EU Exit Business Readiness Forum meeting on 14th March

Please find below summary notes from the EU Exit Business Readiness Forum meeting on 14th March:

Panellists

• Donna Leong, BEIS
• Tom Joseph, Department for Information Technology (DIT)
• James Dowler – Department for Exiting the EU (DExEU)
• Davvy Langley, BEIS
• Sarah Smith, Deputy CEO at Office Product Safety & Standards (OPS&S)
• Alun Williams, DEFRA

The Department for Business, Energy and Industrial Strategy (BEIS) held their seventh EU Exit Business Readiness Forum on Thursday 14^th March at BEIS central London offices in Victoria, covering in this session Regulations and Standards – Reach, Goods, Product safety in the event of a no-deal Brexit.

The forum was hosted by Donna Leong of BEIS with panellists James Dowler (DEXEU), Tom Joseph (DIT), James Dowler (DExEU), Davvy Langley (BEIS), Sarah Smith (OPS&S) and Alun Williams (DEFRA).

The Forum, aimed primarily at representative organisations such as trade associations and professional bodies, has 3 main objectives - to share the information UK businesses need to prepare for EU Exit; to provide materials to association bodies to cascade to members; and to respond to and gather feedback on existing and new materials circulated in readiness for the UK’s withdrawal.

Donna Leong welcomed attendees and introduced James Dowler a Deputy Director at DExEU who proceeded to give an update on preceding days’ events in the House of Commons.

Key Points raised related to the Government’s position on tabled amendments, namely;

• Meaningful Vote on the Withdrawal Agreement – Defeated
• Vote on keeping a No-deal BREXIT – Defeated
• The default legal position in both UK & EU legislation is that no ratified withdrawal agreement equates to a No-deal BREXIT
• The Government’s focus remains to secure a deal and an orderly withdrawal from the EU
• Further debate today (14.3.19) on Article 50 extension, but this is not unilateral and requires consent from EU27
• If EU agree Article 50 extension, likely to be a lengthy extension
• Possibility for a technical extension if Parliament can agree a withdrawal agreement that has majority support

Tom Josephs – DIT Update on the Tariff Regime that would be implemented on a temporary basis in the event of a No-deal BREXIT

Key points from Tom’s presentation include;

• The tariff regime would be temporary.
• Likely to be over a period of 12 months.
• In parallel a full public consultation on the long term tariff regime would take place.
• Only applicable in a no-deal scenario.
• If a withdrawal agreement is ratified and the UK moves into a Implementation period then there would be no change to existing tariff regimes.

Under World Trade Organisation Rules it is essential that tariffs ae applied equally to all countries, in other words it is not possible to apply differing tariff regimes across the EU27. It is possible that the UK could offer zero tariffs to the EU but then must also apply this zero rate to all countries in the World.

The proposed temporary regime offers a balanced approach. 87% of imports in value would be tariff free compared to the current 80% of imports which are tariff free. Some tariffs would have to be in place. Certain sectors such as agriculture would see tariffs retained as well as certain sectors where it is perceived that unfair trading practices exist to mitigate unfair pricing against domestic production.

Other tariffs will be retained to protect developing countries seeking to develop through trade. The UK may consider further tariff regimes on an evidence basis if unforeseen consequences occur.

Current situation Proposed temporary regime

EU 100% tariff free 82% tariff free

Rest of World 56% tariff free 92% tariff free

Export tariffs will be applied by the EU to UK goods, from its common set of tariffs.

Questions raised and responses

1. What is the situation in Ireland?
A: No checks on goods from south to north, with no tariff regime in place on the Irish border or between the island of Ireland and the UK.

2.Does the proposal for Ireland contradict WTO rules?
A: Confident proposal is compatible with WTO rules.

3.What about goods in transit?
A: No clear answer at the moment, but liaising with HMRC.

4.Why no consultation process?
A: Sensitivity of negotiations with the EU meant it was not prudent to conduct a public consultation. However the permanent tariff regime will see a full public consultation.

Goods Regulations “Goods traded under the new approach” was covered by Davvy Langley of BEIS and Sarah Smith of OPS &S

Davvy Langley offered a brief background to goods regulation in 3 broad categories, ‘Old Approach’ of standalone models of regulation such as those for medicines or aerospace, the ‘New Approach’ which adopts a common toolkit of regulatory measures such as those applied to toys and machinery and ‘Non-harmonised goods’ which are subject to national rather than EC wide legislation.

The remainder of the presentation followed a No-deal BREXIT scenario for placing products on the market.

Selling into the UK

New Approach goods meeting EU Regulations can still be sold into the UK market with a CE marking. The UK will directly recognise conformity assessments carried out by EU notified bodies.

There will also be a new UK database to replace the EUs NANDO database and new products placed on the internal UK market will be assessed against UK rules by a ‘UK approved body’ and will need to display the UKCA marking.

Selling into the EU: CE marking and notified bodies

Conformity assessment by UK notified bodies will no longer be recognised in the EU. Goods that are assessed by a UK body cannot be sold in the EU without reassessment by an EU body.

Alternatively, manufacturers can transfer their files to an EU recognised body prior to the UK exit from the EU. CE marking must be in place for goods sold into the EU, thus requiring the 4 digit reference number on the label to be changed in the event that files are transferred to a new notification body within the EU. Self-declared goods will be unaffected.

Declarations of conformity

For ‘new approach’ goods an EU declaration of conformity must be drawn up and made available.

For UKCA marked goods, a UK declaration of conformity will be needed.

For CE marked goods an EU declaration will still be needed, even for the UK market.

Sarah Smith of OPS&S

The Deputy CEO for OPS & S offered her thoughts on what the approach to regulation would look like in a No-deal BREXIT scenario.

A number of Statutory Instruments have been prepared, approved and adopted into UK law for when the UK leaves the EU. The purpose is to ensure on going protection of human health and the environment. This will ensure that;

• The Legal Metrology is maintained
• Product Safety is maintained

There are however some key changes that UK businesses must be aware of.

If you are a distributor of EU goods, once the UK leaves the EU you will be deemed to be an importer of EU goods which will mean that you have additional obligations. OPS & S are strongly advising businesses to take legal advice to ensure that they are aware of their obligations.

OPS & S has also invested in two new databases to offer the equivalent capability as that provided by ICSMS which allows enforcement bodies to share information seamlessly across borders when unsafe products are identified.

Alun Williams, DEFRA UK REACH in a No-deal BREXIT scenario

Alun Williams provided an update and guidance on what the regulatory regime for chemicals would be in a No-deal BREXT scenario. The Government has clearly stated its preference is for an orderly withdrawal and to remain participating in ECHA. There are two significant pieces of European Legislation, The Circular Economy Directive on Waste due for implementation by July 2020 and the Nanomaterials Directive will both have implications for REACH and the UK REACH legislation in a no-deal scenario.

Alun restated the position of previous speakers. In a no-deal scenario the default is the UK leaves the EU. If the UK agrees a deal and moves to an implementation period this could still lead to no long term trading and regulatory agreement with the EU. In both these scenarios the UK will need its own legislation for the control of chemicals.

UK Proposal

Will ensure that UK legislation replaces EU legislation

Brings REACH into UK Law, while making technical changes that would need to be made.

Establish a regulatory framework and build domestic capacity to deliver the functions currently performed by the ECHA

Work with devolved governments in areas of devolved competence.

The aim is to minimise disruption and prioritise stability such that the UK system will mirror existing EU systems as far as possible and minimise disruption to integrated supply chains for chemicals.

The UK will continue to monitor and evaluate chemicals in the UK to reduce the risk posed to human health and the environment. Existing standards for protection of human health and the environment will therefore be maintained.

Grandfathering existing Registrations into UK REACH

There is a provision which allows a 120 day window to grandfather existing chemical registrations into UK REACH. However there will be a further requirement to submit a full registration of a given substance into UK REACH within 2 years of leaving the EU.

There are new requirements with regards the importing of REACH substances from the EEA;

• -Notification process must be completed within 180 days of the UK leaving the EU
• -Undertake a full UK registration
• -Opportunity to encourage EU / EEA suppliers to appoint a UK ‘Only Representative’ (OR) to ensure REACH compliance

UK REACH IT System

A new system is being built in order to support the registration of chemicals from March 2019

New system will replicate EU REACH IT system

The system is being developed in a phased approach, prioritising all essential functions e.g. substance registration

UKREACH will require exactly the same IUCLID dossier as ECHA, so industry will in effect supply the same information to both chemical agencies (EU & UK)

Authorisations and Restrictions: Authorisation holders

Existing EU authorisations held by UK manufacturers, importers and ORs will be grandfathered into UKREACH.

UK companies that have submitted authorisation applications to ECHA and ECHA have not yet responded will need to submit a dossier to UKREACH

Applicants awaiting EU decisions following ECHA’s (RAC/SEAC) opinion must notify the UK Agency of the application and provide copies of information that led ECHA’s formation of its opinion.

UK Government guidance on REACH and UKREACH can be found at https://www.gov.uk/government/publications/regulating-chemicals-reach-if-theres-no-brexit-deal/regulating-chemicals-reach-if-theres-no-brexit-deal

Programme to 21^st March

Dates for forum meetings in March confirmed as 7^th, 14^th, 21^st and 28^th.

7^th March – Importing and Exporting –Tariffs and

People & Workforce – MRPQ & Business mobility

14^th March – Regulations and Standards – Reach, Goods, Product safety

21^st March - Digital and Data – Providing services on-line and Data roaming.

Please note that topics are yet to be announced for the forum on 28^th March. These will be based on key announcements and business needs.

The government is interested in hearing the feedback of the industry in relation to the information available. Members are invited to forward any queries or feedback they may have to Suzie Radcliffe-Hart sradcliffe-hart@fira.co.uk or info@fira.co.uk

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