The Taoiseach has told the Dáil that there will be a grace period here for drivers crossing the border without a green card in the event of a no-deal Brexit.
Leo Varadkar said that while a green card will be required as proof of insurance, it is not an offence here not to have one, and there will be a grace period for people who are based in Northern Ireland and are travelling south.
He was responding to Sinn Féin's finance spokesman and Donegal TD Pearse Doherty, who said drivers crossing the bridge at Lifford faced having their vehicles impounded in the event of no deal.
However, Mr Varadkar told Mr Doherty that they couldn't make "a commitment on behalf of the government in Northern Ireland, because there isn't one, and we can't make commitments on behalf of the UK government".
"What I can say for people entering this jurisdiction, that so long as their insurance policy covers them for this state, even if they do not have a green card on March 30th, they will not be prosecuted for that and there will be grace period," Mr Varadkar said.
Mr Doherty said he was told by his insurance company that they would issue green cards after a decision is taken after 29 March.
"Our cars can be impounded if we travel to the north without a green card at that time. This is a hugely worrying issue for people," Mr Doherty said, adding that many drivers were unaware of the implications of not having a green card.
"There is a huge anger in communities that they now have to hold an international insurance certificate to travel across the border, to travel for example across the Lifford Bridge into Strabane, a journey that many people do on a daily basis," Mr Doherty said.
Mr Varadkar said a solution on the issue would involve a bilateral agreement between the UK and the EU, such as the one in place for aviation for a period of nine months, and for haulage licences.
"This has been raised, this is being worked and our objective is to conclude an agreement bilaterally between the EU And the UK at least for a period of months, but that has yet to be finalised," Mr Varadkar said.
Meanwhile, Minister for Transport Shane Ross has apologised after referring to Sinn Féin's transport spokeswoman Imelda Munster as a "donkey".
The minister was responding to criticism from Deputy Munster over the confusion faced by cross-border drivers in relation to the need to carry green cards as proof of insurance.
Mr Ross said the Government had raised the matter with the European Commission, asking it to set a date from which green cards would no longer be required.
"The Commission has not given agreement to date. The Government continues to pursue the matter with it," Mr Ross said.
"We made it quite clear we didn't like it," Mr Ross added, saying he and his officials would press the commission on the issue.
Meanwhile, Fianna Fáil transport spokesman Robert Troy raised the recent advice to UK licence holders here to change their licence for an Irish one before 29 March.
He asked Mr Ross what the insurance implications would be for those who do exchange their licences.
Mr Ross said the advice remained that those resident here with UK licences should exchange them for Irish licences.
He said: "We will work to put in place alternative arrangements post-Brexit when the UK is a third country. Visitors to Ireland with a UK licence can drive under their UK licence for up to 12 months.
"In the meantime, we fully expect that reciprocal arrangements will be made that will be perfectly adequate."
He told Mr Troy that he understood that no-claims bonuses were affected by driving experience rather than the licence, although he acknowledged he was not an "expert in the field".