On 28 October, the EU Commission published its decision to accept the request from the UK to further extend Article 50 until 31 January 2020. The withdrawal can take place earlier on 1 December 2019 or 1 January 2020, if the withdrawal agreement is ratified by both parties.
The latest extension moves the risk for a ‘no deal’ Brexit happening to 31 January 2020, as the Benn Act legislated against ‘no deal’ only for the 31 October deadline. Companies are therefore still advised to prepare for a ‘no deal’ Brexit, as it is still a possibility with direct consequences to businesses.
The differences between a 'no deal' scenario or a scenario where a Withdrawal Agreement is in place are explained in the below table.
When the UK leaves the EU, it also leaves the European Economic Area (EEA), the Customs Union and the FTAs (Free Trade Agreement) that Europe has in place with third countries. This will have consequences on customs, tariffs, movement of people, regulations.
It is still unclear which scenario will apply. Although, companies are reminded that 'no deal' is the only default possible outcome therefore companies should prepare for the worst-case scenario.
The UK Government issued a series of Technical Notices to help businesses understand how they will be impacted by a 'no deal' Brexit. In addition to the Technical Notices, the UK Government has launched its EU Exit public information campaign which also includes a specific section for businesses, aiming to raise awareness of, and directs businesses to gov.uk/euexit content that will help them prepare for the UK leaving the EU.
The EU Commission also issued a series of Technical Notices to help businesses understand how they will be impacted by a 'no deal' Brexit.
'No Deal' Contingency Planning
Watch our webinar 'Brexit - What to do now'.
The EU published a specific Technical Notice on cosmetics to inform companies how to prepare for a 'no deal' Brexit. The technical notice clearly states that UK companies who want to continue selling cosmetic products in the EU will need to comply with the EU Cosmetics Regulation after Brexit.
The UK Cosmetics Regulation Statutory Instrument (SI), which is part of the Product Safety & Metrology etc (Amendment etc) (EU Exit) Regulations 2019, was finally debated in the House of Commons on 12 March and passed in Parliament on 20 March. The SI will therefore come into force on Exit day in the event of a 'no deal' Brexit. More information on the key actions to take can be found in our public news.
The UK Government has also published a guidance document outlining the changes in regard to product safety across the different sectors included in the Product Safety and Metrology etc (Amendment etc) (EU Exit) Regulations 2019. The guidance will also apply from Exit day in the event of a 'no deal' Brexit.
The Office for Product Safety and Standards (OPSS) has published guidance to help companies understand how the UK Cosmetics Regulation (Product Safety and Metrology etc. (Amendment etc.) (EU Exit) Regulations 2019) will apply to cosmetic products sold on the UK market if there is a ‘no deal’ Brexit.
CTPA has also published specific advice for current distributors of cosmetic products between the UK and the EU.
For more information on which actions need to be taken for customs, VAT and excise goods, see our public news.
HM Revenue and Customs (HMRC) has written letters to VAT-registered businesses across the UK to explain changes to customs, excise and VAT in the event that the UK leaves the EU without a deal, and what businesses can do to prepare.
The EU Commission also published a notice for 'no deal' preparations on this topic, which can be viewed here. Additional information can also be found in the EU Commission Brexit Customs Guide for businesses.
Customs arrangements at the Irish borders
In the event of a 'no deal' Brexit, the UK Government would temporarily hold off introducing any checks or controls on almost all goods crossing from Ireland to Northern Ireland, so there will be no need for customs declarations, nor the payment of duty. Therefore, the above mentioned UK temporary import tariff would not apply to goods crossing from Ireland into Northern Ireland.
The UK Government would only apply a small number of measures strictly necessary to comply with international legal obligations, protect the biosecurity of Ireland, or to avoid the highest risks to Northern Ireland businesses.
For more information and details of specific changes proposed, please click here.
Guidance from French customs authorities
The French Customs and Excise authority has published customs guidance to help businesses that move goods between the UKâ€¯and France to prepare for new customs procedures in the event of a 'no deal' Brexit. In practical terms, this means border controls will resume and the free movement of capital, goods, services and people will stop. In order to benefit from the automated border crossing from 30 March, you must prepare your customs declarations before checking-in your goods at the ports of Calais, Dunkirk or at the Channel Tunnel.
World Trade Organisation (WTO) rules will apply for goods moving from the UK into the EU, may impact both finished products and raw materials. You can consult the Market Access Database to check the customs codes of the product categories that may be affected.
The UK Government published on 13 March details of the UK's temporary tariff regime that will be in place in the event of a 'no deal' Brexit. The regime would be temporary as it would apply from 29 March for up to 12 months, while a full consultation and review on a permanent approach to tariffs is undertaken. Businesses would not pay customs duties on the majority of goods when importing into the UK, if it leaves the EU without a deal. To find out what the new rates applicable in the event of a 'no deal' Brexit would be, please consult the UK Trade Tariff tool.
The UK will not benefit from any FTA that the EU has in place with third countries.
Goods on the market
The EU Commission published a Q&A on industrial products, explaining how goods placed on the EU market before Exit day will be impacted.
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.
Placing manufactured goods on the UK or EU markets ('new approach' goods, 'old approach' goods and non-harmonised goods)
The UK Government published additional guidance for businesses who are placing manufactured goods on the UK or EU markets, also explaining the different arrangements for goods placed on the market before Exit day and goods placed on the market after Exit day. Members are reminded that there are specific provisions in both the UK (within the UK Cosmetics Regulation Statutory Instrument) and the EU for cosmetic products.
The UK REACH Statutory Instrument (SI) was debated in the House of Lords on 26 March and was passed by 214 votes to 202. The UK REACH SI can be viewed here. For more information on the impact of 'no deal' Brexit on REACH, please view the CTPA Factsheet on the UK REACH proposal. The UK Government 'no deal' technical notice on UK REACH can be viewed here.
Under the new UK REACH SI companies will have specific actions to take and may change their role vs EU REACH and therefore their obligations.
More information can also be found on the European Chemicals Agency (ECHA) Brexit page, which includes helpful Q&As, videos and guidance.
The Department for the Environment, Food and Rural Affairs (Defra) has published, on 3 April, the REACH etc. (Amendment etc.) (EU Exit) (No.2) Regulation 2019, which amends the previously approved UK REACH SI. The obligation for downstream users (DU) or distributors to carry out the import notification within 180 days from Exit day and the information that has to be submitted have not changed. However, this amending SI adds provisions to allow EU-based suppliers of substances imported into the UK to appoint Only Representatives (OR) in the UK to carry out the import notification of that substance, removing the obligation from DUs and distributors. If the supplier does not appoint the OR to carry out the import notification then the DU or distributor has to do it.
The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) is an international agreement with the aim of ensuring that international trade in specimens of wild animals and plants does not threaten their survival. The UK is a signatory to CITES in its own right. Therefore, CITES requirements will continue to apply after the UK leaves the EU. In the EU, CITES is implemented via the EU Wildlife Trade Regulations, which set requirements for trade in certain species within, to and from the EU and the rest of the world. Currently, this means that movement of CITES-controlled goods can occur between the UK and EU without the need for permits. Following the UK's exit from the EU, movement of all species controlled under CITES between the UK and the EU will no longer take place freely. Import, export and re-export permits will be required. For more information see our public news.
Impact of 'No Deal' on GDPR
In the event of a 'no deal' Brexit, UK companies need to ensure they continue to comply with GDPR.
The below resources might be helpful when considering how your data flows could be impacted:
- the Government Technical Notice highlights what companies need to do in the event of a no-deal;
- the Information Commissioner's Office (ICO) has a section on Data Protection and Brexit including a six step guidance checklist;
- the ICO has also produced an interactive tool to help companies decide whether Standard Contractual Clauses are a suitable safeguard for their international data transfers.
Impact of 'No Deal' on trading in drug precursor chemicals
Drug precursors are chemicals that can be used in the illicit manufacture of narcotic drugs. They also have legitimate commercial uses and are legally used in a wide variety of industrial processes, such as medicines, flavourings and fragrances.
In the event of a 'no deal' Brexit, companies handling and trading in drug precursor chemicals with EU countries will need the same licences and registration that are currently needed to trade with non-EU countries to be able to continue trading with the EU. More information can be found in the 'no deal' technical notice for this topic. A full list of current drug precursor chemical import or export licensing requirements can be found on the chart of precursor chemicals.
To apply for an import or export licence to trade with the EU, a domestic licence is needed and this can take up to 12-16 weeks to process. Operators wishing to import or export drug precursor chemicals after Brexit should consider applying now for a domestic licence and can register here. Labelling requests and any subsequent application as a 'proactive application in the event of a Brexit no deal' will help the Home Office process applications as soon as possible.
Once a domestic licence is obtained, operators will then be able to apply for import or export licences on the National Drugs Control System; it will only be possible to apply for licences to trade with the EU after the UK left the EU with 'no deal'. Go to gov.uk for further information and guidance on how to apply.
The Health and Safety Executive (HSE) has published guidance on the export and import of hazardous chemicals if there's no Brexit deal which covers further guidance on trading in chemicals.
Impact of 'No Deal' on CE mark
In the event of a 'no deal' Brexit, companies will still be able to use the CE marking to demonstrate compliance with the legal requirements and to sell products on the UK market after Exit day. However, companies may need to apply the new UKCA marking to products being sold in the UK. The majority of products which are currently covered by the CE marking will fall within scope of the new UKCA marking.
The UKCA marking will not be recognised on the EU market, and products currently requiring a CE marking will continue to require a CE marking for sale in the EU.
More information can be found in the 'no deal' technical notice issued by the UK Government.
The UK Government also issued guidance to help businesses understand how intellectual property (IP) will be affected by a 'no deal' Brexit.
Providing services to EU and EEA countries
In the event of a 'no deal' Brexit, UK businesses will no longer operate under European Economic Area (EEA) regulations for the cross-border trade of services. This means that UK businesses and professionals providing services in the EEA (including all EU Member States, plus Iceland, Liechtenstein and Norway) will be regarded as originating from a 'third country', which may result in additional legal, regulatory and administrative barriers.
More information can be found here.
Finished Cosmetics Manufacturer
Raw Material Supplier