Parliament rejected the EU Withdrawal Agreement negotiated by Theresa May's government for a third time on Friday afternoon. The UK will now leave the EU on 12 April unless a further extension is unanimously agreed by the remaining Member States. The European Commission has announced that "no deal" has become significantly more likely, but it has completed its preparations and the EU is ready for a "no deal" scenario. Are you?
If the UK and the EU are unable to agree a way forward or a further extension by 12 April, the UK will leave the EU without any transition period. Approved by Parliament and awaiting ministerial signature, the draft Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019, will amend domestic product safety legislation in the event of a "no deal".
What do products companies need to know?
- When the UK leaves the EU, a business bringing products into the UK from the EU will become the "first importer" into the UK. This means they could be held liable for any defect in a product under the no-fault liability regime set out in the Consumer Protection Act 1987 (the "CPA"). They will also have additional responsibilities for compliance under the General Product Safety Regulation 2005 ("GPSR"). Previously these obligations under the CPA and GPSR attached only the first importer into the EU.
- Any defence to a claim under the CPA that a product is only defective due to compliance with an EU obligation will only apply where the EU obligation has been retained in UK law after Brexit. Otherwise, such a defence will only be applicable in relation to UK obligations.
- A new UK framework for conformity assessment will come into effect.
- Goods that are conformity assessed by a UK approved body after Brexit will be required to use the UKCA mark.
- The EU will not recognise the UKCA marking so products sold in EU markets will continue to require a CE marking. The UK, however, will continue to recognise assessment by an EU notified body for a limited period, so products bearing a CE marking can still be placed on the UK market for the time being.
- Product labels may need to be updated to reflect the fact that the UK is no longer part of the EU.
- All imports and exports to the UK will be under World Trade Organisation rules and may be subject to tariffs.
- For product recalls, the Safety Gate database will no longer be available to the UK. BEIS intend to make an equivalent UK database of product safety and market surveillance information available to UK companies on Exit Day.
Preparing for a "no deal" scenario
While it is still possible that the UK and the EU will agree a way forward that avoids the UK leaving without a deal, it is important that businesses prepare for this scenario. Some of the key things to consider include the following.
- Companies that place CE-marked products on the market should make sure they are aware of the proposed changes to compliance requirements. A summary of these changes can be found in our "no deal" Brexit quick guide here. New importers have an 18 month transition period during which time they are allowed to put any additional details on documentation provided with the product, rather than on the product itself.
- Companies selling non-harmonised goods such as clothing, furniture or bicycles will no longer be able to take advantage of the mutual recognition of essential requirements between the UK and the EU. Companies should check whether the applicable national requirements for their products have changed in each jurisdiction in which they're selling the product.
- Companies whose products are assessed by UK conformity bodies will have to display the UKCA mark. If they also sell the products in the EU they will also need to display the CE mark. Companies should ensure they are prepared for the additional labelling requirements.
- Companies importing products into the EU from the UK or into the UK from the EU should consider whether they have any other additional obligations after Brexit.
- While the UK initially intends to mirror current EU legislation to avoid further disruption, companies should be aware that over time UK requirements could diverge from EU requirements and should make sure that they are prepared for any divergence.
- Companies should conduct analysis of their supply chain and consider where delays or other complications may potentially affect the business e.g. any customs considerations.
Both the UK and the EU have published guidance for companies in the event of a "no deal" scenario and companies should make sure that they consider the potential implications for their products. Our Global Products Law team is advising companies on the possible impact Brexit might have and helping them be prepared for whatever form Brexit eventually takes. Get in touch with our team for more information.