Importers and exporters– what happens after Brexit?

The end of the transition period under the Withdrawal Agreement is timed at precisely 11pm on 31 December 2020.  At that moment in time, a snapshot of all EU law in existence will be imported into UK law.  The UK government will simultaneously regain legislative power to enact new law which changes and diverges from EU law.

In anticipation of these new powers, the UK government has already enacted hundreds of new pieces of legislation timed to come into force at the moment of Brexit.  Mostly, these new laws update UK law to be consistent with the UK’s new status as a former Member State of the EU. For example, any reference to the EU Commission having power over the UK is being obliterated from the statute books, with these former powers being shared out amongst institutions across the UK.

But importers and exporters of goods between the UK and the EU do not operate to such precise timelines.  Each week billions of pounds of goods are manufactured in the UK and the EU for supply across these markets.  At the moment of Brexit, some products will still be being manufactured, others will be held in stock at warehouses; some products will be in transit heading towards the new border, others will have passed the border and be on their way to distributors and end customers.  In the inevitable confusion at the moment of Brexit, how will manufacturers, importers, distributors and customers know which rules apply to these goods?

We will have to await the outcome of the trade negotiations to find out whether tariffs will be payable on goods reaching the border after Brexit.  In absence of a free trade agreement those involved in supply chains that span the EU and the UK will have to check the WTO trade schedules to find out which rates apply to their goods.

Some goods cannot currently be sold in the EU and UK market at all unless they conform with EU product safety standards and are CE Marked.  This covers a huge range of product types from toys to electrical goods and from cosmetics to medical products.  Can those products still be imported and exported between the EU and UK as they are now?  We need to look to the Withdrawal Agreement to find out what happens at the moment of Brexit.

Any product which has already been manufactured and which is already the subject of a supply agreement (whether or not for money) for the EU or UK markets can continue to be made available on those markets under the existing CE mark rules and can even continue to be transported between the two markets post Brexit until reaching the end customer.

However, the fact that a particular product type was CE marked before Brexit is not sufficient.  The particular product needs already to have been manufactured and been sold to qualify, although it needn’t have actually left the manufacturer’s warehouse before Brexit. Businesses wanting to rely on this rule will need to keep documentary evidence that the goods had already been manufactured and sold pre-Brexit.

What happens after 31 December 2020? 

The rules are changing although not all of them straightway.  A new UKCA mark is being introduced in the UK to replace CE marking for those products supplied to the UK market (with both regimes applying in Northern Ireland).  However, CE marked goods can still be imported into the UK under existing CE mark rules for a further twelve months and will, in most cases, only have to comply with the new UKCA mark rules from 1 January 2022.

UK businesses exporting goods to the EU are not so lucky.  They will have to conform with the full EU CE Mark regime straightaway.  Where a product has to be conformity assessed by an independent Notified Body, an existing report from a UK notified body will no longer be valid for the EU market.  Those products will either need to be retested by an EU notified body or an arrangement put in place to have the test reports transferred to and accepted by an EU notified body.  UK businesses exporting to the EU are advised to check whether their products need further conformity testing  or to have their test documents transferred to an EU Notified body to be sold in the EU post-Brexit.

Further information on the UK’s new product conformity rules coming into force and how UK businesses will need to comply with the EU rules post Brexit will be covered in our next update.