The Windsor Framework is "impossible to navigate", according to a report from a British parliament committee.
The report from the House of Lords Northern Ireland Scrutiny Committee also found that the post-Brexit arrangement is "complex and opaque" and "difficult for business and civil society stakeholders to navigate".
It calls on the British government to simplify the framework.
The committee report also found that there is an absence of a centralised register of applicable EU laws in Northern Ireland.
This means businesses and stakeholders must spend time tracking changes to laws applicable to them.
The committee believes that a new unit in the UK Cabinet Office should be established, responsible for regulatory divergence and a "one stop shop" for those trying to navigate changes.
Committee chair Alex Carlile noted that there were differing views among members of the committee, however all agreed that "meaningful engagement, transparency and public understanding must be urgently improved for the benefit of all communities in Northern Ireland".
He added: "We strongly support proposals to enhance Northern Ireland's voice early in the EU legislative process, including through better resourcing of the UK mission in Brussels"
The committee heard criticism of the "Stormont Break", which allows for a members of Stormont to raise concerns over new rules.
It was used for the first time in 2023 over concerns in relation to the labelling of chemicals.
Ultimately, however, the British government chose to press ahead with the new rules.
