FEA Brexit Hub
The UK has left the EU, and the transition period after Brexit comes to an end this year. Check the new rules from January 2021 and take action now.
To ensure you stay up-to-date sign-up for Department for Business, Energy & Industrial Strategy email updates.
Updated Energy-related Product Guidance
The Department for Business, Energy and Industrial Strategy recently updated the guidance on Meeting climate change requirements form 1 January 2021 on gov.uk. This is to provide businesses with clarity on actions that they need to take in preparation for the end of the transition period.
The guidance provides practical information for placing energy-related products which are subject to Ecodesign and Energy Labelling regulations on the GB market from 1 January 2021. The key points to note are as follows:
- EU flags will need to be replaced with UK flags following the end of the transition period for any products newly placed on the GB market. Products placed on the Northern Ireland market will be required to meet EU regulations (i.e. bear an EU flag, not a UK flag) under the terms of the Northern Ireland Protocol;
- In order to place products on the EU market, GB businesses will be required to access the EPREL database via an authorised representative or importer established in the Union;
- Updated links to the latest guidance for placing manufactured goods on the UK, NI and EU markets are linked at the bottom of the notice.
What Brexit means for the UK (09.09.2020)
L Alan Winters, Professor of Economics of the UK Trade Policy Observatory at the University of West Sussex gives his expert analysis on factors including:
- Trade policy on Rules of Origin,
- Free Trade Agreements,
- Stock market developments,
- Will the pound go up or down?
All this and more was covered in our 30 minute webinar. Providing a valuable set of information and comment to assist with FEA member scenario planning.
Brexit: The Current State of Play (02.09.2020)
Terry Boniface, Assistant Director – Electronics and Machinery at BEIS. provides an informative update on the current state of play with Brexit covering key aspects such as:
• CE marking & standards
• UKCA/UKNI marking requirements and processes
• Border controls/movement of goods
• Tariffs and trading issues
• Goods related requirements for companies
• Employer/employee issues
• Implementation and Timing
• What you need to do/be aware of
Government Guidance on the UKCA
The Government has published (2nd September 2020) its guidance and standstill procedures regarding the introduction of the UKCA mark.
In summary, there is a 12 month period of continued recognition of CE marking and EU conformity assessment (more in a few OGD sectors such as medical devices and transportable pressure equipment) and a 24 month period (so 12 months beyond the end of recognition of CE marking) during which we are saying that the UKCA mark is mandatory but for a majority of goods can go on a sticker or accompanying document to help manufacturers with concerns about e.g. changing tooling.
However businesses will be encouraged to use the new UKCA mark and regime as soon as possible after 1 January 2021 and the expectation is businesses should start preparing now for its introduction.
The links below detail the announcements in full – which covers the status of UK CABs at the end of the transition period.
- What you need to do to comply with regulations on manufactured goods you place on the GB market from 1 January 2021.
- If you’ve already placed your goods on the market in an EU country (or in the UK) before 1 January 2021, you do not need to do anything.
- The UKCA (UK Conformity Assessed) marking is a new UK product marking that will be used for goods being placed on the market in Great Britain (England, Wales and Scotland). It covers most goods which previously required the CE marking.
- From 1 January 2021 any mandatory third-party conformity assessment for the EU market will need to be carried out by an EU-recognised conformity assessment body. This includes both EU based bodies and bodies in countries with which the EU has concluded a mutual recognition agreement.
- UK conformity assessment bodies will no longer be able to carry out mandatory conformity assessment for products being placed on the EU market unless agreed in negotiations.
UKCA marking - Letter to Government
Many members are seeking clarity on the role of CE marking and also the position they should adopt in relation to UKCA marking (guidance for which has been withdrawn from the .gov.uk web site).
We understand that an imminent ministerial meeting will consider this and as a result we have collaborated to put the attached letter to Rt. Hon. Michael Gove MP. We are seeking clarity in order that business can prepare adequately and also that they can apply the necessary labels to finished equipment. You may wish to adapt the letter for your own use.
EURIS Brexit Advice: How to plan for a No-Deal scenario (July 2020)
EURIS is issuing advice to members to allow for early planning for the undesired outcome of a no-deal Brexit. Much of the advice will still be useful and some necessary under most FTA scenarios too. We would advise all member companies to review our checklist and act on the recommendations set out below.
1. Map and Audit Supply Chains
Supply chain mapping is an essential early step in Brexit planning. Knowing where your inputs come from, and what product category they fall into can help assess the possible tariffs that might apply. Even if a company is ready for Brexit, it will be disrupted if a supplier is not prepared and cannot meet its contracts.
- Recommendation: Discuss Brexit readiness with your critical trading partners and ensure they have contingency plans in place. It is also worth considering alternative transit arrangements in case your existing transport routes become blocked or bottlenecked. UK Border guidance states that lorries arriving with goods without correct declarations will be held pending corrections and subject to fines.
2. Consider Authorised Economic Operator (AEO) status
This status allows faster clearance at borders if a company’s procedures are deemed as compliant by authorities in both countries.
- Recommendation: Consider applying for AEO status which entitles simplified customs procedures and faster clearance at borders The Institute of Export and International Trade cautions “achieving Authorised Economic Operator status is a time-consuming and often daunting exercise”. The process, which involves filling out a complex form takes a long time, so this should be an urgent priority.
3. Know your employees’ nationalities
While existing employees who are EU nationals can be expected to receive the necessary residency status, it is important to plan for cut-off dates and any differential status that might apply to new arrivals to the UK.
- Recommendation: Consider upgrading your IT system to be able to track the nationality status of employees. Doing so may not only help with compliance, it could also help to assess the extent to which the business has historically been reliant on EU workers.
4. Ensure adequate cash flow for additional inventory
Brexit poses a cash flow problem for trading companies because more complex port procedures could mean businesses need to be prepared to carry out more inventory, tying up additional working capital.
- Recommendation: Consider whether you will need to hold more inventory to buffer against potential delays at the border and small businesses should consider whether to apply for a government backed loan as these are interest-free for the first 12 months.
5. Establish your corporate customs infrastructure
HM Revenue & Customs estimates the number of customs declarations will rise from 55m to 255m annually. British companies will need to fill in customs declarations for all goods crossing the EU border when the UK leaves the single market. The Government has published (on 13 July 2020) the plans for the UK-EU Border for Import & Export of Goods from January 2021. Europe’s position is that there will be changes regardless, and that they will applying full third country import checks from the end of the transition period.
- Recommendation: If you are not yet familiar with them, prepare to use Import/Export Declarations for trade within Europe In a no-deal scenario, the Single Administrative Document is likely to be applied to all trade between the UK and EU. Detailed guidance is available. Also review your customs internal infrastructure and consider how to increase its capacity and understand whether you have time-sensitive deliveries that could be impacted by additional customs procedures and plan for what you might do to mitigate this.
6. Assess whether you are affected by EU free-trade agreements
Using a bilateral trade agreement can save costs on tariffs but will increase bureaucracy because businesses must prove each good is sufficiently British to qualify for zero rates. With the trade-weighted EU average tariff of only 2.3 per cent for non-agricultural goods, some exporters will decide to pay rather than face compliance costs, so companies will need to take a strategic decision after auditing their processes. If you are part of an EU supply chain which takes advantage of preferential tariffs under an EU FTA, UK content may no longer qualify post-Transition.
- Recommendation: Understand the EU’s Rules Of Origin (for ‘third nations’ outside of a trade deal) and how they would apply to your products, e.g. the evidence you would need to provide to gain customs clearance. Speak to your trade association representative about this as they will be able to help.
7. Audit all international contracts, renegotiate some
The legal provisions for importing and exporting that define who is responsible for shipping goods across borders is important and has significant tax implications. It is particularly important that contracts adequately clarify the terms for trade across EU borders, including how VAT is dealt with. In the event of no deal, you will need to ensure that contracts and International Terms and Conditions of Service reflect that they are now an international exporter or importer.
- Recommendation: Audit all your international contracts and consider whether any need renegotiation. Note: Some intra-EU contracts will not include incoterms, the legal provisions for importing and exporting that define who is responsible for shipping goods across borders. This is especially important for VAT and deciding responsibility for some other taxes, duties and tariffs.
8. Understand your Intellectual Property rights
Intellectual property protection, including patents, trademarks, registered designs and copyright could all change after Brexit. The British Government’s Brexit IP website seeks to reassure companies that such protections will still apply in the EU after Brexit, but it says it cannot give the same assurances for the UK. The Government says European patents will still apply in the UK but, according to the website, the UK is “exploring options” in other IP areas, such as trademarks and designs, because in many cases these will lapse after Brexit.
- Recommendation: Understand whether your IP rights might change after Brexit and take protective steps.
9. Check your CE Marking status
In a no-deal scenario, the testing and certification applied by your UK Notified/Approved Body may not be recognised by the EU as validating a CE mark on your product. For all CE marked products, anticipate that you will need to also apply UKCA marking either immediately post- Transition or at some point afterwards. For products traded into, from or through Northern Ireland, UK(NI) marking may also be required if a UK Notified/Approved Body has issued mandatory third-party certification.
- Recommendation: Your UK Notified Body may have opened an EU27 operation and made arrangements to transfer and re-issue this certification to ensure EU-validity but check this. If they have not, consider options for transferring to an EU Notified Body.