18 February 2019
With less than six weeks left to the 29 March deadline - and little political consensus, the possibility of a ‘no-deal’ Brexit and the UK crashing out of the customs union and becoming a ‘third country’ increases. If your business manufactures, exports or imports, distributes, or otherwise deals in consumer or industrial products in the UK or the EU, you may need to take steps now to ensure that your products remain compliant under applicable UK and EU law in the event of a no-deal Brexit.
The requirements for placing products on the UK and EU markets (including conformity assessments, marking and labelling) will change overnight unless a deal transitional arrangements or otherwise an extension is agreed before the 29 March deadline. In case of a ‘no-deal’ scenario, the following issues in particular may need to be addressed in respect of product trading in the EU or the UK post-Brexit:
CE marking and conformity assessment - EU market:
The consequences of the UK’s withdrawal for trading within the EU-27 will depend upon the particular product type and specific conformity assessment procedure, and importantly, whether that product was placed on the EU-27 market before the withdrawal date. Products not placed on the EU-27 market before this date may need to be re-certified, re-labelled or modified in order to trade within the EU post withdrawal.
In particular, for products where the applicable conformity assessment procedures require intervention by a notified body, UK notified bodies will lose their status as EU recognised bodies. Unless such products have been placed on the EU-27 market before the withdrawal date, the European Commission advises operators to consider obtaining a new certificate from (or arrange for a transfer of the certificate to) an EU recognised notified body. How this works in practice will depend on the specific conformity assessment procedure for the applicable product,although the European Commission advises that any transfer of certificates would need to take place before the withdrawal date.
Where manufacturers place a CE mark on products on the basis of a self-declaration that the product is compliant, this declaration will remain valid when exporting to the EU.
CE marking and conformity assessment - UK market:
Goods already placed on the UK market by 29 March 2019 can continue to be lawfully circulated on the UK market. For goods placed on the market after the withdrawal date, the UK Government has unveiled a new logo to replace the CE mark in the UK, dubbed the “UKCA” (“UK Conformity Assessed”), which would require companies to change their product packaging, advertising and labelling at additional cost for manufacturers. Goods made in the UK for export to the EU may need to be stamped with both the CE and UKCA marks. There is still a lot of uncertainty about how the UKCA will work in practice; whilst the government may in time grant concessions to industry, significant disruption for businesses is inevitable.
Economic operators established in the EU:
UK-based importers and manufacturers will no longer be considered as “economic operators established in the Union” under the EU’s product legislation following Brexit. For products entering the EU post Brexit, EU distributors who previously relied on UK economic operators will become “importers” for the purposes of EU law when making the products available on the EU market for the first time. This will require them to meet more stringent obligations in relation to product compliance. For example, EU legislation generally requires the contact details of the importer or manufacturer to be provided on the product itself or its label, which may need to be updated where this previously referred to a UK-based party.
Authorised representatives and responsible persons:
Certain EU product legislation requires the appointment of an authorised representative (e.g. medical devices, marine equipment) or a responsible person (e.g. cosmetic products) within the EU. Post-withdrawal, UK-based authorised representatives or responsible persons will not be recognised as such in the EU. As a result, manufacturers must take steps to ensure that their designated representatives or responsible persons are established in one of the remaining EU Member States and that appropriate notification is carried out in relation to such legal entity change.
Product specific regimes and requirements:
Several product sectors - Automotive, Aerospace, Pharmaceutical Products, Medical Devices, Batteries, Chemicals, etc and non-harmonised goods subject to national regulations - are subject to specific regimes and requirements. Each regime will have to be assessed for specific changes in order to ensure uninterrupted trade. For example, we have recently advised a number of chemicals manufacturers and traders on transferring UK REACH registrations to the EU, which can be time consuming if a new entity needs to be established. We recommend that businesses seek advice on the available options as soon as possible, as it may take time to implement any necessary changes.
K&L Gates can advise on the full spectrum of EU product compliance matters to help your business prepare contingency plans for Brexit. We also have lawyers who can help manage Brexit concerns in relation to: Trade & Tariffs, State Aid & Merger Clearance, Intellectual Property, Commercial Contracts, the Workforce, and Travel.
