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Brexit & the Product Industry - Where are we now?

10/04/2018

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Introduction

This Article is a brief summary of recent Brexit developments in the product industry. In January 2018, the European Commission published a Notice to Stakeholders[1] (the Notice) addressing key pieces of product legislation (including the General Product Safety Directive, the Toy Safety Directive, the Cosmetics Directive and the Medical Devices Directive).

At present, the principal UK laws on product liability and safety are based on EU directives which do not have direct effect in Member States.  For example, the UK General Product Safety Regulations 2005 brought into force the EU General Product Safety Directive 2001[2] and the UK Consumer Protection Act 1987 brought into force the EU Product Liability Directive 1985[3]. Once the UK leaves the European Union on 30 March 2019, as at 00.00 CET, and subject to any transitional agreement, the EU product rules will no longer be applicable resulting in the UK losing its ability to interact in the European product industry as it currently does and thereby presenting potentially significant legal repercussions for economic operators[4].

Economic Operators

The Notice states that once the UK leaves the EU, it will become a “third country” (i.e. a country not a member of the EU). As from the withdrawal date, a manufacturer or importer established in the UK will no longer be considered as an economic operator established in the European Union. As a result, the economic operator established in the EU who, prior to the withdrawal date, was considered as an EU distributor will become an importer for the purposes of Union product legislation in relation to products from a third country that the economic operator places on the EU market from the date of withdrawal. The economic operator will then need to comply with the obligations relevant to an importer, which are different from those of a distributor.

Authorised Representatives/Responsible Persons

Specific legislation requires an authorised representative for certain products (e.g. medical device legislation) or a responsible person for others (e.g. cosmetic products) to be established in the EU. The Notice states that authorised representatives or responsible persons established in the UK will not, from the withdrawal date, be recognised as authorised representatives or responsible persons for the purposes of the specific EU product legislation. This means that manufacturers need to take steps to ensure that from the withdrawal date, their designated authorised representatives or responsible persons are established in a Member State.

Notified Bodies

Some product areas (e.g. medical devices) require the intervention of a qualified third party, known as a Notified Body, in the conformity assessment procedure.  Under EU product legislation, Notified Bodies are required to be established in a Member State and be designated by a Member State notifying authority for performing the conformity assessment tasks set out in applicable legislation.  From the withdrawal date, UK Notified Bodies will lose their status as EU Notified Bodies and will be removed from the Commission’s information system on notified organisations (Nando) and they will not be in a position to perform conformity assessment tasks pursuant to EU product legislation from the withdrawal date.

When an applicable conformity assessment procedure requires or provides for the possibility of third party intervention, a certificate delivered by a body recognised as an EU Notified Body at the time of the placing that product on the market will be required for products placed on the market from the withdrawal date.  Therefore, it will be necessary for economic operators to take steps to ensure that they will hold certificates issued by a Notified Body in a Member State of the EU, to demonstrate compliance for their products placed on the market as from the withdrawal date. For economic operators who hold certificates issued by a UK Notified Body prior to the withdrawal date and plan to continue placing the product on the EU market from the withdrawal date, the Notice advises to consider either applying for a new certificate issued by an EU Notified Body or to arrange for a transfer, on the basis of a contractual arrangement between the manufacturer, the UK Notified Body and the EU Notified Body, of the file and corresponding certificate from the UK Notified Body to an EU Notified Body which would then take over the responsibility for that certificate.

The rationale behind why a certificate issued by a body governed by EU at the time of issuance should cease to be valid subsequently when the Notified Body loses its status is unclear. However, this will be unwelcomed news to economic operators in the UK.

Draft Withdrawal Agreement

It should be noted that the position set out in the Notice is subject to any transitional agreement reached in the interim. In this regard, a revised version of the Draft Withdrawal Agreement[5] was published on 19 March 2019 which makes provision for dealing with goods on the EU market during the transitional period (currently from the date the agreement comes into force until 31 December 2020)[6]. In summary, the current version of the Draft Withdrawal Agreement provides for the following (agreed by negotiators) in relation to goods:

  • Article 37 provides that any specific goods lawfully placed on the UK or EU market before the end of the transition period may continue to be made available and circulate between the two markets until they reach their end user.
  • Article 38 states that where an economic operator relies on Article 37 with respect to a specific good, that operator shall bear the burden of proof of demonstrating, on the basis of any relevant document, that the good was placed on the EU market or the UK market before the end of the transition period.
  • Article 39 states that surveillance authorities for Member States and the UK shall exchange information regarding goods placed on the market before the end of the transition period.
  • Article 40 provides for the transfer of files/documents relating to any assessments, approvals and authorisations of medicinal products, veterinary products, biocidal product or plant varieties that are led by a UK competent authority and are ongoing before the entry into force of the Agreement must be transferred by the UK to a designated competent authority of a Member State.
  • Article 41 provides that the UK shall make available the marketing authorisation application dossiers of medicinal products authorised by the UK competent authorities before the end of the transition period if requested by a Member State or the EMA and if the information is necessary for the assessment of the marketing authorisation (and vice versa).
  • Article 42 (which has not yet been agreed by negotiators) relates to information held by Notified Bodies. The Commission has stated that on request of the certificate holder, a conformity assessment body established in the UK shall make available information held in relation to its activities as a Notified Body carried out before the end of the transition period to a Notified Body established in a Member State and vice versa (i.e. a Notified Body in a Member State shall make information available to a UK based Notified Body).

Of course, the above positions set out in the Draft Withdrawal Agreement may be subject to change pending final agreement and unfortunately economic operators will have to continue to deal with much uncertainty in the interim.

For a further discussion of the draft Withdrawal Agreement in relation to the Life Sciences sector please see here.


[2] Directive 2001/95/EC

[3] Directive 85/374/EEC

[4] An “economic operator” is defined as the manufacturer, the importer, the distributor and/or the authorised representative. 

[6] While the Draft Withdrawal Agreement deals with the regulatory issues surrounding goods on the EU market, it does not seek to address any product liability issues.

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