BREXIT in BRIEF – A time of transition
In this period of COVID-19 emergency, we need to begin to prepare for the future. With regard to all the potential changes linked to Brexit, it is time for a little clarity for service providers.
On 1st February 2020, the UK withdrew from the European Union, becoming a so-called “third country”. The withdrawal agreement provides for a transition period that will end on 31st December 2020. Until that date, EU legislation is still applicable to the UK.
During the transition period, the EU and the UK will negotiate an agreement on a new partnership, in particular a free trade area. However, it is not certain whether this agreement will be arrived at or will come into force at the end of the transition period. That being said, such an agreement would, in terms of market access conditions, change the way the UK deals with the internal market, the EU customs union and VAT and excise duties.
Therefore, all stakeholders, in particular service providers, contractors and suppliers, must assess their legal situation at the end of the transition period.
A supplier based in the EU who, before the end of the transition period, was considered an EU supplier of products received from the UK, will become an importer for the purposes of EU product legislation. Such suppliers will have to comply with the obligations applicable to an importer, in particular with regard to the verification of product compliance and, where applicable, indication of its contact details on the product label or the product itself.
At the end of the transition period, UK-based notified bodies will lose their status as EU notified bodies and will be removed from the EC’s database of such (NANDO database). Therefore, UK-based notified bodies will not be able to carry out compliance assessment under EU product legislation.
Hence, it will be necessary for business operators with certificates issued by a UK-based notified body to apply for a new one, issued by an EU notified body, or arrange a transfer of the corresponding documentation and certificate to an EU notified body, which would then take responsibility for that certificate.
Article 41 of the Withdrawal Agreement stipulates that an existing and legally identifiable good that is placed on the market in the EU or the UK before the end of the transition period can be further made available on the EU or UK market and circulate between these two markets until it reaches an end user. Where required by applicable provisions of EU law, such a good can also be put into service in the EU or the UK.
The notion of market entry applies to individual products. As a result, this provision will only apply to individual products that have been placed on the market in the EU or the UK before the end of the transition period, but not to the general type or series of products.
Suppliers who rely on this provision have the burden of proving, via appropriate documentation, that the asset was placed on the market in the EU or the UK before the end of the transition period. This evidence can be provided on the basis of documents used in normal business transactions.
For the purposes of these provisions, it is stated that, “making available on the market” means any supply of a good for distribution, consumption or use on the market in the course of a commercial activity, whether in return for payment or free of charge. “Putting into service” means the first use of a good within the Union or the United Kingdom by the end user for the purposes for which it was intended or, in the case of marine equipment, placing on board.
In contrast, the following situations are not defined as “making available on the market”:
- Pre-ordered products that have not yet been produced
- Contracts for the supply of fungible goods (e.g., X number of product Y, not individually identifiable)
- Goods already manufactured that form part of a manufacturer’s stock, but have not
yet been provided for distribution, consumption or use
- Generic sales of an online product (only after an order has been placed and confirmed by a customer; the specific good purchased and ready to ship is considered to have been placed on the market).
Source: Official website of the European Union
