The European Union has made progress in its talks with the UK on the Northern Ireland Protocol but difficulties remain, European Commission Vice-President Maros Šefčovič has said.
"We reestablished trust in the relationship with the UK... the greater the safeguards we get, the more flexibility the EU can offer", Mr Šefčovič said during a press conference.
It comes after a senior EU official told RTÉ News that the EU will accept the principle that GB goods shipped to Northern Ireland and staying there should be treated differently to goods moving south into the single market, and as such will agree to a green and red lane model at ports, as proposed by the UK.
Significantly, the green and red lanes at Northern Ireland ports, will govern both animal health and food safety issues as well as customs formalities.
"It will be across the board," said the EU official.
Such an acceptance will increase the chances that EU and UK negotiators will reach agreement on the Northern Ireland Protocol.
The handling of so-called sanitary and phytosanitary (SPS) issues has always been one of the most difficult throughout the negotiations.
"We have acknowledged the unintended consequences of the protocol and we know the most important thing is that we have a solution that works for Northern Ireland," the official said.
However, the official stressed that the talks remain difficult and that key gaps remain to be bridged.
A UK government spokesperson declined to comment on the reports that a breakthrough had been reached.
"There is still significant work to be done and there will be further talks this week across all areas," they said.
On the role of the European Court of Justice (ECJ) in adjudicating single market issues in Northern Ireland, the senior EU official said it remained "a difficult issue for us. At the end of the day, the ultimate arbiter for European single market law is the ECJ."
There has been mounting speculation that both sides are close to agreement.
A second senior EU source suggested there would be no announcement this week ahead of a special summit of EU leaders in Brussels.
The EU's acceptance of the principle of differentiating Northern Ireland-only goods from those destined for the single market is a key breakthrough.
EU officials say it is predicated on the safeguards enshrined in the agreement by the UK to provide the EU with a forensic, real-time picture of the provenance and nature of the goods moving GB-NI.
The announcement that the UK is legislating to complete the construction of Border Control Posts (BCPs), or points of entry, in Northern Irish ports so that SPS controls can be carried out, is also a key confidence building measure, according to EU sources.
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What is the NI Protocol?
The protocol is part of the Withdrawal Agreement - the international treaty under which the UK left the EU.
It was a compromise to prevent a hard border with checks on goods crossing from Northern Ireland into the Republic of Ireland and the EU's Single Market.
Under the deal, Northern Ireland left the EU along with the rest of the UK.
But the British government accepted that it would stay aligned with the EU’s Single Market rules for goods.
That allowed the checks to be done at Northern Ireland’s ports instead of along the 300-mile land border. It has been dubbed 'The Border in the Irish Sea'.
The EU’s rules on customs and regulation of agri-food products also continue to apply to goods arriving in NI.
"We share the philosophy that we should treat goods differently if they are staying in Northern Ireland compared to those which are going to the single market. There are more safeguards in place, that means more flexibility," says the official.
According to how the IT-based system will work, information in real time will show if there are any suspicious movements between GB and Northern Ireland, and if red flags are raised lorries can be checked by UK Border Force.
Under the system EU officials will be able to monitor goods movements across the Irish Sea remotely.
"The IT system is up and running," says the senior EU official. "We have made recommendations and the UK has been constructive in meeting them. IT safeguards are in place.
"There are different options to make an express lane more green and the red lane will follow with appropriate safeguards."
The official would not be drawn on whether goods entitled to use the green lane would be exempt from all customs declarations, including the need for traders to pre-fill so-called commodity codes electronically in advance, and SPS formalities.
Given that EU officials will be entitled to download information on the content and form of goods going through the virtual green lane, it is assumed that a degree of data will be required.
Reaching agreement is "doable" says the official. The key element was that EU customs and regulatory officials would be in a position to apply their risk analysis tools remotely and, essentially, in real time.
However, many of these aspects are still thought to be under discussion. "The contours of the final agreement are difficult to say. The terrain we know very well. We want joint solutions, we're talking about everything," the source says.
The official told RTÉ News that the negotiations were being carried out in a constructive and positive atmosphere and that both sides were determined to agree solutions jointly.
"There are technicalities which have been improved, some need more time. What kind of info goes in [to the IT system], how is it processed, and so on. We’re pushing for a joint solution," the official says.
Two senior EU sources have said they are highly sensitive to the challenge facing British Prime Minister Rishi Sunak in securing the approval of both the hardline eurosceptic European Research Group (ERG) and the DUP.
The negotiations have been carried out in unprecedented secrecy to avoid leaks which could disrupt Sunak’s presentation of the substance of the deal that appears close.
A second EU source said the good rapport between Mr Sunak and European Commission President Ursula von der Leyen was key to progress in the talks, as was the relationship between Mr Šefčovič and British Foreign Secretary James Cleverly, and Northern Ireland Secretary Chris Heaton-Harris.
