Out-Law / Your Daily Need-To-Know

Product safety in a no-deal Brexit: companies 'ill prepared'

Out-Law Analysis | 11 Mar 2019 | 1:32 pm | 5 min. read

ANALYSIS: Manufacturers, importers and distributors are ill-prepared to handle the implications of a no-deal Brexit on product safety, despite a flurry of guidance from the UK government.

A recent UK government paper on the implications for business and trade of a no-deal exit from the EU acknowledged that businesses are unprepared for this scenario. There are a number of areas of concern when it comes to product safety.

At a recent conference run by the Office of Product Safety and Standards (OPSS) it emerged that only around 15% of businesses have currently registered for a UK Economic Operator Registration and Identification number, which will be needed to continue trading with the EU after 29 March if there is a no-deal Brexit.

Businesses were also reporting that they were unable to appoint a customs agent, after government efforts to hire and train more agents have proved only partially successful.

The UK government has introduced two main pieces of legislation to amend current product safety laws if the UK leaves the EU without a deal. Medical products and food have their own specialist legislation.

The draft Product Safety and Metrology etc. (Amendment etc) (EU exit) Regulations 2019 amend a raft of sectoral product safety legislation including laws governing products such as toys, electrical products, radio equipment, pressure vessels, gas appliances, lifts, machinery.

They also amend the more General Product Safety Regulations 2005, which handle the safety of consumer products not otherwise dealt with under other sectoral legislation. These set out when a product is considered safe, what measures must be taken to ensure the product is safe and traceable, what responses are required if a product is found not to be safe and what powers the authorities have to take action.

The draft regulations also amend the Consumer Protection Act 1987 which provides a right of recourse for consumers who suffer personal injury or damage to their property caused by an unsafe product.

The second major piece of product safety legislation is the draft Construction Products (Amendments etc) (EU Exit) Regulations 2019, which set out amendments to the EU 2011 Construction Products Regulations (CPR) and to the UK 2013 CPR regulations. These laws govern the safety of products for permanent incorporation in buildings and have similar provisions to the sectoral legislation described above.

There are several changes which businesses should consider as a result of the new legislation and a no-deal Brexit.

UK distributors who import from the EU will become 'importers' with the responsibilities this brings, rather than simply being considered 'distributors'. If the UK leaves the EU without an agreement, a number of changes will take effect on 30 March.

Any products these distributors sell will need to show their name and address, although there is an 18-month dispensation period for distributors of electrical products.

This dispensation does not apply to construction products. It may not always be clear to a distributor whether a product is one or the other, for example in the case of communications cables for use in buildings, which will be considered construction products and so not benefitt from the dispensation.

Distributors of construction products or other products subject to sectoral legislation, which are now deemed importers will need to ensure that they hold certificates of compliance. They will need to ensure that a technical file, which include all the design documents and production conformity documentsis available for the authorities for a period of 10 years from the date the last product is placed on the UK market.

Distributors will also now be liable for personal injury or property damage arising from any unsafe products they supply to consumers. Until now, these distributors have been able to point the finger at the manufacturer or first importer into the EU.

Manufacturers’ duties

Manfacturers’ duties are not changing in the same way as distributors’. However they will also face issues exporting to the EU if there is a no-deal Brexit.

Many products subject to sectoral legislation have to be assessed to check that their performance complies with certain requirements to ensure their safety. Products which pass these tests generally end up with a declaration of performance and are currently CE marked and can be used throughout the UK.

In the case of a no-deal Brexit, several issues arise. For instance, some products – such as some construction products - have to be assessed by notified bodies which are approved by the EU. From 30 March none of the UK notified bodies will have the necessary EU approval, meaning that products which have been assessed and certified by UK notified bodies will no longer be able to be exported to the EU under the CE mark.

Products will need to be reassessed by an EU-recognised conformity assessment body before they are allowed to be placed on the EU market. This risks causing delay and additional compliance costs.

The UK government has published details of a new UK mark which can be applied and used in the UK. Broadly this will be available for products which have been CE-marked to date, for an undefined period.

However if the product has been assessed by an EU notified body the CE mark can be used as well or instead.

Issues for consumers

Consumers face issues too. There will be extra confusion caused by having both UK and CE marking, but what about when the product is found to be unsafe?

Previously if a UK manufacturer, importer or distributor supplied products all over the EU and a product safety issue arose, it could notify a local Trading Standards department, explaining which countries were affected and they would in turn notify the authorities in affected countries through the Rapid Alert System (Rapex).

Businesses will no longer be able to notify through Rapex. The UK government is establishing a UK-wide replacement for the system, which is meant to be ready by 30 March.

However there is no specific obligation on the UK economic operator or indeed on the UK authorities to notify the EU authorities or to take action in respects of products placed on the EU market.

Clearly a reputable UK manufacturer will want to ensure that any dangerous products which it has exported to the EU are recalled, at the very minimum for reputational reasons, but it will have to act through the first importer into the EU who will then have to do a separate notification, thus adding complexity, cost and hurdles to notifications which can only be a bad thing for consumers.

It is clear that economic operators and in particular distributors importing from the EU are unlikely to be ready if there is no deal and likely to be in breach of the law.

HM Revenue & Customs has indicated that it will not be taking a punitive approach to customs issues. While we might hope the same approach might apply to economic operators in terms of product safety and compliance, there is still the risk of increased costs, obligations and consumer exposure to unsafe products.

Louise Nahon is a product safety expert at Pinsent Masons, the law firm behind Out-Law.com