(status of) Withdrawal Agreement & Political Declaration (EU-UK FTA)

The EU has now published (in the Official Journal) both the Withdrawal Agreement and the Political Declaration – here.

Accompanying this is an EU Council Decision – here.

A couple of points to make :

(1) ratification of the Withdrawal Agreement (the “deal”) is required by both the UK and the EU Parliaments,

(2) the Political Declaration is a non-binding legal statement of intent, that may form the basis for the EU-UK FTA,

(3) the Withdrawal Agreement (if ratified) provides for a transition period during which — notwithstanding all consequences of the United Kingdom’s withdrawal from the Union as regards the United Kingdom’s participation in the institutions, bodies, offices and agencies of the Union — Union law, including international agreements, will be applicable to and in the United Kingdom.

The Commission, on behalf of the Union and of Euratom, would therefore notify the other parties to these agreements that the United Kingdom is to be treated as a Member State for the purposes of those agreements during the transition period.

UK Carbon Emissions Tax (UK Brexit)

I posted before about the Carbon Emissions Tax that will be applied in place of EU ETS (the EU carbon trading scheme). The UK Government issued yesterday further instructions on this Carbon Emissions Tax. These instructions are here.

UK Carbon Emissions Tax – imminent key dates

From 30 March 2019, if there is no transition, business emissions from 1 January 2019 onwards will no longer be covered by the EU ETS, so UK businesses will no longer need to surrender allowances for these emissions at the end of each year.

However, all stationary installations currently participating in the EU ETS should continue to comply with the regulations for the monitoring, reporting and verification of greenhouse gases. These regulations will underlie the new UK Carbon Emissions Tax.

The UK Carbon Emissions Tax is provided for in the Finance Act 2019 and will be introduced on 1 April 2019 – the reporting period for stationary operators will be 1 April 2019 to 31 December 2019. The 2019 tax will be set at £16 per tonne. Subject to state aid approval, the scheme to compensate energy-intensive industries for the indirect costs of the EU ETS would remain in place to compensate for the indirect emission costs of the new Carbon Emissions Tax.

The Finance Act 2019 is now added to the Brexit Law List, in Cardinal Environment EHS Legislation Registers & Law Checklists.

Accounts administered by the UK in the EU ETS allowance registry and the Kyoto Protocol registry will be blocked from the point of the UK leaving the EU. Operators wishing to retain access to their allowances after the withdrawal date should consider opening an account in another member state’s registry for this purpose, and should consider the amount of time this is likely to take. Clean Development Mechanism project developers with a UK Letter of Authority will also need a letter of approval from a different Designated National Authority.

Until further notice, the UK government will not issue or auction any 2019 EU ETS allowances. It remains possible for allowances to be purchased through the European Energy Exchange (EEX) auction platform, and on the secondary market. Operators should consider this when planning to meet 2018 compliance obligations. To make sure obligations will not be affected, the government brought forward the 2018 compliance year deadlines, published on 7 March 2018. This states that a company (in EU ETS) needs to report its 2018 emissions by 11 March 2019, and surrender allowances for those emissions by 15 March 2019.

Guidance on this was issued in October 2018 – here.

F-gases and ODS (UK Brexit)

I posted before that the UK will regulate Fluorinated Greenhouse Gases (F-gases) and Ozone Depleting Substances (ODS) from 30th March 2019, and that a Technical Notice had been issued on this (the Environment Agency would be the regulator).

New Guidance on Use and Trade is now issued.

The new Brexit Use and Trade Guidance is here. I will add this to the Brexit Law List, in Cardinal Environment EHS Legislation Registers and Law Checklists.

F-gas and ODS are substances used mainly as refrigerants, but also in other products including:

• medical inhalers

• fire extinguishers

• insulation foams

• solvents

• feedstocks for the manufacture of other chemicals

This affects UK companies that :

• produce, supply, import, export or use bulk F-gas or ODS

• manufacture or import equipment containing F-gas or ODS

In addition, the document applies to the service of :

• commercial, industrial and transport refrigeration and air conditioning systems

• other products containing F-gas or ODS

New UK ODS and Fgas regulations transfer most of the requirements of the EU regulations into UK law. These are found in the Brexit Law List.

The UK will continue to:

• restrict ODS

• use the same schedule as the EU to phase down HFCs (hydrofluorocarbons, the most common type of -gas) by 79% by 2030 relative to a 2009 to 2012 baseline.

That means UK F-gas quotas will follow the same phase down steps as the EU:

• limited to 63% of the baseline in 2019 and 2020

• reducing to 45% of the baseline in 2021

Most of the rules for F-gas and ODS will not change. However, the UK will have separate quota systems, and the IT systems UK businesses use to manage quotas and report on use will change.

UK companies will need to comply with EU regulations on products they place on the EU market after exit (since after 30 March, the UK will be a ‘third country’).

Scotland, Wales and Northern Ireland have all decided to remain part of a single, UK-wide system if the UK leaves the EU with no deal on 29 March 2019.

The Environment Agency will administer the systems for the whole of the UK.

F-gases

When the UK leaves the EU, many of the rules for F-gases will not change, including requirements or restrictions:

• to prevent intentional release of F-gases

• to prevent the unintentional release of F-gases during production and use

• to minimise and repair leakages

• to check leaks and keep records

• to use leakage detection systems

• to provide evidence that trifluoromethane produced during the production of F-gases has been destroyed

• to recover F-gases from equipment for recycling, reclamation or destruction

• on placing certain products and equipment on the market

• on sales of F-gases to businesses which do not hold the relevant certificates or attestations

• for product and equipment labelling

• on the use of certain F-gases for magnesium die-casting, vehicle tyres or servicing certain refrigeration equipment

Requirements in the UK will also not change on:

• the individual qualifications and company certifications you need to install, service, maintain, repair, decommission or check for leaks in certain equipment or the recover F-gas

• the content and requirements of training and certification programmes

• the validity of existing certificates and training attestations, including those issued by EU member states both before and after the UK leaves the EU.

ODS

When the UK leaves the EU, the rules will stay the same for ODS that a UK company :

• imports

• supplies

• uses

• recovers

• destroys

UK companies will have the same responsibilities to:

• maintain equipment

• control leaks

Rules on how a UK company supplies and uses ODS will remain the same, including for:

• feedstock

• process agents

• destruction

• reclamation

• essential laboratory and analytical use

• halons for certain critical uses

NOTE : the above is written for the situation “post 30 March if there is no deal in place”. This is a short hand. Please keep following the Blog for updates.

Road Haulage (NI Brexit)

UPDATE : the EU Council has now agreed its position on basic road connectivity – here.

There is uncertainty in the haulage industry about what will happen at EU borders if the UK leaves without a Brexit deal next month.

Back in November, the UK Government issued guidance to UK hauliers stating that they “might need ECMT permits to transport goods in the EU and European Economic Area (EEA)” if there is no deal by 29 March.

The European Conference of Ministers of Transport (ECMT) permits can be used in a list of 43 countries which have signed up to the international arrangement.

The deadline for 2019 applications expired on 18 January 2019 and on Saturday night, many hauliers were informed on whether or not they were successful. I posted earlier about the deadline.

ECMT permits were over-subscribed and allocated on a points-based system, with higher scores awarded to firms who make a larger number of journeys into EU member states.

It would appear the Department for Transport (DfT) did not take into account journeys to the Republic of Ireland from Northern Ireland operators, whereas English, Scottish or Welsh hauliers were credited with their journeys to the Republic of Ireland.

Just over 1,200 permits were available for the UK as a whole and it is likely only 60-70 were made available to Northern Ireland firms.

In its guidance issued last year, the Government said it expected that Northern Ireland hauliers “will not need an ECMT permit” to drive to or through the Republic of Ireland.

It stated it would not require Republic of Ireland hauliers to have ECMT permits to operate in Northern Ireland.

It added that the UK was seeking a reciprocal agreement from the Irish government to allow Northern Ireland hauliers to travel across the Irish border without a permit.

I posted earlier that the European Commission (in its Contingency Plan) has proposed legislation that would allow UK hauliers basic rights (on a reciprocal basis) to conduct operations to, from and through the EU for a limited period of nine months after exit, if there is no deal.

“The Commission’s proposal will need to be agreed by the Council and European Parliament, and is being considered by both institutions urgently.” (UK Transport Minister, by statement last week)

The minister said he laid legislation before Parliament last week to provide for that access. [this will be included in the Brexit Law List, added to Cardinal Environment EHS Legislation Registers and Law Checklists]

HSA Brexit Guide (Ireland Brexit)

From 30th March 2019, the UK will become a “third country”. The Health and Safety Authority (HSA) is the Competent Authority for a range of EU Regulations and Directive in Ireland.

The HSA has now issued a Brexit Overview document – here.

Cardinal Environment will be setting up a Brexit Law List for Ireland EHS Legislation Systems and Checklists, shortly. We will place this and other guidance on that list.

This HSA Brexit Overview reminds :

(1) Products imported from the UK from 30 March 2019 need to be EU compliant.

(2) Irish companies need to know the full supply chain for all their products (for example machinery, chemicals) and how it is linked to the UK or NI, including via distributors.

(3) Unless Irish companies can source their product from another EU supplier, the Irish company may become an EU importer after Brexit, with additional legal responsibility for compliance of the product with EU law. I posted about this recently.

(4) After Brexit, Irish companies will no longer be able to rely on notified bodies based in the UK to undertake 3rd party conformity assessments required under relevant EU law. They will need to source a notified body legally designated to carry out conformity assessments in the EU27.

This applies to Chemicals, Machinery, Transportable Pressure Equipment, and other classes of Industrial Products.

The above also applies in the rest of the EU27, and in the EEA.

PIC notifications (EU Brexit)

Helsinki, 8 February 2019 – ECHA recommends companies to prepare for a ‘no deal’ scenario ahead of the UK’s withdrawal on 30 March 2019.

If a downstream user in one of the EU-27/EEA countries relies on REACH authorisations granted to a UK-based company, they need to make sure that there is another EU-27/EEA supplier with a valid authorisation for their use.

EU-27 companies will also need to notify their exports of hazardous substances regulated under the PIC Regulation when exporting to the UK. This will be done using the ePIC tool. The export notification in ePIC needs to be submitted 35 days before the export. ECHA will soon clarify how to deal with exports to the UK during the period right after the UK’s effective withdrawal.

Companies based in the EU-27/EEA will also need to prepare for placing substances on the UK market after 29 March, which will be governed by UK law. The UK Health and Safety Executive (HSE) has published respective guidance.

Please keep following this Blog.

REACH registrations (UK Brexit)

ECHA has just now (8th February) announced new instructions for Chemicals export to the EU and the EEA. Here

To keep substances that are registered under REACH legally on the EU-27/EEA market, UK-based manufacturers and formulators can either transfer their business to, or appoint an only representative in, one of the EU-27/EEA countries.

Subject to further developments, ECHA will open a ‘Brexit window’ in REACH-IT from 12 to 29 March, 24:00 hours CET (11 p.m. UK time) to enable UK-based companies to make these changes and transfer their REACH registrations. If an only representative is not appointed, the EU-27/EEA importers will have to submit their own registrations.

Step-by-step instructions for using the ‘Brexit window’ are now available on ECHA’s web pages for the UK’s withdrawal from the EU. The pages also include a link to the European Chemical Industry Council’s (Cefic) recommended standard wording for the suspensive conditional clause to be used in contractual arrangements when appointing only representatives.

If a downstream user in one of the EU-27/EEA countries relies on REACH authorisations granted to a UK-based company, they need to make sure that there is another EU-27/EEA supplier with a valid authorisation for their use.

Companies based in the EU-27/EEA will also need to prepare for placing substances on the UK market after 29 March, which will be governed by UK law. The UK Health and Safety Executive (HSE) has published respective guidance.

Further details, including a list of substances registered only by UK companies, are available on ECHA’s web pages for the UK’s withdrawal from the EU.

Access to the ECHA’s web pages is found from the above link in this Blog post.