Cardinal Environment Limited (office address)

As of 5pm today, 15 June, Cardinal Environment Limited has a new office address as shown below :

International Centre for HSE Regulatory Analysis

Regus Watford

1st Floor, Building 2, Croxley Business Park

Watford, Hertfordshire

WD18 8YA, United Kingdom

[all other contact details remain the same]

An Email Alert will be sent out.

Border Controls from 1st Jan 2021 (EU Goods Imports)

The UK Government has today (12 June 2020) announced that border controls for EU goods imported into Great Britain will be introduced at the end of Transition Period in stages.

The announcement is here.

This staged approach will apply to EU goods imports to GB only. The EU will enforce the checks required by EU Law in its side of the border, there are no announcements for facilitation applicable to GB goods exports to the EU.

Per the Government announcement –

• From January 2021: Traders importing standard goods, covering everything from clothes to electronics, will need to prepare for basic customs requirements, such as keeping sufficient records of imported goods, and will have up to six months to complete customs declarations. While tariffs will need to be paid on all imports, payments can be deferred until the customs declaration has been made. There will be checks on controlled goods like alcohol and tobacco. Businesses will also need to consider how they account for VAT on imported goods. There will also be physical checks at the point of destination or other approved premises on all high risk live animals and plants.

• From April 2021: All products of animal origin (POAO) – for example meat, pet food, honey, milk or egg products – and all regulated plants and plant products will also require pre-notification and the relevant health documentation.

• From July 2021: Traders moving all goods will have to make declarations at the point of importation and pay relevant tariffs. Full Safety and Security declarations will be required, while for SPS commodities there will be an increase in physical checks and the taking of samples: checks for animals, plants and their products will now take place at GB Border Control Posts.

An EU to GB (EU goods imports to GB) border operating model will be published by the UK in July 2020.

Trade flows between Northern Ireland and Ireland, or between GB and Northern Ireland are separate and covered by the Withdrawal Agreement.

The UK Global Tariff will apply to all goods imported into the UK from 1 January 2021, unless an exception applies. The measures announced today will not apply to third countries outside of the EU. Full import controls will continue to apply on trade between the UK and third countries outside of the EU and EEA.

As I commented in earlier Blog posts, commencing August 2020, we (Cardinal Environment) will be putting some staff through the UK Customs Academy Level 4 Certificate in Advanced Customs Compliance (tariffs and customs training). This is to facilitate client queries in the foreseeable.

The Future of Carbon Pricing (UK)

UK CRC (carbon trading based on electricity through half hourly meters) is closed. The final compliance year for participants in CRC was 2018 to 2019. A participant’s CRC registry account must be maintained until 31 March 2022 and evidence packs until 31 March 2025. The CRC regulators will continue to do compliance audits and take enforcement action where necessary until 31 March 2025.

From 1 April 2019 SECR requires many companies formerly within the scope of the CRC to report energy consumption and energy efficiency actions. They must do this as part of their annual director’s report. Subscribers with Law Checklists have a line entry for SECR, which I have asked on a number of occasions should be completed, as evidence you are on top of this requirement.

The UK Government and Devolved Administrations consulted on the future of carbon pricing in the UK after EU Exit, receiving over 130 responses from a range of stakeholders, with the majority supporting most of the proposals on the design of a UK ETS.

As a result, the UK intends to establish a UK Emissions Trading System with Phase I running from 2021- 2030, which could operate as either a linked or standalone system.

As stated in ‘The UK’s Approach to Negotiations’ the UK would be open to considering a link between any future UK Emissions Trading System (ETS) and the EU ETS (as Switzerland has done with its ETS), if it suited both sides’ interests.

As announced at Budget 2020, the UK Government will publish a consultation later this year on the design of a Carbon Emission Tax as an alternative to a UK ETS, to ensure a carbon price remains in place in all scenarios. I blog posted some time ago, that provision for a Carbon Emissions Tax is already on the statute books in a UK Finance Act.

The UK ETS will apply to energy intensive industries (EIIs), the power generation sector and aviation – covering activities involving combustion of fuels in installations with a total rated thermal input exceeding 20MW (except in installations for the incineration of hazardous or municipal waste) and sectors like refining, heavy industry and manufacturing. The proposed aviation routes include UK domestic flights, flights between the UK and Gibraltar, flights from the UK to EEA states, and flights from the UK to Switzerland once an agreement is reached.

In light of the UK’s commitment to reaching net-zero emissions by 2050, the UK ETS will show greater climate ambition from the start. As such, the cap will initially be set 5% below the UK’s notional share of the EU ETS cap for Phase IV of the EU ETS.

The Committee on Climate Change (CCC) will advise later this year on a cost-effective pathway to net-zero, as part of their advice on the Sixth Carbon Budget. The state will consult again on what an appropriate trajectory for the UK ETS cap is for the remainder of the first phase within nine months of this advice being published.

The aim is that any changes to the policy to appropriately align the cap with a net zero trajectory will be implemented by 2023 if possible and no later than January 2024, although the aim is also to give industry at least one year’s notice to provide the market with appropriate forewarning.

Auctioning will continue to be the primary means of introducing allowances into the market. To safeguard competitiveness in the UK ETS and reduce the risk of carbon leakage, a proportion of allowances will be allocated for free. Some free allowances will also be made available for new stationary entrants to the UK ETS as well as existing operators who increase their activity – these allowances will be accessible through the New Entrants Reserve. The initial UK ETS free allocation approach will be similar to that of Phase IV in order to ensure a smooth transition for participants for the 2021 launch.

In a standalone UK ETS the state will introduce a transitional Auction Reserve Price (ARP) of £15 (nominal) to ensure a minimum level of ambition and price continuity during the initial years.

A Small Emitter and Hospital Opt-Out will be implemented for installations with emissions lower than 25,000t CO2e per annum and a net-rated thermal capacity below 35MW. An Ultra-Small Emitter Exemption will be implemented for installations with emissions lower than 2,500t CO2e per annum.

International credits will not be permitted in a UK ETS at this time. This is without prejudice to ongoing reviews on how best to implement the UN global offsetting scheme, CORSIA, alongside a UK ETS.

The sections above re the UK ETS are abridged (with highlights) from the summary in the Responses Document – the document itself is here.

COVID-19 Aviation Health & Safety Protocol (EU)

On 15 April 2020, the European Commission, in cooperation with the President of the European Council, put forward a Joint European Roadmap setting out recommendations on lifting COVID-19 containment measures. I Blog posted about this at the time.

As called for in the Roadmap, on 13 May 2020, the Commission put forward further guidelines on how to progressively restore transport services, connectivity and free movement as swiftly as the health situation allows it, while protecting the health of transport workers and passengers. I also put a Blog post about this.

The Commission Communication mandated EASA (the European Union Aviation Safety Agency) and ECDC (the European Centre for Disease Prevention and Control) to issue jointly more detailed technical operational guidance for the aviation sector.

This document is here.

As the document itself says –

The purpose of this aviation health safety protocol is to provide guidance to airport operators, aeroplane operators and national aviation authorities, as well as other relevant stakeholders, on how to facilitate the safe and gradual restoration of passenger transport. This is subject to the deployment of proportionate and effective measures to protect the health of aviation personnel and passengers, by reducing the risk of SARS- CoV-2 transmission in the airport and on board aircraft as much as practicable.

COVID-19 Restrictions Changes (UK)

In the past days, a number of UK jurisdictions have changed their Restrictions law. This is in order to relax some of the lockdown measures.

The new amendments will be loaded today into the COVID-19 Law List in Cardinal Environment EHS Legislation Registers & Checklists – the COVID-19 Law List is found on the top right accessed from the OHS topic page. [UK and Ireland systems]

As this emergency situation continues, we will be bringing forward COVID-19 Law Checklists (UK jurisdictions). I will advise nearer the time when these will be available.

‘WTO’ standards and regulations (WTO)

The WTO is the World Trade Organisation, based in Geneva, dating from 1994. Individual countries are members, and the EU, and three ‘customs territories’ of China.

This document gives a useful account of ‘trading on WTO terms’ and ‘WTO rules’ – here.

If a trade deal is not signed with the EU to take effect 1st January 2021, then the UK and the EU will trade with one another on WTO terms, the WTO rules already applying.

In the WTO, countries are free to choose the standards and regulations they adopt, with some conditions. They are encouraged to use internationally recognised standards. Or they can set their own provided they can justify the standards with scientific evidence and risk assessment. The purpose is to ensure the standards are genuine, not arbitrary or an excuse to be protectionist. [extract from the further information below link]

Further information about ‘WTO’ standards and regulations is set out – here.

We (Cardinal Environment) will (for 1st Jan 2021) add the relevant international standards and regulations to the EHS Legislation Registers & Checklists (UK systems).

UK Global Tariff (UK Brexit)

I posted before that the UK has announced its new UK Global Tariff.

These are tariffs that will apply on any products that the UK imports on a Most Favoured Nation (MFN) basis from the end of the transition period when the UK is no longer bound by the EU’s Common External Tariff. The published tariffs come after a public consultation on the subject was held in February this year.

Under the new Global Tariff, 66% of tariff lines will see some degree of change.

Tariffs on around 2,000 products have been fully eliminated, almost doubling the number of tariff-free products compared to the existing EU MFN schedule. A further 40% of tariff lines have been ‘simplified’ meaning that they have either been rounded down to the nearest standardised band, or have been converted from specific duties into simple percentages. And just under 10% of tariff lines have been converted from being expressed in € to being expressed in £ using an average exchange rate over the last 5 years. This conversion also entails some degree of simplification, as specific duties have  been rounded down to the nearest £, and for two-part duties, which include both a percentage tariff and a fixed charge, the percentage component has been rounded down to standardised bands.

My Blog does not focus on tariffs and customs, but as I explained in an earlier Blog post, we (Cardinal Environment) will be putting some staff through the UK Customs Academy training, in order to assist our customers further.

L. Alan Winters CB, Professor of Economics and Director of the UK Trade Policy Observatory; and Michael Gasiorek, Professor of Economics at the University of Sussex and Julia Magntorn Garrett, a Research Officer in Economics at the University of Sussex, (Fellows of the UK Trade Policy Observatory) have written a useful Blog on the subject.

This Blog is here. Extracts are below in italics.

The largest relative change is for stone, plaster and cement, where around 85% of tariff lines have changed to some degree, just under half of which have been fully liberalised. This is followed by processed food products, where most of the change is due to conversion of specific duties, and plastics and rubber products and chemical products where the vast majority of tariff lines have been simplified (rounded down).

The tariff changes would increase the share of imports that can be imported duty-free from countries currently trading on MFN terms. Under the Global Tariff, around 70% of the UK’s imports from ‘MFN countries’ would be duty-free compared with around 52% currently. However, the Global Tariff is far less liberal than the UK’s (now superseded) ‘No deal’ tariffs that were published in October last year, which would have seen tariffs eliminated on around 95% of imports from ‘MFN countries’.

If the UK and the EU do not reach a trade deal by the end of the transition period, the Global Tariff will apply also to imports from the EU. In this scenario, only around 44% of imports from the EU would be tariff free, compared with 100% currently. This is a higher share than if the current MFN tariff schedule was applied on EU imports, but is a much smaller share than it would have been under the ‘No deal’ tariffs.

Canada is one of the countries that did not roll over their trade deal with the EU, this writing is useful on the subject, and gives context – here.

COVID-19 Workplace Guidance (England)

Yesterday (25 May) saw the key Working Safely guidance for different workplaces (issued 11 May) updated to reflect industry feedback and to expand coverage of non essential retail categories ahead of planned opening.

On the 19 May, the 5 steps for businesses to take were added – here. Please note (as I posted before, check back on my Blog, the risk assessments of larger businesses must be published on their websites).

You should share the results of your risk assessment with your employees. If possible, you should consider publishing it on your website (and we would expect all businesses with over 50 employees to do so).

Notice that should be displayed in the workplace – here.

The Working Safely Guidance link is here.

Please note the links to the guidance issued in Scotland, Wales and Northern Ireland, where the timetable of non-essential business re-opening differs.

Non-essential retail in England will re-open in June, as set out in the PM timeline issued yesterday 25 May –

• Outdoor markets and car showrooms will be able to reopen from 1 June, as soon as they are able to meet the COVID-19 secure guidelines to protect shoppers and workers. As with garden centres, the risk of transmission of the virus is lower in these outdoor and more open spaces. Car showrooms often have significant outdoor space and it is generally easier to apply social distancing.

• All other non-essential retail including shops selling clothes, shoes, toys, furniture, books, and electronics, plus tailors, auction houses, photography studios, and indoor markets, will be expected to be able to reopen from 15 June if the Government’s five tests are met and they follow the COVID-19 secure guidelines, giving them three weeks to prepare.

Certain businesses and activities must remain closed – see here. This is underpinned by enacted law.

UK implementation of Ireland/Northern Ireland Protocol (Northern Ireland)

The UK government has today published its approach to implementing the Ireland-Northern Ireland Protocol of the Withdrawal Agreement that was signed with the European Union.

The Protocol sets up special arrangements that stem from the Withdrawal Agreement and apply in Northern Ireland from 1st January 2021, until at least 2024, when the first four-year consent vote process contained in the Protocol is initiated.

The Protocol covers a range of areas: human rights, the Common Travel Area, customs and trade, regulation of manufactured goods, the Single Electricity Market, some limited state aid provisions, and VAT and excise. The paper published today sets out the UK’s thinking in all of these areas. But the core of the Protocol is the provisions on customs and trade. It is these areas which are covered in most detail in the document.

It is the responsibility of the UK Government and UK authorities to give effect to the Protocol in Northern Ireland. The Protocol has as Annex 2, a list of EU law that will continue to apply in Northern Ireland – at least 2021 to 2024.

The UK approach is set out in a Cabinet Office Command Paper – here.

The paper sets out four key commitments that will underpin the UK Government’s approach to implementing the Protocol:

• There will be unfettered access for Northern Ireland’s producers to the whole of the UK market and this will be delivered through legislation by the end of the year.

• No tariffs will be paid on goods that move and remain within the UK customs territory

• Implementation of the Protocol will not involve new customs infrastructure – with any processes on goods moving from Great Britain to Northern Ireland kept to an absolute minimum so that the integrity and smooth functioning of the UK internal market is protected.

• Northern Ireland’s businesses will benefit from the lower tariffs delivered through our new Free Trade Agreements with countries like the United States, Australia, New Zealand and Japan – ensuring Northern Ireland firms will be able to enjoy the full benefits of the unique access they have to the GB and EU markets.

Today’s publication also sets out plans to establish a new business engagement forum, which will meet regularly to allow Northern Ireland’s businesses to put forward proposals and provide feedback on how to maximise the free flow of trade. The Northern Ireland Executive will be invited to join the forum.

The Withdrawal Agreement is administered by a Joint EU-UK Committee set up under the Agreement, and both the Agreement and the Protocol have dispute mechanisms.

More detail is expected, and accordingly I will write more Blog posts.