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Brexit – a moving target for doing business in the UK

The transition period agreed between the EU and the UK ended on 31 December 2020. Widely overshadowed by the Covid-19 pandemic, the end of the transition period was a rather subdu...

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Date: 01/06/2021

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Alex haffner colour 2017

Alex Haffner

Partner
Jan hoppe colour 2017

Jan Hoppe

Partner
Eddie powell colour 2017

Eddie Powell

Partner

The transition period agreed between the EU and the UK ended on 31 December 2020. Widely overshadowed by the Covid-19 pandemic, the end of the transition period was a rather subdued affair. Brexit has finally happened. However, the end of the transition period has, rather than settling matters, triggered a raft of changes to a variety of commercial and regulatory laws in Great Britain (GB) (Northern Ireland being subject to a separate regime outside the scope of this note) that keep unfolding, slowly but inexorably. Brexit continues to happen and will do so for many years, if not decades, to come.

It is extremely difficult for our business clients on both sides of the Channel to keep track of the various changes and their implementation deadlines that affect their areas of trade. Our dedicated experts in Fladgate’s commercial and corporate team are highly skilled in providing reliable advice and progressive commercial solutions to our clients to overcome the many challenges that arise and continue to arise in connection with Brexit.

This note contains a brief selection of some of the most pressing and relevant issues that we have found to be of particular concern to many of our firm’s commercial clients, where change has occurred, and where further change is imminent.

Our experts are here to assist your business with the following but also with any other issues that you may face in these uncertain times.

CE marked products and the new UKCA regime

From 1 January 2021, manufactured goods must be UK Comformity Assessed (UKCA) marked to be made available on the GB market. Certain products that are lawfully CE marked will be accepted into GB until 1 January 2022. The one year transition period allows businesses to adapt to the new rules, provided that after 1 January 2022, the CE marking will not be recognised in Great Britain and products cannot be sold without a UKCA mark.

In short, it is now necessary to consider carefully whether a particular product falls within the transitional regime whereby a CE marking (such as exists) can still be relied on or not.

  • Products which can rely on CE marking until 31 December 2021: Those products where the CE marking is applied on the basis of self-declaration, a conformity assessment was carried out by an EU recognised notified body, or where a certificate of conformity held by a UK approved body has been transferred to an EU recognised body.
  • Products where a UKCA marking is required before 1 January 2022: Where the product is covered by legislation which requires the UKCA marking, requires a mandatory third party conformity assessment and such assessment has been carried out by a UK conformity assessment body.
  • Other requirements applying to CE marked products: Such products may only be placed in Great Britain whilst the EU and UK conformity requirements are the same. If the EU changes the relevant rules, a manufacturer will not be able to use any existing CE markings in the UK, even if the change occurs before 1 January 2022.

The new UK REACH regime affecting chemical substances:

The EU REACH Regulations concerning the manufacture, import or use of chemical substances into the EU/EEA were brought into UK law on 1st January 2021 as UK REACH. UK REACH is closely aligned with the existing EU regulations and notification practices.

Under UK REACH, any GB-based business intending to manufacture or import a chemical substance into GB at or above 1 tonne per year is required to submit a registration to the UK regulator, the Health and Safety Executive (HSE), for that substance. In many cases, GB-based businesses held or relied on EU REACH registrations with the European Chemicals Agency (ECHA) for this purpose. Relevant issues following Brexit include:

  • Existing EU REACH registrations: these are no longer valid for GB-based businesses. Many GB-based manufacturers of chemicals who held or relied on ECHA registrations, were able under UK REACH to have their existing registrations recognised under UK REACH (the so-called “grandfathering” process). The deadline for applications to have EU registrations “grandfathered” under UK REACH, ended on 30 April 2021. Manufacturers or importers who have not been able to grandfather existing registrations, will now have to apply for a full registration with the HSE under the UK REACH regime.

  • GB-based businesses who previously imported chemical substances into GB from the EU/EEA by relying on an existing EU REACH registration held by a third party further up the supply chain (e.g. by the manufacturer through an EU REACH Only Representative agreement for GB): These GB-based downstream users or distributors, may now be regarded as an importer of such substances under UK REACH, particularly as for the purposes of post-Brexit GB, the EU registrations no longer apply.

In particular, GB-based businesses which have previously imported substances into GB from either

- the EU/EEA under an EU REACH registration held by a third party, or

- from outside of the EU/EEA under an Only Representative Agreement held by an EU-based third party,

and who intend to continue to import such substances now that the Transition Period has ended, must now ensure that the substances they import at or above 1 tonne per year are covered by a valid UK REACH registration. For this purpose, such GB-business can submit a “Downstream User Import Notification” (DUIN) to the HSE. A DUIN can also be used by any manufacturer of substances who is based outside of GB and who intends to appoint an Only Representative in GB to notify on behalf of its GB-based importers so as to make it is easier for the manufacturer to maintain its GB distribution network.

Art. 127 E of UK REACH provides for a transitional provision relating to DUINs: If a DUIN notification is made on or before 28 October 2021 (i.e. 300 days following the end of the Transition Period), the obligation of the GB-based importer to procure a full registration with the HSE is then deferred by 2 to 6 years (depending on the quantities and properties of the substances) plus 300 days. A non-GB based manufacturer can also appoint a GB-based Only Representative to submit notifications under Art. 127E on behalf of the manufacturer’s GB-based importers.

EU Trade Marks and their application to the UK

On 1 January 2021, the UK left the EU Trade Mark (EUTM) system administered by the EU Intellectual Property Office (EUIPO). Several thousands UK and non-UK businesses have registered their brands across the EU using the EU system. Now that the UK is no longer an EU member, this begs the question as to what happens to existing EUTM registrations and applications?

  • Registered (granted) EUTMs: Provided an EUTM had reached registration at the EUIPO before 1 January 2021, a comparable UK national trade mark will have been granted automatically and at no additional cost. The comparable (or “cloned”) mark has the same legal status as a UK registered mark, and keeps the original EUTM filing date or other relevant priority/seniority dates. The UK comparable mark will need to be maintained separately to the EUTM in the future, including payment of renewal fees at the 10 year anniversaries of the original EUTM filing date. Until 1 January 2024, trademark owners will not need an address for service in the UK for this process to operate, or to carry out future renewals.
  • EUTM applications made before 1 January 2021 which have not been granted: If an EUTM application was still pending on 1 January 2021 (i.e. it had not reached registration), no automatic comparable UK right will have been granted. However, the applicant will be able to make a separate application to the UKIPO until 30 September 2021 for the same trade mark as the EUTM (i.e. for an identical sign covering identical goods and services). As for any normal UK TM application, the application will attract a filing fee, will be examined by the UKIPO and, if accepted, published for opposition by third parties. However, the application made under this special Brexit procedure will enable an applicant to retain the earlier filing date of the pending EUTM and will also be able to claim any valid international priority that is applicable to the pending EU application, along with any UK seniority claims recorded against it.

The applicant will require an address for service in the UK to make the UK application.

  • Does an owner of a EUTM need to appoint an EU representative: From 1 January 2021, UK-based or UK only qualified legal practitioners or professional representatives cannot represent parties before the EUIPO (unless the proceedings are ongoing), so EUIPO have wiped the details of any UK-based representatives. Most UK advisers have, however, made arrangements for the registrations that they represented to be taken over by an EU firm. A UK business will only need to appoint an EU representative (if this has not already happened) if there is any proceeding or issue regarding the EU registration, or upon renewal, once the registration is 10 years old.

Data protection in the UK: GDPR still applicable

Following Brexit, the UK has implemented its own version of the EU GDPR (namely the UK GDPR) which came in to effect as of 1 January 2021 under the Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019. The UK GDPR closely follows the EU GDPR and extends to non-UK organisations that carry out processing of personal data in the UK. It is notable that the UK’s supervisory authority (the Information Commissioner’s Office) has the power to fine organisations up to 4% of total worldwide turnover or £17.5 million (whichever is higher) in respect of UK GDPR breaches. The key data protection issues for EU based organisations to consider following Brexit include the following:

  • Data transfers from the EEA to the UK: The EU GDPR imposes restrictions with regards to transfers of personal data outside of the EEA to territories that have not been the subject of an “adequacy decision” for approval. The UK Government is currently seeking a European Commission (EC) ‘adequacy decision' which will allow the free flow of data from the EEA to the UK. The EU has agreed to delay transfer restrictions for at least four months (which may be extended to six months) whilst it considers whether to grant the decision. On 19 February 2021 the EC published its draft decisions under which it found the UK to be adequate. The draft decisions will now be considered by the European Data Protection Board and a committee of the 27 EU Member Governments. If the UK is not approved, it will be considered as a “third country” for EU GDPR purposes and subject to strict transfer rules.
  • Representatives: Another issue non-UK organisations must consider is whether it will be required to appoint a UK representative. Organisations located outside of the UK that offer goods or services to individuals in the UK (or which monitor the behaviour of individuals in the UK) and do not have an established office in the UK will be required to appoint a UK representative (unless the organisation is a public authority or if the processing is occasional, low risk and not involving large-scale use of special category/criminal offence data). The representative must be authorised, in writing, to act on the organisation’s behalf regarding its UK GDPR compliance, including cooperating with any supervisory authorities. The representative may be an individual or an organisation/company so long as they are established in the UK and are able to represent the organisation in respect of its UK GDPR obligations.
  • Data Protection Policies: Organisations will also need to consider the impact of the UK GDPR on their existing data protection policies, for example, privacy policies aimed at UK data subjects will need to be refreshed to include details of any transfers of personal data outside of the UK (rather than the EEA).

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