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Implications of a

‘No Deal’ Exit from the EU

Members’ Guidance Pack

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Implications of a ‘No Deal’ EU Exit Overview

Uncertainty prevails around the UK’s terms of exit from the EU.

This document highlights:

- a number of ‘No Deal’ implications which are particularly relevant to members

- key recommendations to help mitigate associated commercial risks.

Brexit may affect your whole

business and supply chain

Government has set out a

series of resources,

including Advice Notes and a

Readiness Report for

businesses to consider.

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Implications of ‘No Deal’ EU Exit Contents / hyperlinks

Import / Export of goods Energy

Tariffs (and anti-dumping)Carbon Pricing &

Emissions Trading

REACH

Employing EU citizens Food Contact

Regulations & Standards Intellectual property

Data protection EU funding

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Implications of a ‘No Deal’ EU Exit Export of goods

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The frictionless trade we have enjoyed with the rest of the EU will

fundamentally change if the UK becomes a ‘third country’

Exporters to the EU will immediately face changes to

customs procedures, which the Government have done very

little to ease. Exporters will need to:

• decide who will make the customs declarations

• make sure your business has a GB EORI number

(Economic Operators Registration and Identification)

and the importers you work with have an EU EORI

number

• consider whether transporting using the Common

Transit Convention rules will benefit your business?

• familiarise yourself with the new VAT rules for

exporting to the EU

57% of ceramic

exports go to the EU

The situation with IRELAND

is far from clear but

indications suggest that

are that there will not be

any new checks or

controls on goods entering

the Republic of Ireland

from Northern Ireland at

the border. This will,

however, not last forever,

and over time both the EU

and the Irish government

have said that they will be

legally bound to reintroduce

checks.

GOVERNMENT

ADVICE

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Implications of a ‘No Deal’ EU Exit Export tariffs

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The frictionless trade we have enjoyed with the rest of the EU will

fundamentally change if the UK becomes a ‘third country’

57% of ceramics are exported to the EU, and will have an ‘EU third country’ tariff.

Some examples are below but you must check the EU import, customs and tariff rules.

Products (code) EU ‘third country’

Tariff at time of

writing

Ceramic tableware (6912) 5-9%

Porcelain or china tableware (6911) 12%

Refractory bricks, blocks, tile (6902) 2%

Other refractory ceramic goods (6903) 5%

Technical ceramics (6909) 5%

Sanitaryware (6910) 7%

Tiles (6907) 5%

Government have new trade agreements that will be in place if there's a no-deal

Brexit. These include South Korea and Switzerland and replace some, but not all of

the current EU agreements

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Implications of a ‘No Deal’ EU Exit Import of goods from the EU

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The frictionless trade we have enjoyed with the rest of the EU will

fundamentally change if the UK becomes a ‘third country’

It’s likely that there won’t be many substantial legal changes

to imports from the EU as the Government has said that it

will prioritise the flow of goods at the border over revenue

collection or safety and security.

However disruption for supply chains is a serious risk and

importers will need an EORI number, to decide who will make

the import declarations and look into the new import VAT

rules. The Government have put several easements in place.

Importers can:

• apply to use 'transitional simplified procedures'

• consider what other customs procedures you could use

(e.g. Common Transit Convention)

• set up a duty deferment account to delay paying most

customs charges if you import regularly (we have heard a

positive report that that is quick and free)

The Government will

not introduce new

checks or controls on

goods entering

Northern Ireland from

the Republic of

Ireland for nearly all

goods but

dual-use goods will

require licences GOVERNMENT

ADVICE

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Implications of a ‘No Deal’ EU Exit Import tariffs (and anti-dumping)

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The frictionless trade we have enjoyed with the rest of the EU will

fundamentally change if the UK becomes a ‘third country’

The Government will implement a temporary import tariff regime which will

mean that 88% of imports to the UK would get zero tariff access to the UK

market for 12 months.

All import tariffs will be reviewed in this first year after a no deal Brexit.

For tiles and some tableware which have had EU anti-dumping tariffs, these

imports will NOT be given zero tariff access to the UK and the current EU

import tariff will be rolled over, for now unless there is a trade

agreement in place.

For tiles and tableware ceramics imported from China with anti- dumping

tariffs, Government has also agreed to keep these in place, for now. These

will be reviewed around the time the EU expiry review is planned.

Government has put in place some trade remedy advice

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Implications of a ‘No Deal’ EU Exit Employing EU Citizens

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Government has asked businesses for help to encourage the 3.5 million EU citizens to

apply to the EU Settlement Scheme

The recent Queen’s speech highlighted Home Office figures on the take up of the EU

Settlement Scheme, showing that by the end of September, more than 1.7 million people had

applied and almost 1.5 million people had been granted ‘status’ under UK law.

We understand many have been given ‘presettled’ rather than ‘settled’ status. Presettled is for

people resident in the UK for less than 5 years.

• If we leave with a deal, citizens need to apply by 30 June 2021.

• If we leave without a deal, citizens need to apply by 31 December 2020 and be resident

by the day we leave.

EU citizens arriving between 1 Nov 2019 and 31 Dec 2020 will be able to apply for European

Temporary Leave to Remain (Euro TLR) immigration status. This is a 36 month temporary

immigration status, after which individuals will need to apply to the new immigration system -

which is due to come into operation from 2021.

Government info on

the EU settlement

scheme

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Implications of a ‘No Deal’ EU Exit Employing EU Citizens

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EU Settlement Scheme

Employers SHOULD…

• Continue to carry out current right to work checks on EU, EEA and Swiss citizens as now.

• Continue to accept EU, EEA and Swiss passports/national identity cards as evidence of

right to work.

• However, those who have a digital status may choose to rely on that status by using the

online service, but it is not mandatory for them to do so.

• Signpost the information government is providing to your employees.

• Using the toolkit materials developed to increase awareness of the scheme among your EU

citizen employees.

Employers SHOULD NOT…

• Monitor whether staff have applied to the scheme or make retrospective status checks on

current EU employees - you are not required to do so.

• Discriminate against EU citizens in light of the UK’s decision to leave the EU as both a

prospective and current employer.

• Feel obliged to interpret information for employees provided by the government or provide

immigration advice.

Government’s EU

settlement scheme

employer toolkit

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Implications of a ‘No Deal’ EU Exit

Regulation, Testing & Standards of goods

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Guidance points on Construction Product Regulation testing that may help the ceramics sector to

cope with a no deal Brexit:

• Specific guidance on Construction Product Regulations can be found here.

• Check if any of your CE marked products require third party test reports to support the CE

mark.

• For CE marked products requiring third party testing by a notified test house or notified

certification body check if the notified body that issued the reports is based in the UK or the EU.

• If the notified body is UK based ask them what their plans are for both testing in the future and

for the reissue of existing reports.

Example: Lucideon has made alternative arrangements for its Notified Body work for the

Construction industry, these will come in to play if there is a no deal Brexit. See actions taken by

Lucideon.

• For products requiring third party testing check if the UK based test house will be able to provide

support for UKCA marking for products to be placed on the UK market.

• UKCA is the replacement mark for placing products on the UK market.

• Check the EU NANDO website for Notified Bodies both in the UK and in the EU.

• Following Brexit the UK government will create a list of recognised UK based test houses that

can support your need for UKCA marking, check the UK notifications service for advice and the

web address of the list.

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Implications of a ‘No Deal’ EU Exit Data protection

UK data protection requirements won’t change as a result of Brexit,

but interaction with EU companies / customers could be affected

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Implications of a ‘No Deal’ EU Exit Data protection

The UK becoming a third country could affect incoming data

(greater risks information no longer received)

Companies can assess / put steps in place (see overleaf)

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Implications of ‘No Deal’ EU Exit Data protection - recommendations

To ensure data flows remain unaffected, members are particularly

encouraged to get standard contract clauses in place - see: ICO website

Specific data exchanges to consider…

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Implications of a ‘No Deal’ EU Exit Energy

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Implications of a ‘No Deal’ EU Exit Energy

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Implications of a ‘No Deal’ EU Exit Energy

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Implications of a ‘No Deal’ EU Exit Carbon Pricing & Emissions Trading for those in EU ETS or small emitter scheme

HMRC CET Technical Notice

HMRC CET Policy Paper

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Implications of a ‘No Deal’ EU Exit Carbon Pricing & Emissions Trading

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Simon Watson

+44 7920 820 644

simon.watson@redshaw

advisors.com

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Implications of a ‘No Deal’ EU Exit REACH

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A UK REACH system is introduced, meaning:

- UK REACH IT system replaces the EU system.

- Downstream users importing from EU / EEA become importers, UK

notification then registration as importer required.

- Downstream users of a REACH authorisation held by EU / EEA

company can continue as long as HSE are notified within 60 days.

- UK-based importer / distributor sourced from outside the EU / EEA

have to hold registration, EU are carried over.

- UK-based REACH registrant carried over to UK REACH, with initial

information in 60 days and technical within 2-years.

- Long-term alignment with EU REACH may or may not continue.

Further information is available: HSE website

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Implications of a ‘No Deal’ EU Exit Food Contact

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Importing and Exporting Food Contact Materials (1)

The Food Standards Agency has information on its website on preparing your business for the UK leaving the EU.

There is also wider Government advice on www.gov.uk/euexit including the ‘Getting ready for Brexit guidance’.

When importing food contact items such as tableware into the UK and exporting them to Europe, there are a number of

regulatory requirements that must be met. In the event of a deal being in place when the UK exits, companies should be

able to continue operating as usual. During the transition period, there will be the opportunity to review and amend the

new statutory instrument The Materials and Articles in Contact with Food (Amendment) (EU Exit) Regulations 2019.

Until the UK officially exits the EU, the relevant EU Regulations and Directives will continue to be directly applicable

In the event of a no-deal Brexit, the new statutory instrument (as above) will come into force straight away. Companies

should be able to operate as they are currently, however, as the UK may be classed as a ‘third country’, Declaration of

Compliance (DoC) requirements may change, as outlined on the following slide.

All companies are advised to familiarise themselves with the differences between the Materials and Articles in Contact

with Food (Amendment) (EU Exit) Regulations 2019 and the current Materials and Articles in Contact with Food

(England) Regulations 2012. An analysis of the difference between the two documents has been carried out by BCC.

For further information, contact Lauren Darby.

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Implications of a ‘No Deal’ EU Exit Food Contact

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Importing and Exporting Food Contact Materials (2)Question 1:

A company manufactures ceramic tableware in the UK. Products are tested by a UK competent authority and an

authorisation dossier (including a DoC) is provided by the UK competent authority, allowing export to the

EU. Post Brexit, will the dossier / DoC have to be provided by an EU based competent authority?

In a no deal scenario, the UK would be classed as a third country with no transitional measures in place after 31 October.

Although it is not anticipated that the EU will deviate from how they currently observe UK standards of testing immediately

after this date, there may become a requirement for an EU-27 member state to carry out such testing. It is important that

operators make provisions to ensure that the export of ceramic articles meet the necessary EU requirements to avoid

disruption to current trade (from the perspective of a third country importing to the EU).

According to Annex III of the ceramics directive 84/500/EEC, the current EU requirements are that a DoC requires the

identity and address of the company which manufactures the finished ceramic article and of the importer who imports it into

the Community. If exporting to the EU after 31 October, the importer in the EU-27 Member State (as in the EU community)

would be required to produce a DoC.

Please note: BCC is waiting for confirmation of the European Commission’s confirmed position regarding whether products

being imported into the EU would require an EU-based address. Industry intelligence suggests that some EU companies

are already requiring this.

Question 2:

Would product from the EU into the UK require a UK competent body to test or would an EU bodies test be

acceptable?

In the event of no-deal, it would be expected that products arriving from other countries including the EU will need to satisfy

the requirements of UK legislation from the time of exit. If a deal is agreed, it should be noted that the final position

regarding equivalence between the UK and the EU standards has yet to be fully determined.

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Implications of a ‘No Deal’ EU Exit Intellectual Property

Many designs and products will stay protected but we should

expect changes in the long term• EU Trade Marks (EUTM) will continue to be valid in the EU but they will no longer

protect trade marks in the UK. The UK will create a comparable UK trade mark for all

products with an existing EUTM.

• Registered Community Designs and unregistered protection for designs will also be

protected by an automatic UK right.

• The UK’s involvement in most international protection systems will be maintained as

will involvement in the European Patent Convention and the Unified Patent Court.

Many of these frameworks will not be fully complete and there will likely be changes in the

long term. Intellectual Property cooperation between the UK and EU will need to be

negotiated.

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Government Advice:

Copyright

Trade marks

Designs

Patents

Exhaustion of IP rights

Legislation

Supplementary protection certificate law

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Implications of a ‘No Deal’ EU Exit EU Funding

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Continued participation in Horizon 2020:

• The UK should be able to participate in Horizon 2020 as a non-EU (third)

country if we leave the EU without a deal.

• Third countries can bid into, participate in and lead the majority of Horizon

2020 projects, but cannot access some schemes.

Funding:

• Horizon 2020 Guarantee - covers all ongoing grants and successful bids

submitted before EU Exit, even if the outcome isn’t known until after EU Exit.

Funding is guaranteed by the UK Government for the lifetime of the project.

You must register any grants you hold on the UKRI portal.

• Horizon 2020 Guarantee Extension - covers all successful bids to calls open

to third countries submitted after EU Exit but before the end of 2020. The UK

Government has committed to provide funding for the lifetime of the projects.

H2020 Technical Notice

UKRI EU Exit web content

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Implications of a ‘No Deal’ EU Exit BCC contacts

Contact the BCC

team if you have any

further questions…

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