In this page companies and individuals in the cosmetic and personal care industry can access CTPA public advice on Brexit.
On 27 August, CTPA held a joint Brexit webinar with the UK Customs Academy exploring the changes in requirements under the Cosmetics Regulation, REACH and customs procedures. The recording of this webinar is available at this link; CTPA presentation is available for download here.
The following sections contain advice on each of these topics and clear information on which actions must be taken now to be ready for 1 January 2021.
- Tariffs and Rules of Origin
- Moving Goods Between the UK and the EU From 1 January 2021
- Goods on the market
- Sell in the UK
- Sell in the EU
- Regulations in Northern Ireland
- Denatured Alcohol
- New Immigration Scheme
The UK left the EU on 31 January 2020 with a Withdrawal Agreement (deal); it is business as usual from 1 February 2020 until 31 December 2020. Members can view online the Withdrawal Agreement (WA) and the Political Declaration for insights into the future relationship between the UK and the EU. Northern Ireland will operate differently to Great Britain, under the provisions that are outlined in the NI Protocol within the WA.
During the transition period, while the UK is officially out of the EU, EU law remains applicable in the UK. In practice, companies will continue to operate during the transition period itself as they have in the past; however, it is CTPA advice that this time shall be used to prepare for what is to come from 1 January 2021.
CTPA continues to input into the ongoing negotiations for a comprehensive Free Trade Agreement (FTA) with the EU, whilst also supporting the UK Government in shaping the future UK regulatory framework. Before the start of the negotiations, both the UK and the EU issued their negotiation mandates, highlighting the key discussion points for the UK/EU future relationship.
CTPA published its position papers with the key negotiation arguments for the future cooperation between the UK and the EU and the proposals for the future UK regulatory frameworks for cosmetics. The position papers were presented on 28 February to Government officials and are available here.
Following the negotiations, the UK and the EU have also published their proposed draft legal texts for the FTA:
Companies may find useful reading this summary of both proposals issued by the House of Commons Library. Of further interest, the House of Commons Library also published this report summarising the status of the EU/UK negotiations so far.
On 12 June 2020, the second meeting of the Withdrawal Agreement Joint Committee was held by video conference. The meeting was co-chaired by the UK Chancellor of the Duchy of Lancaster, The Rt Hon Michael Gove MP, and EU Commission Vice President, Maroš Šefčovič, and attended by delegations which included Member State representatives and the First Minister and deputy First Minister of the Northern Ireland Executive. It is important to highlight that at the meeting the UK confirmed its decision not to extend the transition period.
There are therefore two possible scenarios that can occur and which have different implications: one scenario sees the implementation of a Free Trade Agreement (FTA) which sets the terms of future trade between the UK and the EU; the other scenario would arise if an FTA is not agreed and the UK and the EU continue to trade under World Trade Organisation (WTO) rules.
Without extension of the transition period, the timing for completing negotiations is very tight; however, it is still possible for the UK and the EU to agree on a ‘bare-bones’ FTA.
Independent of the outcome of the negotiations, there are specific actions that companies must take now to prepare for the changes that will happen as of 1 January 2021. These are explained in detail throughout CTPA Brexit advice.
Tariffs and Rules of Origin
The UK and the EU are currently negotiating with the objective of 0% tariffs for all goods. If a liberal FTA is agreed, trade between the UK and the EU will continue with 0% tariffs.
Should an FTA not be agreed, the UK and the EU would continue to trade under WTO rules. This means that:
- goods originating from the UK going into the EU will be subject to EU tariffs under WTO rules, the European Common Customs Tariff.
- goods originating from the EU entering into the UK will be subject to the UK Global Tariffs plan.
The UK Global Tariffs plan will also be applicable to any goods imported into the UK from other third countries with which the UK has no specific FTA, or which doesn’t have any additional considerations under WTO rules, such as developing countries or regions.
Moving Goods Between the UK and the EU From 1 January 2021
Independent of the outcome of the Brexit negotiations, the borders between the UK and the EU will be operating from 1 January 2021. The UK is no longer part of the EU and upon leaving the Single Market and the Customs Union, the free movement of goods will end. It is really important to gain the understanding of how moving goods between the UK and the EU will change and act now to prepare.
Border Operating Model
On 13 July, the UK Government published the ‘Border Operating Model’, a guidance explaining how the EU/GB border will operate from 1 January 2021. The guidance covers in detail the phased plan for imports into GB and exporting goods to the EU, whilst also covering roles and responsibilities for these tasks.
- Both imports and exports into and from GB will require customs declarations.
- Applicable tariffs under the UK Global Tariffs will have to be paid on goods imported into the UK (however, if an FTA with the EU will be in place, tariffs may not apply).
- VAT will be levied on imports of goods from the EU, following the same rates and structures as are applied to Rest of the World imports.
- Safety and security declarations may be needed for specific types of goods.
- Additional requirements may apply only to specific goods (e.g. foodstuff, goods covered by International Convention CITES, excise goods).
Phased Border Control Plans
The UK Government border control plans will be implemented into three different stages until 1 July 2021, to give businesses more time to prepare.
For more information, please visit the UK Government website.
Actions to take – Imports into GB
There are clear actions that companies can take now to prepare to continue to trade with the EU as of 1 January 2021. It is key for companies to prepare now, as these steps need to be taken independent of the outcome of the Brexit negotiations. Further information can be found here
For full details, please consult the ‘Border Operating Model’ guidance. The UK Government also published a simplified decision tree of all requirements and steps for importing goods into GB from the EU.
Cosmetic products imported into the UK will have to comply with the UK Cosmetics Regulation that will be issued before the end of the Brexit transition period. For further help, please view the ‘Sell in the UK’ section of CTPA Brexit advice.
Actions to take – Exports to the EU from GB
Exporting procedures can be checked here and the UK Government also published a simplified decision tree for all requirements and steps for exporting goods from GB to the EU. More information is also available in this communication from the EU Commission.
Cosmetic products exported to the EU will have to comply with the EU Cosmetics Regulation 1223/2009. For further help, please view the ‘Sell in the EU’ section of CTPA Brexit advice.
Moving goods into/out of/through Northern Ireland
The Withdrawal Agreement (WA) under which terms the UK left the EU on 31 January 2020 also includes a Protocol on Northern Ireland, providing the legal framework for trade in NI. An explanatory note is available here.
Whilst some fine details of the procedures applicable for moving goods in/out/through Northern Ireland will depend on negotiations and agreement at the Joint Committee, there are basic legal terms already agreed as part of the NI Protocol and that will be part of future trade to/from/through NI. More information is available here.
Goods on the market
Article 41 of the EU Withdrawal Agreement states that goods placed on the EU27 or UK markets before the end of the transition period may be further made available and circulate between the two markets until they reach the end consumer. Proof of when the goods were placed on the market will be required. For the definition of 'placing on the market' and 'making available on the market', please consult the Blue Guide.
Sell in the UK
With regards to future UK legislation, the EU Withdrawal Act provides for EU law to be retained in the UK post-Brexit, by adaptation into UK law. The EU Withdrawal Agreement Bill legislates to allow for changes to be introduced while transposing EU law into UK law to correct deficiencies. This means that in the short term (at the end of the transition period) UK law will be constituted of retained EU law, therefore a mirror image of EU law, with some differences in some mechanisms that depend on the UK Government structure and on the outcome of the negotiations.
UK Cosmetics Regulation
The Statutory Instrument (SI) Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019, which includes the UK Cosmetics Regulation within Schedule 34, was issued last year to provide a UK regulatory regime for non-food goods should the UK have left the EU without a Withdrawal Agreement (WA). Therefore, this SI was initially in place for a ‘no deal’ Brexit.
On 2 July, the UK Government Department Office for Product Safety and Standards (OPSS) announced the entry into force of the same SI from 1 January 2021; we therefore have confirmation that the UK legislation that was published for a ‘no deal’ Brexit is not expected to change in the current context.
However, a series of SIs have already been published, or are scheduled to be published throughout the next few months to implement technical modifications and make the Product Safety and Metrology SI suitable to the context where the UK left the EU with a WA. The 7th amendment will be the main amending SI for cosmetic products, which is due to be published and go into Parliamentary process on 14 October 2020. Below is the list of amendments to the SI; this list will be kept up to date.
- “Extent & Meaning of the Market” - The Product Safety and Metrology etc. (Amendment to Extent and Meaning of Market) (EU Exit) Regulations 2020 – SI – 676: The Product Safety and Metrology etc. (Amendment to Extent and Meaning of Market) (EU Exit) Regulations 2020. This SI ensures that the Product Safety and Metrology is only applicable in GB, according to the provisions under the NI Protocol. This means that the obligations for cosmetics under Schedule 34 of the SI is only applicable to GB and not NI.
- “Exit Day” - The Product Safety and Metrology (Amendment) (EU Exit) Regulations 2020 (currently being sifted): The Product Safety and Metrology (Amendment) (EU Exit) Regulations 2020. This SI changes references to “Exit day” to “Implementation Period completion day”, which is 31 December 2020.
- “OSI – Other Separation Issues” – The Product Safety and Metrology etc. (EU Withdrawal and EEA EFTA Separation Agreements) (EU Exit) Regulations 2020 SI, which was laid on 17 August 2020.
Key Actions to Take Now
Companies wishing to continue to sell cosmetic products on the UK market from 1 January 2021 must take the below actions now.
- Set up a UK Responsible Person
- Update the product label (both primary and secondary packaging) with the UK RP name and address
- As per Article 19 of the UK Cosmetics Regulation draft SI, products with an EU address, but no UK address, on pack can be made available on the UK market for 24 months after Exit day.
- Update the product label with the country of origin, if the product is made outside of the UK
- Prepare for the UK product notification. The UK will have its own UK notification database, which will be available from 1 January 2021. UK RPs will need to open an account on the UK notification database.
- Existing products à notifications from EU CPNP must be notified within 90 days from 1 January 2021. To prepare for this, companies have to download the 'xml' files of their existing notifications under the EU CPNP. The new UK notification database will support the upload of the 'xml' files.
- New products à a brand new notification is needed on the UK notification database.
- Translate the PIF in English, which must be made available to UK authorities at the UK RP address.
- Confirm the qualifications of your safety assessor. The safety assessor qualification must be accepted in the UK.
- Check your supply chain for changes to roles and responsibilities. Your current distributors will become importers under the future UK Cosmetics Regulation and they will automatically take on the roles of RP. You need to ensure that your distributors will have a mandate in place with your new UK RP, to ensure the responsibility for your products is under your appointed legal entity.
- Plan for future changes in the compliance of product formulations. Ingredients restrictions/bans/assessments that have been published in the EU Official Journal up until 31 December 2020 will be automatically implemented into UK law. Assessment of ingredients published after 1 January 2021 will be carried out independently by the UK.
CTPA would like to emphasise the fact that current distributors bringing cosmetics into the UK market from the EU/EEA will become importers and their responsibilities will change. In line with the EU Cosmetics Regulation, the UK Cosmetics Regulation SI automatically considers importers as the RP. However, an importer may designate a person established in the UK as the RP by written mandate. CTPA has also published specific advice for current distributors of cosmetic products between the UK and the EU.
There will be a UK regulatory framework for chemicals based on EU retained law, however its practicalities and duplication requirements very much depend on the outcome of the negotiations. Therefore, it is unclear how UK REACH will be affected by the negotiations. Members will be aware that the ‘No deal’ Brexit UK REACH SI was adopted in March 2019; CTPA understands this is likely to form the basis of any future UK chemicals legislation. Two amendments of the UK REACH SI were also published in 2019 to address some initial industry’s issues:
- the REACH etc. (Amendment etc.) (EU Exit) (No. 2) Regulations 2019
- The REACH etc. (Amendment etc.) (EU Exit) (No. 3) Regulations 2019
Under the UK REACH SI companies will have specific actions to take and may change their role vs EU REACH and therefore their obligations. Of particular short-term importance, are the transitional provisions under the UK REACH SI as they apply to chemicals already registered under EU REACH, should companies want to continue to sell them on the UK market. Updated guidance on the obligations was published by Defra on 1 September 2020 and it is summarised below.
EU REACH registration holders based in the UK will need to provide preliminary information to the Health and Safety Executive (HSE) before 30 April 2021. The full registration will need to be submitted according to the reviewed timelines as per the table further down this page, with a starting date of 28 October 2021.
Accordingly, EU REACH registration holders within the EU will need to extend their registrations to cover UK REACH via their UK-based affiliate or by appointing a UK-based Only Representative.
Downstream users (DU), which include manufacturers or importers of finished cosmetic products, could have new obligations under UK REACH. DUs are therefore encouraged to map their supply chain and understand their roles and responsibilities, and establish a dialogue with suppliers of raw materials and ingredients, leading to the below possible scenarios.
- For chemicals which have been registered under UK REACH by their suppliers, DUs will maintain this role and will not have any additional obligations.
- For those chemicals which have not been registered under UK REACH by their suppliers, DUs could become importers and would be taking on additional obligations under UK REACH. A 300 day deadline has been given to complete a Downstream User Import Notification (DUIN) for these chemicals introduced into the UK market, until the 28 October 2021. After this deadline, the full registration dossier will have to be presented within the timelines given in the table below.
These timelines are applicable to EU REACH registrations which have been extended to UK REACH by their registration holders and for those registrations following the submission of a DUIN. In both cases, they take effect on the 28 October 2021.
The negotiations surrounding access to the ECHA (European Chemicals Agency) database under EU REACH, which could negate the need for full data submission, will continue, and cooperation with regards to chemicals will still be sought under the future UK-EU relationship. CTPA continues to work with the UK Government, Cosmetics Europe (CE) and the Chemical Industries Association (CIA) to push for cooperation between UK authorities and the European Chemicals Agency (ECHA) in respect of chemicals. For more information, please download the CTPA Position paper on the chemicals regulatory framework, which highlights CTPA position as too how the UK and the EU could continue to cooperate specifically for chemicals, and how the UK future REACH Regulation might be implemented.
On 28 May 2020, the CIA and the European Chemical Industry Council (Cefic) published two joint position papers on Brexit and negotiations:
- Views on the future relationship negotiations between the EU and the UK, providing a general overview of the chemicals industry position on tariffs and rules of origin, regulatory cooperation and consistency, customs procedures and other matters of interest;
- View on REACH related issues in the future relationship between the EU and the UK, providing a detailed proposal of how the UK and the EU should establish their cooperation on chemicals and especially in relation to the Registration, Evaluation and Authorisation of Chemicals (REACH) Regulation.
Key Actions to Take Now
While it is still uncertain whether there will be any collaboration between the UK and the EU in regard to chemicals, companies are advised to prepare for UK REACH by taking the below actions.
- Map the chemicals within your cosmetic products that you are directly importing into the UK from the EU.
- Are they above 1 tonne per legal entity per year? If yes, you will need to comply with the UK REACH requirements.
- Are the suppliers of my raw materials going to ensure compliance with UK REACH?
- If not, plan for the possibility of having to change your formulations.
- For more information, please consult the CTPA Factsheet available for download in the above REACH section.
Sell in the EU Market
EU Cosmetics Regulation
During and following the transition period, the EU Cosmetic Products Regulation (CPR) will continue to apply to EU27 Member States, as is currently the case. UK companies wishing to continue to sell cosmetic products to the EU27 market will have to comply with the CPR.
On 13 March 2020, the EU Commission updated its readiness notice for cosmetics to remind companies of the legal situation applicable as of the end of the transition period on 31 December 2020. The document also explains provisions related to the Withdrawal Agreement and rules applicable to Northern Ireland. The key points are highlighted below.
- Companies wishing to continue to market cosmetic products in the EU market must set up a Responsible Person (RP) within one of the EU27 Member States. The document also highlights the fact that importers of cosmetic products from the UK into the EU will automatically be considered as the RP (as stated under the Article 4(5) of the EU Cosmetics Regulation) and must therefore take appropriate measures or solutions.
- The new EU-based RP will have to transfer all existing notifications held by the current UK RP to its own new account in the Cosmetic Product Notification Portal (CPNP) before the end of the transition period.
- The new EU-based RP will need to make the Product Information File (PIF) available at its address, in the language as required by the EU Member State competent authority.
- The name and address of the new EU-based RP must be on the label of the cosmetic product, on both primary and secondary packaging.
- Check that the qualifications of the safety assessor are accepted in the EU Member State where the new RP is based.
- Article 41 of the EU Withdrawal Agreement states that goods placed on the EU27 or UK markets before the end of the transition period may be further made available and circulate between the two markets until they reach the end consumer. Proof of when the goods were placed on the market will be required. The notice also explains which definition of ‘placing on the market’ applies, together with an example.
- The NI Protocol provides for EU law to be applicable also in NI. For more information, please see the specific section on NI below.
EU REACH will continue to apply to EU27 Member States as is currently the case. UK companies wishing to continue to sell cosmetic products and chemicals to the EU27 market will have to comply with EU REACH.
On 30 March, the EU Commission updated its technical notice on REACH to advise companies on how to prepare to ensure compliance with EU REACH at the end of the Brexit transition period on 31 December 2020.
The document reflects key actions that companies have to take if the future relationship between the UK and the EU will be solely based on the terms of the Withdrawal Agreement; the document also explains rules applicable to Northern Ireland. The key points are highlighted below.
- Registrations held by a UK-based registration holder must be transferred to an EU27-based entity before the end of the transition period.
- EU-based Downstream Users (DU) using UK-registered substances must ensure that the registrant is planning to transfer the registrations to an EU27-based entity. If this is not an option, the DU can re-arrange the supply chain to source EU-registered substances; or the DU can decide to register the substances under EU REACH as an importer.
- A UK-based lead registrant of a joint submission group must transfer its role to an EU27-based lead registrant.
- At the end of the transition period, the Protocol on Ireland-Northern Ireland applies. The NI Protocol makes certain provisions of which EU law applies in NI. The NI Protocol provides that Regulation (EC) No 1907/2006 applies to NI.
- A substance placed on the NI market above 1 tonne per year has to be registered under EU REACH; this applies to substances manufactured in NI or imported into NI from GB.
- A substance placed on the market in NI and then shipped to the EU is not an imported substance in the EU, as it would be already registered under EU REACH. A UK registrant established in NI need not transfer the registration to a manufacturer or importer in the EU.
- An Only Representative established in NI will be considered to be an Only Representative in the EU.
Key Actions to Take Now
Map the chemicals within your cosmetic products that you are importing into the EU.
- Are they above 1 tonne per legal entity per year?
- If yes, where is the registration holder of the chemical based (EU or UK)?
- Is the supplier of my raw materials going to ensure compliance with EU REACH?
Regulations in Northern Ireland
The EU regulations listed in Annex II of the NI Protocol will continue to apply to NI, meaning that NI will still follow EU rules for the given legislations. The EU Cosmetics Regulation, the Registration, Evaluation and Authorisation of Chemicals (REACH) Regulation, the Classification, Labelling and Packaging (CLP) Regulation are listed in Annex II of the NI Protocol, meaning that they will continue to apply to cosmetic products or their ingredients manufactured and sold in NI. NI compliance with EU rules will be enforced by the EU Commission and the EU Court of Justice; EU institutions will also enforce issues related to customs in NI.
According to the HMRC’s Excise Notice 64, denatured alcohol contained in certain goods (such as cosmetics, perfumes, etc.) imported into the UK from third countries is currently exempt from excise duty.
The HMRC confirmed that Excise Notice 64 on the import into the UK of alcohol from third countries will automatically apply to goods coming from the EU as of the end of the Brexit transition period. This only applies to finished products and not raw materials.
- Imported denatured alcohol (as a raw material) used to make cosmetics (and other goods) needs to meet one of the UK denaturation methods to be exempt from duty. This is to provide equity for UK and non-UK suppliers of denatured alcohol. Section 5 of the Finance Act exempts denatured alcohol from excise duty so long as it meets one of the UK’s prescribed denaturation method.
- Imported goods not for human consumption, including cosmetics/perfumes/etc., made with alcohol denatured with another country’s denaturation method will be exempt from excise duty. This is provided for by section 11 of the Alcoholic Duties Act 1979.
On 2 July, the UK Government updated its advice on trading CITES-listed specimens through the UK from 1 January 2021.
The UK will continue to comply with the Convention on International Endangered Species of Wild Fauna and Flora (CITES), however trade routes may change from 1 January 2021. The above linked advice contains a list of designated points of entry and exit for CITES species, information on how to move CITES specimens from the EU to the UK, how to import CITES specimens into the UK from third countries and how to transit CITES specimens through the UK to reach the EU market.
The UK Government has produced a leaflet, which includes a checklist for preparing for CITES after 1 January 2021.
New Immigration Scheme
- the scope of the points-based system;
- salary and skills thresholds for skilled workers;
- a route for highly-skilled workers;
- reducing the overall number of lower-skilled workers;
- the visa process;
- crossing the UK border;
- engagement and outreach;
- Migration Advisory Committee analysis of a points-based system.
This system will be effective from 1 January 2021. Further guidance on employing EU citizens in the UK is available here. EU citizens living in the UK before 1 January 2021 must apply for the EU settlement scheme to continue living in the UK; the deadline for this is 30 June 2021.