give rise to differences in understanding.
Potential cost to business There should be some evidence, anecdotal and/or on the basis of a clear reading of the regulation, that it has the potential to have a cost burden on trade.

Table 2: The short listed regulations 

Northern Ireland  Ireland  Aim Enforcement
Data Protection Act 1998 Data Protection Act 1988, as amended by the European
Communities (Data Protection) Regulations 2001 and the Data Protection (Amendment) Act 2003 
An Act to make new provision for the regulation of the processing of information relating to individuals, including the obtaining, holding, use or disclosure of such information. The Data Protection Act doesn’t guarantee personal privacy at all costs, but aims to strike a balance between the rights of individuals and the sometimes competing interests of those with legitimate reasons for using personal information. It applies to some paper records as well as computer records. Information Commissioner’s
Office (NI); Data Protection
Commissioner (Ireland)
Consumer Protection (Distance Selling) Regulations 2000  EC (Protection of Consumers in respect of contracts made by means of distance communication) Regulations
The Regulations apply to contracts for goods or services to be supplied to a consumer where the contract is made exclusively by means of distance communication that is any means used without the simultaneous physical presence of the consumer and the supplier. Examples of distance selling include selling via: the internet, text message, phone call, fax and interactive TV or mail order. The Department of Enterprise, Trade and Employment (Ireland) The Department
of Enterprise, Trade and
Investment in Northern Ireland
The Working Time Regulations (NI) 1998  The Organisation of Working Time Act 1997  The Working Time Regulations (Northern Ireland) 1998 and The Organisation of Working Time Act 1997 implement the Working Time Directive. The aim of the Directive is to ensure that workers are protected against adverse effects on their health and safety; caused by working excessively long hours or having inadequate breaks.  Employment Tribunals (NI); The Rights Commissioner
in the first instance and on
appeal, to the Labour Court
The Transfer of Undertakings (Protection of Employment) Regulations 2006 The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003  The TUPE regulations protect employees’ terms and conditions when a business or undertaking, or part of one, is transferred to a new employer. Employment Tribunals (NI); The Rights Commissioner in the first instance and on appeal, to the Employment Appeals Tribunal (Ireland)
Construction Industry Scheme Relevant Contracts Tax The Construction Industry Scheme and Relevant Contracts Tax sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry.   Her Majesty’s Revenue & Customs; The Irish Revenue
Commissioners (Ireland)
Immigration Act 1971  Immigration Act 1999 as amended by the Immigration Act 2003 The Immigration Acts control immigration and those non EEA individuals who wish to enter, work or remain in the UK or Ireland. An immigration officer of the UK Immigration Service, the distinctive operational arm of the UK Border and Immigration Agency (BIA) of
the Home Office (guidance) An immigration officer of the
Garda National Immigration


4.  The six selected regulatory areas were then mapped to identify the key differences between the relevant pieces of legislation in the North and South. There are a number of key findings for this study which emerged from this research and which underline the view that there is “no golden key” to reducing administrative burdens.

5.  The mapping exercise illustrated that there are a number of ways in which differences in legislation, North and South, can impact on business. The key findings are summarised under five headings in Table 3. 


Table 3: Desk research - key findings  

Finding Example

Difficulty in sourcing equivalent regulations

The PwC corporate legal team had to use a variety of sources to identify and map the equivalent legislation North and South, including consultations with counterparts in the PwC Dublin office. This mirrors the process which businesses would have to undertake in exploring the obligations on them in the other jurisdiction. It is likely that SMEs in particular would have difficulty in distinguishing the comparable legislation.
Duplication requirements in relation to compliance matters  A business which holds or processes data in Northern Ireland and is also established in Ireland has to register with the data commissioner and maintain that registration appropriately in both jurisdictions.
Subtle but important differences in regulation
essentially aimed at the same mischief
Pursuant to the distance selling regulations, in the case of telephone communication in relation to distance sales in Northern Ireland, the identity of the business and the reason for the call must be stated at the beginning of the
conversation. There is no requirement to do this at the outset of the call in Ireland so long as the identity of the supplier and the purpose of the commercial call is made explicitly clear at some stage during the call. 
Differences in the timing for the implementation of regulations  Although one would expect corresponding nationally derived legislation not to be implemented at the same time, there are also discrepancies between the implementation time for EU derived legislation. This is due to the fact that when adopted, an EU directive gives Member States a timetable for the implementation of the intended outcome. Therefore different Member States will implement the changes at different times with the potential to create confusion.

A failure to recognise differing yet adequate
standards imposed in each jurisdiction


Where a construction related contract is performed partly in Northern Ireland and partly in Ireland (for example haulage activities) the Relevant Contracts Tax scheme needs to be applied to the part of the contract that is performed in Ireland. This is the case notwithstanding that the Construction Industry Scheme may not be applicable to the Northern Ireland element of the contract.


6.  The, mostly, subtle differences in legislation which were identified during the mapping exercise are detailed in Appendix 3, which accompanies this report and on InterTradeIreland’s website. Table 4 highlights just a few of these differences to provide a flavour of the potential impacts on businesses.

7.  It is not just the differences or duplication in legislation that pose a problem for businesses trading on a cross-border basis but the totality of the burden in complying with the regulations in both jurisdictions. In a real sense “one plus one” can equal more than two when it comes to the totality of the burden. This scoping and mapping phase formed the basis of the research with stakeholders, businesses and the regulatory bodies. 

Table 4: Subtle differences in legislation emerging from the mapping exercise

Northern Ireland  Ireland Selected differences in regulation
Data Protection Act 1998  Data Protection Act 1988, as
amended by the European
Communities (Data Protection)
Regulations 2001 and the Data Protection (Amendment)
Act 2003  
In Northern Ireland, a data controller must take reasonable steps whereas in Ireland, he or she must take all reasonable steps. Further, in Ireland, data controllers must ensure that the people they employ are aware and comply with the relevant security measures.
Consumer Protection (Distance Selling) Regulations 2000 EC (Protection of Consumers in respect of contracts made by means of distance communication) Regulations
In the Northern Ireland regulations, the identity of the supplier and the purpose of the commercial call must be achieved at the outset of the call. This is not the case in Ireland.
The Working Time Regulations (NI) 1998 The Organisation of Working Time Act 1997 The amount of weekly rest is broadly similar in both jurisdictions, although there is a further obligation in Ireland insofar as weekly rest, should be on a Sunday, unless otherwise agreed between
employer and employee. 
The Transfer of Undertakings (Protection of Employment) Regulations 2006  The European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 In Ireland there is no regulation confirming the specifics of the information to be provided regarding transferring employees. 
Construction Industry
Relevant Contracts Tax  Under the CIS, monthly returns are required and there are
penalties for late returns. The RCT requires an annual return.
Immigration Act 1971 Immigration Act 1999 as
amended by the Immigration
Act 2003
Differences arise on the mobility of non-EU citizens across the border.

From the fieldwork exercise

8.  Overall, businesses reported that they wanted: more standardisation and simplification; easy
access to information; greater recognition of similar certifications and accreditations; more
user-friendly regulations; and greater alignment of regulation between the two jurisdictions.
Figure 1 (see page 10 in full report) summarises the business’ perspectives which emerged from our research. 

9.  Several employers called for more standardisation and simplification of legislation in the future, for example, stating that simplification of legislation is required to promote cross-border
mobility of workers. Some suggested that there should be greater collaboration between the legislative authorities, North and South, and that enforcement should be focused on a risk-based approach. There was a general view that greater harmonisation between the relevant Government agencies, North and South, would be beneficial, for example in the area of vehicle licensing. 

10.  Several respondents suggested that legislation should be simplified and the burden of paperwork should be removed as companies (particularly SMEs) do not have the capacity to deal with the intricacies surrounding compliance on many regulations, within two separate legal jurisdictions. Greater use of electronic systems and a reduction in duplication of paperwork were suggested as possible solutions. Emerging or small companies wanted a reduction in cost to enable them to “get up and running”. In their view, greater leniency and flexibility in the early stages of their business would facilitate this. 

11.  Many respondents, when asked if they would know where to go to get regulation-based information, were unaware of one main source. Instead, they said that they would seek private consultant or solicitor input. Several participants suggested that an advisory service for employees and businesses would be beneficial. Others considered that implementation of the regulations could be improved through mutual recognition in public sector contracts of specific accreditations. Some employers suggested greater transparency in the development of regulations and wanted to understand better the rationale for some legislation. Others suggested that Codes of Practice could, in some cases, be produced in a more user-friendly fashion.


12.  The research shows that there are many subtle differences in the selected regulations and that mapping these differences is a complex and, at times, an onerous task.

13.  However, it should be recognised that, in most instances, there is a clear rationale for a specific piece of legislation and that there is therefore an implicit cost of non-compliance, not only for an individual business that infringes a regulation and subsequently, for example, must pay a fine, but also in a wider sense for society. This includes the additional costs to other businesses that are complying (creating, perhaps, an ‘unlevel playing field’) and to, for example, employees and the public who are offered protection under the specific piece of legislation.

14.  Because of the lack of awareness of the differences in regulations, it has not been possible to estimate the full costs of cross-border regulatory burdens for the selected regulations. The barrier to cross-border trade lies rather in the perception of the burden that the different regulations might create. 

15.  In light of this, and based on our analysis of the findings of this research, we have made a number of observations for further consideration. These are discussed in further detail below
under six main headings.

Easier access to information for businesses

16.  As noted above, the research has found that, amongst employers, awareness of the regulatory requirements on businesses trading across the border was generally low. Many of the participants in this research suggested that the process of accessing information on compliance is time-consuming, particularly for SMEs, and that, in their view, many employers do not have the necessary knowledge to navigate the regulatory landscape. 

17.  Furthermore, subject to the state of the economy North and South, several of the representative bodies thought that cross-border trade is likely to continue to increase in the future from a relatively low base. If this is the case, easier access to timely, accurate and straightforward information will become even more important. Two potential options for further consideration are presented below:

  • A “first-stop shop”: several participants requested a “first-stop shop” which would provide information and advice on compliance, in both an actual and virtual format. Examples cited included a website listing all health and safety or environmental regulatory requirements. While there are some logistical issues in co-ordinating such a service between the two jurisdictions, there is some evidence of a demand for such a service from employers. Consideration could be given, in the first instance, to developing such a service for a specific sector with significant cross-border trade, such as construction, by way of a pilot.
  • Virtual networks: consideration could also be given to developing an interface or portal to join up existing sources of information on regulatory requirements and differences. Examples of existing databases include EURES, the European job mobility portal, Business online and SOLVIT. Such a network could also provide cross-border guidance on more operational issues such as PAYE and VAT.

SOLVIT is an on-line problem solving network in which EU Member States work together to resolve, without legal proceedings, problems caused by the misapplication of Internal Market law by public authorities. There is a SOLVIT centre in every European Union Member State (as well as in Norway, Iceland and Liechtenstein). SOLVIT Centres can help with handling complaints and issues from both citizens and businesses. They are part of the national administration and are committed to providing real solutions to problems within ten weeks, free of charge. SOLVIT has been in operation since July 2002. The European Commission co-ordinates the network, which is operated by the Member States. The European Commission provides the database facilities and, when needed, helps to speed up the resolution of problems. The Commission also passes formal complaints it receives on to SOLVIT if there is a good chance that the problem can be solved without legal action. [1]  At present, the majority of queries that SOLVIT centres receive are from individuals and SOLVIT representatives are therefore keen to work  with trade organisations and other bodies to raise awareness of the benefits of the system amongst the business community.  

18.  It should be noted, however, that there is an existing infrastructure across Ireland to provide such information and that care should be taken ‘not to reinvent the wheel’.

Raising awareness of compliance requirements

19. Linked to easier access to information is the need to raise awareness amongst businesses about the importance of compliance. Several participants in this research were not fully aware of the regulations impacting on their sector with some stating that if they were compliant in one jurisdiction they thought that they would be compliant in the other. Some of the representative organisations also suggested that a lack of understanding of the need for a specific regulation created some level of frustration amongst their members, which may potentially hinder compliance. There are several options for raising awareness:

  • Incorporating regulatory training into business development programmes: The existence of a number, the existence of a number of export growth and export startup programmes, North and South, provides an opportunity to support further training on cross-border compliance to new or expanding businesses.

  • Communication of the rationale for regulations: as noted above, there is some evidence that employers are not fully aware of the rationale for some of the regulations and that this creates a certain level of dissatisfaction and confusion amongst businesses. Clearer communication of the need for specific regulations, through for example, the Explanatory Notes accompanying legislation, relevant Government websites, the “first-stop shop” recommended above, or the various business stakeholder organisations could reassure businesses of the need for regulation and the importance of compliance. 

  • Co-ordinated consultation with business: linked to the point above, further co-ordinated consultation between legislators and the business community raises awareness amongst law-makers of the needs of businesses and the constraints which operate on them.

Consideration of the cross-border element in the development of regulations

20.  The mapping exercise demonstrates that small differences in regulations can potentially have an impact on businesses and that comparing the relevant legislation is an onerous task. Evidence from the employers that we spoke to suggests that this is a greater burden on SMEs, which are not in a position to engage legal teams to assist them. There are a number of ways in which compliance could be facilitated during the drafting and development stage of legislation:

  • Regulatory Impact Assessments: given that the Regulatory Impact Assessment (RIA) processes are currently under review in both the North and the South, there is an opportunity, which is now timely, to ensure that the cross-border dimension is incorporated into the RIAs of the relevant Government Departments in both jurisdictions. An analysis of the likely or potential impact of a specific regulation on cross-border trade will help ease the burden on businesses in the future. The RIAs could, for example, explore the opportunities for a ‘de minimus’ approach in relation to, for example, the provision of short-term work permits for non-EU workers to facilitate cross-border mobility;

  • Cross-border collaboration on the presentation of common legislation: the mapping exercise has also demonstrated that while many regulations derive from European legislation, the structure and presentation of the domestic interpretation of these regulations differs, thus making it more difficult to achieve a ready ‘read across’. It is recommended that, potentially through the mechanism of existing North/South structures, consideration is given to the presentation of such regulations so that, as far as possible, common features are ordered in the same fashion in both jurisdictions whilst retaining sufficient flexibility to tailor the interpretation of the legislation to the context of each jurisdiction;
  • Relationship with Europe: given the importance of European law in both jurisdictions noted above, and in light of the British Chambers of Commerce observation that European Impact Assessments are relatively high-level, consideration should be given to encouraging both the UK and Irish Governments to consider the potential impact of any new legislation at an early stage and to make prompt representations to the Commission as appropriate. Any such early assessment should consider the likely impact on the border; and
  • Role of the regulators: consideration should be given in both jurisdictions to maintaining and enhancing the role of regulators as “information-providers” as well as “enforcers” and to ensuring that any new regulatory bodies have such a dual role. While there was some evidence of co-operation between the regulators, further consideration should be given to developing stronger and more formal linkages between the regulatory authorities North and South.

Public sector procurement

21.  Several of the employers that participated in this research noted their experience of additional burdens created by some public sector contractual processes in both the North and South. There are two main dimensions to this:
  • Assistance in navigating public procurement systems: several participants in this research reported difficulties in accessing the public procurement systems in each jurisdiction, particularly in terms of providing the right information at the right time. Consideration could be given to providing further assistance and support to businesses in this regard and to streamlining the registration processes for each system; and
  • Mutual recognition of certain industry accreditations: other respondents noted the additional burden of training their workforce in two different systems to which they need to comply. For example, different health and safety accreditations, to similar levels of quality or compliance. In order to mitigate against this burden, consideration should be given to ensuring that, where the relevant authorities are satisfied that a common level of compliance is attained in such accreditations, both accreditations are specified or recognised in public sector contracts. 

Promoting partnership arrangements

22.  While the focus of this research is on minimising the cross-border regulatory burdens on businesses and recognising that both jurisdictions should continue to strive to reduce any burden, there is evidence to suggest that other approaches also assist in minimising the burden on businesses. Several of the businesses that we interviewed, for example, reported that the border was not an issue for them as they had established partners in the other jurisdiction who were responsible for compliance in that area.

  • Assisting businesses to link together: consideration could therefore be given to assisting businesses to source partners such as distributors, agents or businesses interested in joint ventures, in the other jurisdiction, through for example joint networking events or a dedicated website. This could also include more assistance in the development of consortia, North and South, capable of competing with larger multinational companies in procurement exercises.

Monitoring the impact of the border on business

23.  Several of the representative bodies noted that cross-border trade has started to increase in recent years from a relatively low base. While the current downturn in the economy may impact on the rate at which cross-border trade continues to grow, monitoring the impact of the border would provide not only an indication of the impact of any reforms emerging from this review and other on-going work to reduce regulatory burdens, but also important contextual information on specific issues facing businesses across both jurisdictions. Valuable quantitative information could be obtained by including relevant questions in existing InterTradeIreland surveys or by commissioning custom-designed survey data on cross-border trading issues.

24.  The research has also highlighted the high number of environmental regulations relating to business and noted some of the general concerns expressed by participants. Given the scale of legislation in this area, a stand-alone study into the impact of environmental regulations on business maybe required. 


[1] More information is available at: https://ec.europa.eu/solvit/index_en.htm


Regulatory-Barriers-to-Cross-Border-Trade-and-Business-June-2009.pdf-121502Click here to download the full report: Regulatory Barriers to Cross-Border Trade and Business