Late in the afternoon of 24 December 2020, the UK government and the EU Commission announced that the UK and EU had agreed the terms of a post-Brexit Free Trade Deal. The text of the Agreement was published later the same day. The media (and social media in particular) are already myth-ridden. Here, we consider and bust 3 of the most common.
Myth 1: Because there is a deal, there is no duty on goods which have a UK origin being imported into the EU from the UK.
It depends on what is meant by “origin”.
There is no duty on goods which have a UK origin being imported into the EU from the UK as a result of the free trade agreement. But where goods come from a third country (e.g. PRC) or comprise components from a third country, there can be duty.
Whether there is duty and the amount will depend on:
- what arrangements (if any) exist between the UK/EU and the third country from where the goods have come
- the type of product.
Subject to the above for goods which are being imported into the EU and which originate outside the UK to be free of duty it will be necessary that the goods have been substantially transformed in line with the relevant Product-Specific Rule. See The Trade and Cooperation Agreement: detailed guidance on the rules of origin.
Myth 2: Because there is a deal, there will be no change in respect of the role of my EU-based distributor. My business, being the manufacturer, will remain the importer of the goods for the purpose of EU law.
Your EU-based distributor will become the importer in the EU from 1 January 2021. Legally, they will have to:
- label the goods with their address and your details or and the details of those of your EU, EEA or Northern-Ireland-based authorised representative (UK-based authorised representatives will no longer be recognised in the EU!)
- ensure required conformity assessment procedures have been completed and that the correct conformity markings are shown on the goods
- show that your technical documentation and labelling of the goods comply with requirements
- maintain a copy of the declaration of conformity for a period of 10 years
- ensure that goods conform with the relevant essential requirements.
How this will impact you depends on what is said in your distribution contract – it is unlikely that your distributor is contractually obliged to take the above steps. As such, will your distributor come to you seeking additional costs to do so?
Myth 3: Goods that conform with UK rules can be placed on the Northern Ireland market.
Only if those goods meet EU rules.
Northern Ireland’s rules on placing products on to the market align with those rules of the EU. There are to be no additional approvals required for Northern Ireland businesses to place their own products on the rest of the UK market. However, if you are a Northern Ireland business selling goods on the rest of the UK market which have been supplied to you from the EU, you will become the importer under GB rules and must:
- label the goods with your details, including your name and address
- ensure required conformity assessment procedures have been completed and that the correct conformity markings (which will be the EU conformity markings) are shown on the goods
- show the technical documentation of the manufacturer has been drawn up
- ensure goods conform with the relevant essential requirements. These could be EU requirements which the Northern Ireland Protocol applies to Northern Ireland
- withdraw or recall products that are unsafe.
If you have any questions about these issues in relation to your own organisation, please contact a member of the team or speak to your usual Fox Williams contact.
Click here to read more myth busters relating to the EU / UK trade agreement.