26 Nov 2018 Withdrawal Agreement (EU-UK Brexit/FTA)

UPDATE(2) : the UK Government published Legal Position on the Withdrawal Agreement is here.

UPDATE : the UK Parliament vote is 11th December, after five days of debate.

Following political agreement between the parties, the EU-UK Withdrawal Agreement (and accompanying Political Declaration) is laid before the UK Parliament – here.

I have posted before about these documents, and the next steps.

In the event that the Withdrawal Agreement (with its accompanying Political Declaration) is not agreed by the UK Parliament, a period of 21 days is set out in existing law for the UK Government to present its plan, a further 7 days is provided for the UK Parliament to consider that plan.

It is expected the UK Parliament will vote on 12th December 2018.

From the start of 2019 the UK Parliament will sit 5 days a week.

Please continue to follow this Blog.

Montreal Protocol – Kigali Amendment (International Law)

The Montreal Protocol on Substances that Deplete the Ozone Layer is a Protocol to the UNEP Vienna Convention for the Protection of the Ozone Layer. The Montreal Protocol is in force, sufficient states have ratified. In the EU bloc, the Montreal Protocol is given effect by an existing EU Regulation on Ozone Depleting Substances. In addition, a separate EU Regulation regulates Fluorinated Greenhouse Gases (F-gases).

The Kigali Amendment is specifically focussed on the global phasedown of hydrofluorocarbons (HFCs) – powerful greenhouse gases. HFCs account for 85% of present F-gas supply. UNEP has a FAQ here.

HFCs, used mainly in refrigeration, air conditioning and heat pump equipment, are thousands of times more harmful to the climate than CO2. In response to the rapid growth of HFC emissions, the 197 parties to the Montreal Protocol adopted the Kigali Amendment in 2016 to reduce gradually their global production and consumption.

The EU has been phasing down HFCs since 2015 (and has a separate EU Regulation on the matter). EU Member States are in the process of ratifying the Kigali Amendment individually.

All 197 Montreal Protocol parties agreed to take steps to gradually reduce the production and use of HFCs. The first reduction step to be taken by the EU and other developed countries is required in 2019, while most developing countries will start their phasedown in 2024.

The Kigali Amendment will enter into force on 1 January 2019.

Montreal Protocol parties continue to ratify the Amendment, which has so far been ratified by 60 parties. The parties, listed alphabetically, are: Austria, Australia, Barbados, Belgium, Benin, Bulgaria, Burkina Faso, Canada, Chile, Comoros, Costa Rica, Côte d’Ivoire, Czech Republic, Democratic People’s Republic of Korea, Ecuador, Estonia, European Union, Finland, France, Gabon, Germany, Greece, Grenada, Guinea Bissau, Hungary, Ireland, Kiribati, Lao People’s Democratic Republic, Latvia, Lithuania, Luxembourg, Malawi, Maldives, Mali, Marshall Islands, Mexico, Micronesia (Federated States of), Netherlands, Niger, Niue, Norway, Palau, Panama, Paraguay, Portugal, Rwanda, Samoa, Senegal, Slovakia, Sri Lanka, Sweden, Switzerland, Togo, Tonga, Trinidad and Tobago, Tuvalu, Uganda, United Kingdom of Great Britain and Northern Ireland, Uruguay, Vanuatu.

A useful assessment of the EU F-gas regulation dating March 2018 is here.

This highlights the further changes mandated by the Kigali Amendment to implement a HFC licensing system.

BREXIT : the UK has ratified the Kigali Amendment

US : the US has not yet ratified the Kigali Amendment

China : China has not yet ratified the Kigali Amendment

A useful assessment of the US and China current state is here. (Source – here)

Grants for Customs Declarations (Brexit)

The UK Government has today announced grants for companies and individuals carrying out customs declarations, the details are here.

– Up to £750 for each employee receiving training

– Up to €200,000 for new software (the maximum under EU state aid rules)

PricewaterhouseCoopers (PwC) is administering the grants for HMRC.

More information about the grants is on PwC’s website. The link to apply will be published on the government link above in early December 2018.

Ireland and the Netherlands have been offering grants for some time – here.

22 Nov 2018 Political Declaration (EU-UK Brexit/FTA)

Today (22nd Nov 2018) is published the text agreed by negotiators for the Political Declaration setting out the framework for the Future Relationship between the European Union and the United Kingdom. This document is here, and here.

(the Declaration is in the Annex starting on the second page)

The Declaration is agreed in principle at the Political level, subject to the endorsement of Leaders. It will remain a political document, and is not a legal document per se.

The text of the Declaration states that it is made under the Art 50 process set out in the EU Treaties for a member state to exit the Union, and it accompanies the Withdrawal Agreement text I posted about recently (dated 14 Nov) that has been endorsed by the EU and the UK, subject to ratification.

Clause 1 of the Declaration states :

1. The European Union, hereafter referred to as “the Union”, and the United Kingdom of Great Britain and Northern Ireland, hereafter referred to as “the United Kingdom”, (“the Parties”) have agreed this political declaration on their future relationship, on the basis that Article 50(2) of the Treaty on European Union (TEU) provides for the negotiation of an agreement setting out the arrangements for the withdrawal of a departing Member State, taking account of the framework for its future relationship with the Union. In that context, this declaration accompanies the Withdrawal Agreement that has been endorsed by the Parties, subject to ratification.

Further steps for the Withdrawal Agreement (and its accompanying Political Declaration) are :

(1) vote in the UK and EU Parliaments

(2) ratification by Leaders individually

The Withdrawal Agreement text is not reopen for change, save as respects the Transition Period extension clause, where an end date needs to be inserted. It is understood an option for two dates may be inserted, either a further 12 months to end Dec 2021 or a further 24 months to end Dec 2022. It is expected this will occur by this Sunday.

The Withdrawal Agreement is a legal document, made under EU law, which, if ratified, is international law as respects the UK after its automatic exit at end of March 2019.

14 Nov 2018 Withdrawal Agreement (EU-UK Brexit)

I posted yesterday (Brexit Status) that Withdrawal Agreement text had been agreed between EU and UK negotiators. This text was agreed last night at a meeting of the UK Cabinet, and then published – here. Alongside the 14 Nov 2018 Withdrawal Agreement text, a starter for the Outline Political Declaration on the Future Relationship was also published, and a Joint Statement (in that link).

Alongside this, DExEU also published and Explainer and Explanatory Notes – here.

The EU also published a Fact Sheet on the Withdrawal Agreement (WA) text – here, and a Fact Sheet on the Protocol on Ireland and Northern Ireland (one of the 3 Protocols to the WA) – here.

The 14 Nov 2018 Withdrawal Agreement has 185 Articles, 3 Protocols, and a series of Annexes.

The objective of the Withdrawal Agreement (WA) is to put in place an orderly exit of the UK from the EU on 12 midnight CET (11pm GMT) 29 March 2019 – dealing with matters such as citizen rights, money, and a series of separation technicalities. The WA (if ratified as a Treaty) also puts in place a Transition Period (in the UK, this is termed an Implementation Phase) lasting until 31 December 2020, during which EU Law will continue to apply and trade will be unchanged.

Note :

(1) the WA text must pass through a series of gates before ratification as a Treaty. When a Treaty, it will be given effect by the EU (Withdrawal and Implementation) Bill in the UK, which itself must be created and enacted. And this new Bill will necessarily amend and rewrite parts of the already enacted EU (Withdrawal) Act 2018. It is hoped, but by no means certain, these gates can be crossed by the exit date of 29 March 2019.

(2) during the transition to 31 Dec 2020, EU Law would continue to apply to and within the UK and override domestic law. But, as the UK will be a third country, this means it will have only minimal influence on the creation and enactment of EU law in that phase.

(3) a single extension for an (at present unspecified) length of time is permitted to the Transition Phase, this extension to be agreed by 1 July 2020. A firm end date will need to be negotiated by the European Council on 25th Nov (if it takes place).

(4) a specific Protocol for handling the border between Ireland and Northern Ireland is the first of 3 Protocols in the 14 Nov 2018 WA text. This Protocol includes a detailed “backstop” to be used if the Future Relationship is not in place by the end of the transition period.

(5) the UK is a Third Country on exit on 29 March 2019, the transition period gives a further short period for transition to this Third Country status (relationship with the EU).

(6) the objective is to transition from the current EU member state status direct to the Future Relationship (Trade Agreement) status, via the Transition Period (which could be extended).

Further work is ongoing, and the WA text must pass a series of gates.

It is essential that Brexit Preparedness planning continues, and that the current Brexit Preparedness and Brexit Contingency EU and the UK Notices are read and understood. I have posted these. Please keep following this Blog for updates.

New Chemicals Instructions (EU Brexit Preparedness)

ECHA (the European Chemicals Agency) has new support pages – here.

These pages contain the most detailed information so far.

The UK has also issued Technical Notices, some of these are relevant for Chemicals. But, many gaps still persist.

Please visit the Chemicals category on this Blog, for the posts I have written on Chemicals and Brexit Preparedness.

We still have no instruction on Safety Data Sheets.

Current Brexit State 14 Nov 2018 (UK and EU)

EU and UK officials have agreed the text for the Withdrawal Agreement (a treaty) and Outline Political Declaration (on the future relationship between the UK and the EU bloc). This text was communicated to the UK at 9pm 12 Nov 2018, and the UK Cabinet will meet today at 2pm 14 Nov 2018. A vote of the UK Parliament, and of the European Parliament, is required, and each Member State must ratify.

Reminder : the UK is a Third Country from midnight CET 29 March 2019.

The EU has issued Brexit Preparedness Notices, and other Communications – here. I have posted about these.

Yesterday 13 Nov 2018, the EU issued a new Communication – here, and a new Travel Notice here. I posted this yesterday.

The UK has issued Technical Notices – here. I have posted about these.

France has agreed its Preparedness Law – the draft law is here. Further information is here. I have posted about this Law.

Some dates already apply now :

(1) pet vaccination

(2) online applications (UK) for ECMT International Road Haulage Permits (from 26 Nov 2018)

In the event, the Withdrawal Agreement and Outline Political Declaration text does not progress, further No Deal Instructions can be expected from 1st December 2018. HMRC and DfT already issued further No Deal instructions (I posted about these), and more can be expected.

In the event, the Withdrawal Agreement and Outline Political Declaration text does progress, and the Treaty is ratified, this will give a Transition/Implementation phase until Dec 2020, but the UK is still a Third Country from March 2019 (as above), albeit running under the arrangements put in place by the Withdrawal Treaty (in the UK this would be a Withdrawal and Implementation Act).

Business, charities and households must continue their preparations.

Please continue to follow and pay close attention to this Blog.

No Deal Contingency Action Plan (EU Brexit Contingency Measures)

The Commission has issued a Press Release updating on its No Deal Contingency Action Plan. The Press Release with links is here.

Note – the new Travel Notice (linked from the Press Release).

Note – the new 13 November Communication (linked from the Press Release)

Additionally two November 2018 PDF documents summarise the situation. Here and Here. The second PDF is reproduced as two images.

Chemicals Regulation (UK Brexit Preparedness)

Very little direct Brexit instruction is published by the UK on Chemicals Regulation, beyond the UK Technical Notices (I already posted about on this Blog). The EU also has its own Brexit Preparedness Notices (I already posted about on this Blog).

Today (7th November) the House of Lords EU European Union Committee published its report of evidence taken on the matter. This report is here,

There is agreement between the Government, industry and NGOs that the UK’s continued participation in REACH, the main system of EU chemical regulation, and continued membership of the European Chemicals Agency would be the best Brexit outcome.

But UK Brexit Preparedness is not advanced.

The Report identifies the following as requiring urgent attention (by Government) :

(1) clarifying its intended approach to chemical regulation in the future;

(2) creating and populating a database of chemicals;

(3) preparing a UK body to take on the role of chemical regulation in a way that is independent, transparent and scientifically robust;

(4) enabling businesses, including small businesses, to take pre-emptive action to maintain valid registrations for the EU market; and

(5) mitigating the economic impact on the chemical industry that would result from leaving the EU system.

NOTE THIS (referring to the evidence taken)

If associate membership of and ongoing participation in ECHA are not negotiated by exit day, a number of challenges arise. The first is the fact that, barring any preventative action, all chemical registrations will become invalid in the UK, and all registrations made solely by UK companies will become invalid in the EU. This would prevent the trade and use of those chemicals.

Peter Smith, Executive Director for Product Stewardship at Cefic, explained that there were 21,000 chemicals registered through REACH, 5,000 of which were registered by UK companies.

However, Ms Bulleid made the point that where one of those 5,000 substances is registered jointly by both a UK-based company and an EU-27-based company, “some people will be able to put it on the [EU] market, but the UK registrants will not”.

Ms Lloyd agreed, stating that chemicals registered by UK companies will not be invalid in the EU “unless the only registrants of that substance are UK companies”.

As a result, UK companies will lose access to the EU market, but the number of chemicals that would be prohibited is unclear.

THE REPORT CONTINUES WITH THE EVIDENCE GIVEN BY MINISTERS ON THEIR STEPS ON THE MATTER OF ILLEGAL REGISTRATIONS – these include :

(1) a new statutory instrument (Brexit Regulation) to continue the validity of UK registrations by UK registered companies for the UK market

(2) a DEFRA Secretary of State observation (based on the EU Brexit Preparedness Notices) that UK companies can mitigate by transferring their registration to an EU based affiliate or representative, but this is acknowledged as not possible in advance of exit day so there would be

a void of weeks or months before such companies are able to export substances to the EU.

Ms Edwards acknowledged this difficulty, stating that “there has been some discussion suggesting that you would need some sort of mechanism in place to enable those registrations to be transferred in advance”, but indicating that no such provision had yet been put in place

ON THE MATTER OF THE UK DATABASE

Ms Peake informed us: “Defra has asked for £5.8 million to set up an IT infrastructure to register chemicals in the UK in the case of having to set up an independent UK chemicals regulation system.”

Ms Edwards stated: “We are trying to build a system that will replicate, as far as it can, what the ECHA system does. Some of the fuller functionality that is not necessarily required on day one will come on board on a slightly slower timescale, but the critical thing for day one is to have that registration function in place.”

PLEASE CONTINUE TO FOLLOW THIS BLOG

Customs, Excise and VAT (UK Brexit)

I have posted already with the UK Technical Notices for Brexit Preparedness. HMRC has three of these Technical Notices. Further instruction is now issued from HMRC in the form of a Partnership Pack. This is here.

For goods exports, the following is required :

(1) register for an EORI number – not open yet [EORI – is UK Economic Operator Registration and Identification Number] and ensure the EU bloc customer also has an EORI number

(2) check is a special licence is required

(3) get the commodity code from published codes

(4) get the correct Customs Procedure Code (CPC)

(5) decide how to declare to HMRC – this is complex – decide if to pay a Freight Forwarder, an Express Courier, or a Customs Agent/Broker

(6) register for the National Export System (NES)

(7) attach the invoice (and licence if needed) with the goods transport

(8) present the goods to customs

(9) finalise the Export entry on HMRC CHIEF system

(10) keep records for 6 years

The Pack is the first of a series of more specific HMRC instructions. This Pack also covers Goods Imports. It does not cover direct sales on a digital platform.