Brexit: Product Compliance and Liability implications

By Ewan Grist, Pieter Erasmus

09-2021

Whilst the UK exited the EU on 31st January 2020, the transition period provided for by the Withdrawal Agreement, during which time EU law continued to apply in the UK, only ended on 31st December 2020. EU law ceased to apply in the UK from that point. However, the European Union (Withdrawal) Act 2018 (“Withdrawal Act”) served to convert EU law as it stood at the end of the transition period into domestic UK law and preserve laws made in the UK to implement EU obligations. It also created temporary powers to make secondary legislation to enable corrections to be made to the laws that would otherwise no longer operate appropriately after the UK has left, so that the UK legal system continues to function correctly outside the EU. 

The EU and the UK have now also agreed the terms of a detailed post-Brexit Trade and Cooperation Agreement (see here for full text) (“Agreement”) which entered into force from 1st January 2021. While it is not the intention of this article to address the Agreement in detail, Chapter 4 touches on aspects such as product safety and marking/labelling in the context of preventing unnecessary technical barriers to trade between the UK and the EU (the “Parties”). In this regard, the Parties have agreed to a number of forward-looking provisions that will regulate the future relationship between the Parties. Such provisions relate to, amongst other things, conditions relating to:

  • conformity assessment and third party conformity assessment as a positive assurance that a product conforms with a technical regulation (see Articles TBT.6(2) and (3) of the Agreement);
  • mandatory marking or labelling of products (see Article TBT.8 of the Agreement); and
  • cooperation on market surveillance and non-food product safety and compliance (see Article TBT.9 of the Agreement).
As an aside, it is noted that, at least from a product labelling and conformance perspective, the Agreement does not materially alter the general position that would have occurred had there been a no-deal Brexit. 

This article briefly sets out the implications of Brexit on product compliance/regulation and liability, now that the transition period has ended. 

The impact of Brexit on this regulatory regime is of considerable concern for both UK manufacturers and EU manufacturers alike. This is particularly so given that, in many areas, product development and manufacturing lead times are long, and manufacturers are naturally keen to avoid costly redesigns or re-labelling.

Key changes to the UK product regulatory regime from 1 January 2021

In the EU, the essential requirements related to health, safety and environmental issues for products to be lawfully placed on the market are set out in a raft of EU directives [1] (which need to be implemented in each EU Member State), sometimes called the New Approach Directives. Each directive applies to a particular product/risk type (for example the Radio Equipment Directive, the Medical Devices Directive, the Low Voltage Directive, etc) and typically requires that products which comply with the relevant essential requirements set out therein shall be CE marked to indicate that compliance. For those products to which no specific directive applies, they must comply with the General Product Safety Directive.

These directives have largely been implemented into UK law by a corresponding raft of some 29 UK regulations. As a consequence, the UK regulatory requirements applicable from 1 January 2020 will in fact substantively continue to mirror the existing EU regulatory requirements until such time as the EU or the UK chooses to amend its regulatory requirements.

The Brexit-related changes to these UK regulations are set out in the Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019, which came into force on 1 January 2021. As regards products that are not governed by any product-specific UK regulations, the General Product Safety Regulations 2005, as amended ("GPSR") continue to apply to products being placed on the market in the UK from 1 January 2021.

While the focus of this article is on the UK product compliance regime, we also briefly highlight a few of the main aspects to be considered in respect of the movement of goods from the UK to the EU. Some of the major changes now applicable to the UK/EU product compliance regime include the following:

Introducing the UKCA mark and UK Declaration of Conformity for products placed on the Great Britain market

  • The UK has introduced its own product safety mark broadly mirroring the EU’s CE mark: the UKCA ('UK Conformity Assessed') mark. Subject to the grace period explained below, the UKCA mark needs to be used on products being placed on the Great Britain [2]market (i.e. England, Wales and Scotland) to indicate their compliance with the applicable UK requirements. In essence, the UKCA mark needs to be used on those goods which would have required a CE mark if placed on the EU market (see further here for general Government guidance relating to the use of the UKCA mark). This regime follows essentially the same principles as the previous CE marking regime, but with the safety and compliance standards, authorised representative/responsible person and notified body requirements all now being valid for the UK only. To date, there have been no material changes in respect of the required safety and compliance standards themselves, although of course future divergence is possible. 
  • Subject to the below comments on timelines for compliance, for products placed on the Great Britain market, the previous EU declaration of conformity with the relevant and applicable product standards must transition to a UK-only declaration of conformity with the relevant UK laws, and the application of a UKCA mark (if applicable). One particular point to note is that UK-only declarations of conformity need to refer to the Great Britain versions of any relevant international standards which have been applied, rather than the versions of those standards referred to in the EU’s Official Journal. 

Timelines for UKCA mark compliance

  • Save for the exception explained below, according to official UK Government guidance (see here), most CE marked products may still lawfully be placed on the Great Britain market until 1 January 2023. This deadline was previously 1 January 2022, but the UK Government recently extended this time period to allow businesses to adjust to the new requirements (see here).
  • Certain products placed on the Great Britain market, however, require the UKCA mark before 1 January 2023. Products fulfilling the following criteria now require the UKCA mark: the products are placed on the Great Britain market; they are governed by legislation requiring UKCA marking; and the conformity assessment has been carried out by a UK-based conformity assessment body. Please note that this does not apply to existing stock (i.e. products that have been fully manufactured, CE marked and ready to place on the market before 1 January 2021). In these cases, such products may still be sold in Great Britain with a CE marking even if covered by a declaration of conformity issued by a UK notified body before 1 January 2021, provided such products are placed on the market before 31 December 2022.

Placing products on the EU market and notified bodies

  • Whilst the most CE marked products can continue to be lawfully placed on the Great Britain market until 1 January 2023 (see above), the UKCA mark will not be recognised in the EU. Therefore, any products which are to be placed on the EU market and require CE marking, must have that CE marking, irrespective of whether they also meet UK requirements and are UKCA marked. As a practical matter, many manufacturers seeking to place their products on the market in both the UK and the EU will seek to ensure that those products comply with both UK and EU product safety requirements and can be both UKCA marked and CE marked accordingly. There is no restriction on marking products with both a CE mark and a UKCA mark, provided that the respective requirements to properly place such marks on the product are met under both regimes.
  • UK-based notified bodies, which were designated to independently assess the conformity of certain products requiring CE marking before being placed on the EU market, are now no longer established in the EU, and accordingly, the conformity assessments carried out by such UK bodies, including those assessments carried out prior to 1 January 2021, are no longer valid for the EU compliance regime. Manufacturers whose products currently rely on third-party conformity assessments carried out by UK notified bodies will now require new conformity assessments to be carried out by EU-based notified bodies in order to ensure continuing compliance with the EU regime and to continue to place those products on the EU market (see further here for general Government guidance relating to the placing of products by UK manufacturers on the EU market). 

Shift in status of economic operators

  • Brexit has had an impact on the status of the economic operators (i.e. which entity is deemed the "manufacturer", "importer" or "distributor") in a supply chain which involves the UK and CE/UKCA marked products. This is important because under both the EU regulatory regime and the new UK regulatory regime, each economic operator has different regulatory obligations placed upon them depending on whether they are deemed to be the "manufacturer", "importer" or "distributor". For instance, if before Brexit, a UK manufacturer were sending products from the UK to a French entity for onward delivery to the customer, the French entity will only have the relatively light regulatory obligations of a distributor (the more onerous obligations being carried by the "manufacturer" and/or "importer" instead). However, under that same supply chain after the Brexit transition period (i.e. from 1 January 2021), the French entity becomes the deemed "importer" into the EU. The obligations of an importer are more onerous than those of a mere distributor and include the need to ensure that the manufacturer has taken the necessary steps to allow the product to be placed on the market, that the requisite documentation is available upon request, and that the importer’s name and contact details should also be displayed on the product or packaging. Similarly, products imported from the EU (or from anywhere outside the UK) and placed on the UK market will require the UK "importer" and/or "distributor" to comply with any UK regulatory requirements. The various actors in the supply chain must therefore be aware of their regulatory obligations post-Brexit, which may have changed. Such obligations include specific product labelling requirements.

This assessment also applies to products governed by the GPSR, which envisage the “producer” and “distributor” entities in a supply chain. 

Placing products on the Northern Ireland market

  • It is important to note that the rules relating to the placing of products on the Northern Ireland market differ to those relevant to Great Britain. EU rules will continue to apply in respect of certain goods (e.g. medical devices, cosmetics, tobacco products, etc.). In Northern Ireland, EU conformity markings (including the CE marking) will continue to be used to show that goods meet EU rules. 
  • If manufacturers use a UK body to carry out mandatory third-party conformity assessment, then manufacturers also need to apply a UKNI marking (in addition to the CE marking). In this regard, goods bearing both the CE and UKNI markings cannot be placed on the market in the EU (because of the fact that the notified body is not based in the EU) (see further here for general Government guidance relating to the placing of products on the Northern Ireland market). 
Summary of potential actions

A basic summary of some of the potential actions for those business placing products on the UK and/or EU market to ensure continued compliance is set out below. For present purposes, we focus on the position relating to the Great Britain and EU markets. Businesses are urged to seek urgent legal advice if they are in any doubt as to their obligations.

Intended business model after 1 January 2021

Required Actions

 

For products which can be self-certified for compliance by manufacturer:

 

Businesses placing products on the Great Britain market 

  • Use UKCA mark; or until 1 January 2023, CE-marked products can continue to be placed on the Great Britain market as well. However, when this period comes to an end, such products will also/instead need to be marked with the UKCA mark (UKCA mark can only be applied if the product complies with UK regulatory requirements then in force)
  • EU-based authorised representatives (if appointed before 1 January 2021) can still be used for UKCA-marked products, but a UK-based authorised representative must be appointed for new products placed on the Great Britain market after 1 January 2021
  • For cosmetic products, a UK-based responsible person must be appointed from 1 January 2021

 

Businesses placing products on EU market only

  • Products can continue to be placed on the EU market by virtue of CE mark (CE mark can only be applied if the product complies with EU regulatory requirements then in force)
  • If using a UK-based authorised representative or responsible person, an EU-based authorised representative or responsible person must be appointed
     

 

For products which require conformity assessment by third-party notified body:

 

Business placing products on Great Britain market only, using UK-based notified bodies and/or UK-based authorised representatives/responsible persons (as applicable)

  • Review amended UK regulations applicable to specific product category
  • If relevant, prepare for switchover to UKCA mark by latest 1 January 2023, unless products require UKCA marking before then (see above)
  • Routinely monitor UK Office for Product Safety and Standards ("OPSS") website here for further updates 
     

Business placing products on Great Britain and EU markets, using UK-based notified bodies and/or UK authorised representatives/responsible persons (as applicable)

  • Review amended UK regulations applicable to specific product category

    For Great Britain sales:

  • If relevant, prepare for switchover to UKCA mark by latest 1 January 2023, unless products require UKCA marking before then (see above)
  • Routinely monitor OPSS website here for further updates
     

For EU sales:

  • Arrange for third-party conformity assessments to be carried out/transferred to EU notified body (see EU NANDO database here), because UK-notified body no longer recognised by EU
  • Appoint EU-based authorised representatives/responsible persons, if required, to meet EU requirements for CE marking
     

Business placing products on Great Britain market, using EU notified bodies and/or EU authorised representative/responsible persons (as applicable)

  • Review amended UK regulations applicable to specific product category
  • Subject to any further OPSS guidance, generally, CE-marked products can continue to be placed on the UK market until 1 January 2022 (see above), and EU authorised representative can continue to be used after 1 January 2021 – so maintain validity of CE mark and prepare for future changeover to UKCA mark
  • If selling cosmetic products, a UK-based responsible person must be appointed from 1 January 2021
  • Routinely monitor OPSS website here for further updates

Business placing products on EU market, using EU notified bodies and/or EU authorised representative/responsible persons

No action required


Product liability

In terms of product liability, save for potential governing law or jurisdiction issues, there is currently no significant change in relation to claims brought in contract, tort or strict liability (at least in the short to medium term). Although the strict liability regime arose out of EU law, it has been implemented in the Consumer Protection Act 1987, and is widely regarded as a success. As an accepted part of the UK consumer landscape, it is difficult to envisage this disappearing or being materially altered any time soon.

Conclusion

Businesses placing their products on the market in the UK (i.e. Great Britain and/or Northern Ireland) or the EU need to consider the steps they need to take to ensure they are compliant. This is particularly relevant for those businesses selling products which require third-party conformity assessments by notified bodies, many of which are likely to require re-assessment by (or transfer to) either a UK-based or an EU-based notified body depending on the market in which the products are to be sold.

A careful watch should be kept by business on any sector-specific, or more general, guidance published by regulators regarding product compliance regimes in the EU and UK, particularly where businesses sell the same goods into both the UK and EU. Now that the post-Brexit transition period has finished, it is of utmost importance for businesses to ensure that they are now fully compliant in both territories, particularly so if regulatory requirements start to diverge over time.

Last updated: 16 September 2021

 

[1] But in the case of cosmetics, the EU Cosmetics Regulation.

[2] The position relating to placing products on the Northern Ireland market differs, and is briefly referred to further below. Post-Brexit, it is important to distinguish between Great Britain (being England, Wales and Scotland), Northern Ireland and the UK (which is Great Britain and Northern Ireland, collectively). 

 
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