Brexit is a hot topic at the moment: every company or manufacturer of goods, whether EU or UK-based, wants to know how it’s going to impact them. The UK officially left the EU on 31st January 2020, when a transition period withdrawal agreement was set in place that specifies that EU law will continue to apply in the UK until 31st December 2020. After this period, the EU treaties, EU free movement rights and the general guidelines under EU law will no longer apply to the UK.
This article is a brief overview of how Brexit might affect the laws and regulations governing product compliance and liability when sold in the UK market and vice versa in the EU. The current legislation in the EU sets a high standard for product safety, environmental and other regulatory requirements which apply to a wide range of products such as electrical equipment, medical devices, machinery, toys etc. Changes on any of this legislation ultimately change the free movement of goods between the UK and EU, where restrictions could be in place.
What is Brexit?
Brexit is a fusion of the words “British” and “Exit” and refers to the UK’s decision from a referendum held on 23rd June 2016, to leave the European Union by 31st January 2020. The UK had been a fundamental part of the European Union since 1973 and was initially a member to work towards reducing trade restriction between member states. Since then, it has been an integral part of the EU, enforcing its economic status in the world, whilst supporting those countries around it that are less stable.
In 2016, the British government decided to hold a referendum and let its citizens decide if the UK should still be a member of the EU. Over 33 million people decided the future of the UK, and the ultimate decision was to leave the EU. The British Prime Minister stated at the time:
The will of the British people is an instruction that must be delivered. It was not a decision that was taken lightly, not least because so many things were said by so many different organisations about the significance of this decision.David Cameron, British Prime Minister 2010 – 2016
The vote results defied predictions and shook-up global stock markets, causing the British pound to fall to its lowest level for 30 years. The process of leaving the EU is started by invoking Article 50 of the Lisbon treaty, which was triggered on 29th March 2017. The UK had, from this point, 2 years to agree and negotiate a deal on a new relationship with the EU. This was extended several times due to failed negotiations and changes in the UK parliament.
On 31st December 2020, the UK left with a deal agreed between the British Prime Minister Boris Johnson and the President of the European Commission Ursula von der Leyen.
Under the withdrawal Act for the UK, government ministers will have to legislate to amend the UK laws implementing EU directives to ensure those laws are coherent and effective after Brexit. Thus, the UK will have to form its own conformity assessed marking system.
How does Brexit impact health & safety compliance of goods?
Before Brexit, the UK as part of the EU had mandatory conformity marking for regulating goods sold within the European Economic Area (EAA) called Conformité Européenne, also known as the CE mark and very similar to FCC in the US. This directive applies not only to goods produced within the EAA, but also to those sold in the EAA. This is what makes the CE mark very recognisable throughout the world.
To the end-user of a product, the CE marking does not really provide any useful information and should not be used as a quality assurance declaration; it also does not show any evidence of third-party testing. The presence of a CE mark indicates that the appropriate technical documentation that supports the use of the CE mark is available upon request by the manufacturer or the person responsible for placing the product in the EAA.
The biggest changes to the UK product compliance regime are as follows:
- The current CE marking will no longer apply in the UK as of 1st January 2022. The UKCA (UK Conformity Assessed) marking system will be the new UK product marking used for those products being sold in the UK market which previously needed a CE mark. At the moment, the UKCA will follow the same guidelines as the CE marking but with safety and compliance standards now being valid in the UK only. Certain products that may only require a self-certification with UKCA and CE laws may, for a short period of time after the transition period, be sold in the UK where they comply with the CE marking.
- For those products that are to be sold in the UK which require mandatory third-party assessments to be conducted by notified bodies, such as medical devices, if a UK body has carried out their assessment then the product must be UKCA marked immediately after IP completion. If an EU body has carried out the assessment, then they must have CE markings and will remain accepted for use in the UK as long as the CE mark is accepted, which at the moment is until 31st December 2021.
- The new UKCA mark will not be recognised in the EU at any point. However, it can be shown alongside the CE marking and other markings. Therefore, any products that require CE marking and are exported between the UK to the EU will need to meet the EU product standards and be required to show the CE mark and UKCA mark. There are absolutely no restrictions on products displaying numerous markings as long as they conform to each.
- UK-based notified bodies which are currently assigned to assess the conformity of products requiring CE marking before being placed in the EU market will, after the transition, no longer be established in the EU. The conformity assessments carried out by them, including those assessments carried out before the end of the transition, will not be valid in the EU. Businesses whose products currently rely on third-party conformity assessments carried out in the UK will need to have new assessments carried out by EU-based notified bodies to ensure continuing compliance.
- It should also be noted that the UK leaving the EU will also affect the supply chain. This is important because, under the EU regulations and the new UK regulations, each operator will have different regulatory obligations, whether they are the manufacturer, importer, or distributor. If the manufacturer from the UK is exporting to the EU, then the receiving country would be considered as the importer. The obligations of an importer are far more serious than that of a distributor, and the obligation is on them to ensure that the products are compliant under the EU regulations. It also applies for EU exporters to the UK: the various importers and distributer must be fully aware of their obligations after Brexit.
The divergence now is nothing more than administrative, with both the UK and EU offering different systems but relying on the same health & safety standards throughout. For those businesses hoping to sell products in both the UK and EU markets, both systems must be closely aligned for easy integration; otherwise, it could be a confusing and a financial burden.
Businesses should be fully aware of the regulations and new standards that will come into place after 2021, when the transitional period ends. Brexit negotiations ended shortly before 31st December 2020, and there might be tweaks to the regulations still, but it is recommended to seek legal help where applicable. Hopefully, the transitional period will be smooth, and businesses will be able to trade their goods both in the UK and EU without any issues. The biggest challenge will be complete transparency in the guidelines, assuring businesses that manufacturer, import, or distribute products, are completely clear in their role and what is asked of them within the supply chain.