In a position paper published on Monday (21 August 2017), the UK Government has outlined its priorities for the upcoming negotiations in respect of the availability of goods and services following the UK's withdrawal from the EU in March 2019. This follows a position paper published by the European Commission in July relating to goods placed on the market before the withdrawal date.
Although the proposals do not consider a long term framework for goods and services, the paper hints at the UK's intentions for a future solution by acknowledging the mutual benefits of the longstanding trading relationship between the UK and the EU and emphasising the Government's objective of maintaining the "freest possible future economic relationship" based on the existing common regulatory system.
The UK Government's proposals are summarised as four principles:
A. Goods placed on the Single Market before exit should continue to circulate freely in the UK and the EU, without additional requirements or restrictions. If adopted, the paper sets out some of the practical results of this including :
- no alterations to labelling. If adopted, this will provide some comfort in supply chain planning in relation to packaging materials and reassurance that products already placed on the market will not need to be withdrawn;
- recognition of existing approvals, registrations and authorisations obtained before Brexit; and
- continuity for persons responsible for compliance (for example, Authorised Representatives for medical devices or Responsible Persons for cosmetics) without a requirement to relocate. It would only relate to the person responsible for goods placed on the market before Brexit and so it may then mean a different person would need to take on the role for goods placed on the market post March 2019.
The Commission also shares the view that goods placed on the market before withdrawal of the UK from the EU should continue to be made available after withdrawal. The UK's position seeks to clarify what that might mean in practice.
The paper also proposes that the Withdrawal Agreement should "provide a clear and workable interpretation" of the term "placed on the market" based on existing definitions to ensure certainty for producers. This may mean that the term is defined differently for different sectors and the paper pulls out agri-food products as an example.
B. Where businesses have undertaken compliance activities prior to exit, they should not be required to duplicate these activities. This Principle acknowledges the considerable work that many businesses undertake in preparing to place goods on the market and proposes that measures to ensure compliance with regulatory requirements should be valid in both the UK and the EU regardless of where they originally took place.
The paper also proposes that on-going compliance activities and conformity assessments should be able to continue as intended before Brexit, by the same authorities and in the same location as at the date of withdrawal. The results of any assessment, as well as any approvals, registrations, certifications and authorisations, would also continue to be recognised in both the UK and EU markets. While it is in the UK's gift to make this work for products entering the UK post-Brexit, it is less certain whether the EU will agree to a mutual principle for goods entering the EU market that have been assessed in the UK. Notably, the Commissions paper instead referred to certain risk assessments, approvals and authorisation procedures being transferred "where appropriate" to another competent authority so this could be an area of much debate.
C. The Withdrawal Agreement should facilitate the continued oversight of goods. The paper emphasises that failure to support the traceability of goods through the UK and EU supply chains and the oversight of goods by market surveillance authorities could causes disruption and uncertainty, particularly in areas such as:
- traceability of non-compliant food products; and
- requirements of marketing authorisation holders to report adverse reactions to medicines
The paper states that the Withdrawal Agreement needs to provide clarity on how market surveillance and enforcement activities in relation to non-compliant goods will be conducted post–Brexit. It proposes three guiding considerations, which include that where data exchange is currently provided for in a sector (e.g. exchange of information on unsafe food products), on-going exchange should be facilitated.
D. Where goods are supplied with services, there should be no restriction to the provision of these services that could undermine the agreement on goods. The paper does not elaborate on the practical effect of this proposal, but recognises the importance of services to the UK market and invites future discussion of potential issues that may arise in relation to services linked to goods (including maintenance and repair services).
It is important to remember that, for now, these principles are simply an indication of the UK's preferred outcome and will be subject to negotiation and agreement with the EU. The position paper published by the Commission contains common themes including as key priorities the free circulation of goods and continued oversight by market authorities following the UK's withdrawal. However, the Commission's position paper contains few indications of how the general principles will be implemented in practice and highlights areas where its position differs from the UK's particularly in relation to on-going compliance procedures.
While it is clear that there is still significant work to be done to achieve clarity on what will happen to the movement of goods and services when the UK leaves the EU, this paper demonstrates a desire by the UK Government to avoid a "cliff-edge" outcome in March 2019 and provide a smooth transition with minimal disruption to businesses and consumers.