UK Internal Market Bill (UK)

A highly complex bill was introduced yesterday at First Reading. This bill is here.

Explanatory Notes for the bill are here.

The Institute for Government has a useful explainer here.

I Blog posted about the possibility of an Internal Market Bill earlier this year. In the meantime, the UK Government published a policy paper and conducted a short consultation.

From 1 Jan 2021, the UK government and the devolved administrations will no longer be collectively bound by EU law. As powers over key policy areas return to the UK government and the devolved administrations, there is a possibility that different parts of the UK may in future make different rules. This could create barriers to trade between constituent parts of the UK.

The UK Internal Market (UKIM) Bill would rely on the principles of mutual recognition and non-discrimination to ensure there are no new barriers for businesses trading across the UK.

The UK government argues that this bill will be necessary to underpin the functioning of the UK internal market after the end of the transition period – but the Scottish and Welsh governments are opposed to this approach. Instead, they would prefer to manage any possible new barriers to trade through mutually-agreed common frameworks in specific policy areas.

The government is also using this bill to give ministers powers to amend how the UK could implement the Ireland/Northern Ireland Protocol of the EU-UK Withdrawal Agreement – if it can’t reach key decisions with the EU. The government has said that it will use the forthcoming Finance Bill (not yet published) to give ministers further powers with relation to the Northern Ireland protocol.

Clauses set out new monitoring responsibilities of the internal market for the Competition and Markets Authority (CMA), which will be exercised through an Office for the Internal Market (OIM).

The CMA will have powers to monitor and report on the effectiveness of the internal market, under its own initiative or at the request of the UK or devolved governments. Although its remit will be limited to regulations which fall within the scope of the earlier parts of the bill (and will exclude anything giving effect to the Northern Ireland protocol).

The government plans to pass the UK Internal Market Bill before the UK leaves the transition period at 11pm on 31 December – this means there will be limited time for parliament to scrutinise this constitutionally significant piece of legislation.

It will need to pass both the Commons and the Lords before it can become law, and both Houses will be able to table amendments.

Manufactured Goods (UK from 1st Jan 2021)

On 1st Sept 2020, the UK issued instructions for persons placing manufactured goods on the UK market after 1 Jan 2021. These instructions are here.

The instructions detail the situation for the GB market, separate links access instructions for GB companies placing goods on the EU market, and for Northern Ireland. Please follow those links and read the information set out there.

Separate rules apply to chemicals, medicines, vehicles and aerospace. Follow the links for the latest information. Medicines is well elaborated.

There are also rules for goods that are not covered by EU rules. Follow those links for the latest information there.

Finally, some other categories have particular rules, follow those links.

Please read my separate Blog post on UKCA marking. Note, UKCA marking will not be recognised in the EU or Northern Ireland markets. Products currently requiring a CE marking for sale in the EU will continue to need a CE mark.

Note, distributors of EU goods in the UK will become importers from 1 Jan 2021.

Queries should be sent to BEIS.

UKCA Mark (UK from 1st Jan 2021)

On 1st September, the UK issued instructions for manufactured goods (and some other classes of goods), together with instructions on the UKCA mark applicable from 1st Jan 2021.

The UKCA mark instructions are here.

The instructions for manufactured goods are here.

The instructions for medical devices are here (note CE marked goods can circulate in GB until 30 June 2023).

The instructions for construction products are here.

The instructions for explosives are here. (HSE)

The instructions for rail interoperability are here. (dating from 1st July 2020)

UKCA (UK Conformity Assessed) marking is a new UK product marking that will be used for goods being placed on the market in Great Britain (England, Wales and Scotland). It covers most goods which previously required the CE marking, and aerosol products. I Blog posted some time ago about UKCA marking coming in.

UKCA marking alone cannot be used for goods placed on the Northern Ireland market, which will continue to require CE marking or UK(NI) marking.

The technical requirements (‘essential requirements’) and the conformity assessment processes and standards that can be used to demonstrate conformity – will be largely the same from 1st Jan 2021 as they are now.

UKCA marking can be used from 1 January 2021. However, CE marking will be permitted until 1 January 2022 in most cases.

CE marking will only be valid in Great Britain for areas where GB and EU rules remain the same. If the EU changes its rules and the product carries the CE mark on the basis of those new rules, CE marking will not be permitted for sales in Great Britain even before 31 December 2021. Please look out for Blog posts.

UKCA marking will not be recognised on the EU market. Products currently requiring a CE marking will need a CE marking for sale in the EU from 1 January 2021. [note from 1 Jan 2021, CE marks must be issued by legal entities based in the EU]

UKCA marking does not apply to existing stock, for example if the good was fully manufactured and ready to place on the market before 1 Jan 2021. In these cases the good can be sold in Great Britain with a CE marking even if covered by a certificate of conformity issued by a UK body.

On 1 Jan 2021 UK standards will be the same in substance and with the same reference as the standards used in the EU. However, they will use the prefix ‘BS’ to indicate that they are standards adopted by the British Standards Institution as the UK’s national standards body.

From 1 Jan 2022, CE marks will not be recognised in Great Britain for areas covered by the UKCA mark instructions and the UKCA marking. However, a product bearing the CE marking would still be valid for sale in the UK so long as it was also UKCA marked and complied with the relevant UK rules. Separate rules apply to medical devices (see the link above).

Product areas covered by the UKCA marking

• Toy safety

• Recreational craft and personal watercraft

• Simple pressure vessels

• Electromagnetic compatibility

• Non-automatic weighing instruments

• Measuring instruments

• Lifts

• ATEX

• Radio equipment

• Pressure equipment

• Personal protective equipment

• Gas appliances

• Machinery

• Outdoor noise

• Ecodesign

• Aerosols

• Low voltage electrical equipment

• Restriction of hazardous substances

All enquiries should be to BEIS.

This is a summary, please follow the links and read the instructions in full.

Medical Supplies (UK from 1st Jan 2021)

Healthcare is devolved in the UK, but contingency planning covers all 4 nations of the UK as well as the Crown Dependencies. Yesterday, the Department of Health & Social Care (DHSC) wrote to medical suppliers. The letter is here.

Re-routing away from the short straits

A large percentage of medical supplies come from the EU or have a supply touchpoint at the short straits (between Calais/Dunkirk/Coquelles and Dover/Folkestone). The DHSC letter asserts the first priority of any contingency should be to maintain replenishment rates at necessary levels by securing capacity to reroute freight away from the short straits potential disruption points. Companies are encouraged to review their own logistics arrangements and consider making plans for avoiding the short straits as a matter of priority.

In 2019, the Department for Transport (DfT) put in place a 4-year procurement framework for freight capacity for ‘Category 1’ goods , which includes all health supplies. This framework is still in place. DHSC is seeking to secure capacity on the government secured freight capacity (GSFC) to support the health and social care sector. More information will be provided when possible, including updates on the procurement timescales and when companies can expect to be able to register and access the service.

In addition, DHSC has retained its express freight service arrangements with 3 specialist logistics providers to support the urgent movement of medicines and medical products to care providers and patients if other measures experience difficulties. This service will be in place for deployment from 1 Jan 2021 as required.

Buffer stocks where possible

We encourage companies to make stockpiling a key part of contingency plans, and ask industry, where possible, to stockpile to a target level of 6 weeks’ total stock on UK soil. DHSC stands ready to support companies with their plans if required and understands that a flexible approach to preparedness may be required that considers a mixture of stockpiling and rerouting plans as necessary.

Centralised stock build

In the run-up to EU Exit, DHSC, working with NHS Supply Chain, built up a centralised stock build (CSB) of fast-moving medical devices and clinical consumables. Some of this stock remains and accounting for likely demand trends for the time of year, the DHSC plans to build these levels back up to a target level of 6 weeks’ total stock. The devolved nations of the UK may, in addition, choose to build their own stockpiles.

The UK Government also updated its guidance (for 1 Jan 2021) to healthcare providers – here.

And updated its Government contact details for medical supply businesses – here.

Border Arrangements (Kent) (Britain from 1st Jan 2021)

On 13 July the Government published its Border Operating Model – I blog posted about it at the time.

It is the responsibility of the trader (or the trader’s agent, such as a customs agent or freight forwarder) to provide the necessary documentation to the HCV driver, and it is the HCV driver who must present the documentation at the EU ports.

Being border-ready means that an HCV driver is carrying all the necessary documentation to get through the GB and EU port (or has been provided with the appropriate information to get the documentation).

This includes:

• customs documentation:

• a master or movement reference number (MRN) from an import declaration if the goods are going to stay in the country of disembarkation (for example, goods going from GB to France), or a transit accompanying document if the goods are either staying in the country of disembarkation or going to move beyond it (for example, goods going from GB to Spain via France)

• an admission temporaire/temporary admission (ATA) carnet if the goods are temporarily going abroad (for example, goods going from GB to France and then back to GB)

• a transports internationaux routiers (TIR) carnet if goods are sealed and/or going to non-Common Transit Convention (CTC) member countries (for example, GB to India overland).

• import and export documentation depending on what goods are carried (it is possible that a free trade agreement or sectoral deal may change some of the requirements for import and export documentation). For example, EU member state authorities will check for the following on arrival at the EU port:

• products of animal origin require an export health certificate

• plant and plant-based products require a phytosanitary certificate

• fish require a catch certificate, export health certificate and where appropriate a captain’s certificate.

In addition, there may be other forms of import/export documentation that an HCV driver will need to carry on behalf of their trader which would not be checked at the ports. An HCV driver using the accompanied roll on roll off (RoRo) route would need a safety and security declaration before arriving in the EU. EU rules mean that they can be completed shortly before arriving in the EU.

Some EU member states have additional national requirements for goods arriving from GB, for example:

• France requires the use of the SI Brexit system, and the MRN barcodes for multiple consignments must be compiled in to a single ‘envelope’ MRN that will be scanned.

• the Netherlands and Belgium require that all movements are pre-notified using the Portbase and RXSeaport systems respectively; HCVs that are not pre-notified will not be allowed to leave Dutch or Belgian ports.

Disruption at the cross-Channel ports from 1 Jan 2021 is not inevitable, but it is a possibility for which the UK government is preparing.

Updated assessment of potential levels of disruption is ongoing, and the UK Government is now consulting on aspects of the Border Arrangements (Kent and the Short Straits) that will need to be in place from 1st Jan 2021.

The M20 Contraflow

In 2019, there was a permanent contraflow between Junctions 8 and 9 of the London-bound carriageway of the M20 with a steel barrier between lanes 1 and 2 of the northbound carriageway. That carriageway was reduced from three to two lanes with a speed limit of 50 miles per hour when Operation Brock was inactive.

From 1st Jan 2021, Highways England will deploy instead a concrete quick moveable barrier to set up the contraflow. The moveable barrier will be ready to use in December 2020 and will enable around 2,000 HCVs to be held – the same capacity as the 2019 planned contraflow. This will be available for long-term traffic management plans and is not just a response to any cross-Channel disruption at the end of the transition period.

Kent sites and revision of traffic management plans

Goods being moved from GB to the EU must be prepared for full EU import controls from 1 January 2021.

The UK Government has announced that goods moving from the EU to GB will also be subject to third country import controls, but these checks will be phased in during the first half of 2021.

For Eurotunnel and the Port of Dover, this is likely to require new inland border control posts as there is insufficient space for the new facilities at the ports.

While the inland border control posts are intended for checks conducted by HM Revenue and Customs (HMRC) and the Department for Environment, Food & Rural Affairs (Defra) on inbound and outbound goods, they could also be used as new holding sites for outbound HCVs as part of Operation Brock (HGV traffic management system).

The UK Government has purchased a new site in Ashford to support this. Construction at the site has commenced, and it will provide approximately 2,000 HCV holding spaces. The new Ashford site is being integrated into updated traffic management plans for the end of the transition period. This overall plan is still in development and is likely also to incorporate some but not all of the other parts of the 2019 approach.

Extending the sunset clause

In Oct 2019, the Government had issued three Orders (Statutory Instruments) to give the Kent Resilience Forum the ability to create traffic restriction periods that require HCV drivers to use designated roads to reach the ports (including under specific conditions), and to follow instructions from traffic officers.

There would have been four Brock phases to handle increasing levels of congestion:

• phase 1: using the Dover Traffic Assessment Protocol (TAP 20) to hold around 500 lorries on the six-mile section of A20 leading to Dover

• phase 2: queuing on the coastbound M20 (J8-J9) with a steel barrier to create the contraflow, with all other non-freight traffic going through the M2

• phase 3: Manston Airport HCV holding facility for all Port of Dover freight (Eurotunnel freight would have continued to be held on M20 J8-J9)

• phase 4: M26 queuing system coastbound and London-bound for all Eurotunnel freight

As the current set of SIs expire on 31 December 2020, the Government proposes to extend the sunset clause to October 2021 to allow Operation Brock to continue and be enforceable in 2021.

The smart freight (SF) service

SF is an online service for the RoRo freight industry being developed by the UK Government. The service will help to simplify and automate the process of establishing the border-readiness of an HCV to help mitigate the risk of delays.

It will ask questions relating to the expected EU import controls at the border to ensure the HCV driver has the necessary documents before they travel. The service will include an online portal for registration of goods movements and an operator application to check compliance with the service.

For 1 Jan 2021, two key products are being developed to upstream the border-readiness checking process to the point of loading:

1 a web-based portal for the SF service (the ‘SF portal’) which enables the HCV driver, or someone acting on their behalf, to self-declare if they have all the documentation they need to take goods across the Short Straits

2 a mobile application (the ‘SF app’) which enables enforcement officials to confirm that a vehicle is registered on the SF portal, and to see the outcome of their self-declaration

The Government’s consultation questions are found in this document – here

DEFRA SPS standards (UK from 1st Jan 2021)

Lord Gardiner of Kimble made the following statements concerning the SPS standards regime that will operate from 1st Jan 2021 – (these statements made in the final reading of the Agriculture Bill at the House of Lords)

[note: goods placed on the NI market will need to comply with EU law where it’s listed in the Ireland/Northern Ireland Protocol]

(1) The Food Standards Agency and Food Standards Scotland will apply to imports under new free trade agreements. For example, regulated food products will need to pass the FSA’s risk analysis process before being placed on the local market. The FSA has doubled the number of risk assessors since 2017. It can draw on the expertise of 100 scientific experts and support staff and has recruited 35 additional members to its advisory committees. It has also taken wider consumer interest into account, such as the impact on the environment, animal welfare and food security, drawing on appropriate expertise and stakeholders to do so. The expertise of other government departments and agencies will be brought to bear in the risk assessment process, as required, including the Animal and Plant Health Agency and Defra officials.

(2) Equivalence will be considered by experts in the Animal and Plant Health Agency and the Food Standards Agency. The expert advice and evidence on regulated products will then be presented to Ministers and devolved Administrations for a decision on whether these products should be placed on the local market. Secondary legislation would need to be laid before Parliament to authorise new regulated products to be placed on the market.

(3) The functions of audit and inspection, currently carried out by the European Commission, will be repatriated to ensure that trading partners continue to meet local import conditions for food and feed safety, animal and plant health and animal welfare. This will include officials auditing the food production systems and rules of other countries and carrying out inspection visits to facilities in the countries themselves. Verification that requirements are being carried out as stipulated will be conducted through checks at the border. Audits will ensure that trading partners have the necessary infrastructure and regulation in place to export safe food and animal products, which either meet or exceed local import conditions, and will then ensure that these standards are maintained.

(4) The UK Government will take a science-based approach to SPS measures and take their own sovereign decisions on standards and regulations, in line with the principles of the WTO SPS agreement and other relevant internationally recognised guidance.

[Information on the WTO SPS agreement is here – note, it does not of itself set out SPS standards]

(5) Food labelling rules apply to all food intended for supply to final consumers or to caterers. Imported food needs to be fully compliant before it is placed on the local market. The name and address of the local food business, or the importer, will be required on the label from 1st Jan 2021. There are no exceptions to food labelling rules for imported food.

(6) Re Northern Ireland. The withdrawal agreement joint committee met again on 16 July and the Northern Ireland Executive representative again attended, in line with the New Decade, New Approach deal. They exchanged updates on implementation of the protocol and discussed preparatory work for future decisions.

(7) Re quotas that form part of the commitments within the UK goods schedule, which has been lodged at the WTO. The UK has already agreed a common approach with the EU to apportion EU 28 tariff-rate quotas between the UK and EU 27 in order to ensure existing trade flows are maintained. Legislation will be presented by the Treasury later this year under the Taxation (Cross-border Trade) Act 2018 to establish new tariff quotas in UK law.

(8) Re Use of gene editing. Until 2018, there was uncertainty within the EU as to whether the living products of gene editing technology should be subject to the same regulatory framework as genetically modified organisms (GMOs), because the legal definition of a GMO was open to interpretation.

In 2018, the European Court of Justice ruled that gene edited products must be treated in the same way as GMOs, even if the changes to their genetic material could have been produced by traditional methods, such as crossing varieties of the same species and selecting only the improved individuals.

The UK Government is committed to taking a more scientific approach to regulation.

Gene-edited changes to genetic material that would not arise naturally or from traditional breeding methods will still need to be regulated as genetically modified organisms. The UK Government will consult on this issue. Defra is working on the details so that a consultation can be launched in the autumn.

Further details are set out in the Hansard record – here.

EU-UK Readiness post 1st Jan 2021 (EU)

On 14th July, the European Commission published a Guidance Note “Withdrawal of the United Kingdom and EU Rules in the field of Customs, including preferential origin”.

This document (35 pages) is here.

The Guidance Note summary advice to Stakeholders –

–  consider whether they need to obtain an EORI number from an EU Member State;

–  consult their competent customs authority for further advice on their individual situation; and

–  adapt input and supply chains to take account that UK input will be non-originating for the purposes of tariff preferences with third countries.

Some points (this is not a full list, please read the document) –

(1) From 1st Jan 2021, UK EORI numbers will cease to be valid in the EU and will be invalidated in the relevant IT system EOS/EORI, including those UK EORI numbers linked to the ongoing operations covered by the Withdrawal Agreement.

Customs authorities of EU Member States should accept requests before 1st Jan 2021 and assign to them EORI numbers with the 1st Jan 2021 or thereafter as the “start day of EORI number”, according to the requests of the persons concerned.

(2) Authorisations granted by UK customs authorities are not valid in the EU from 1st Jan 2021. From 1st Jan 2021, the UK customs authorities are not an EU competent customs authority.

The UK is a Contracting Party to the Convention on a Common Transit Procedure (CTC), so from 1st Jan 2021 authorisations granted by the UK for transit simplifications are not valid in the EU Customs Decisions system, but need to be treated in the UK’s national system as a Contracting Party to the CTC. Where then the UK communicates to the Member States which of those authorisations continue to be valid within the framework of the CTC, the Member States are to accept those authorisations as valid.

(3) Authorisations granted to economic operators with UK EORI numbers are not valid in the EU from 1st Jan 2021, unless the economic operator has an establishment in the EU, has the possibility to obtain an EU EORI and to apply for an amendment of the authorisation to include the new EU EORI instead of the UK EORI number. Where an authorisation cannot be amended by replacing the UK EORI by an EU EORI, the economic operator should apply for a new authorisation with his new EU EORI.

(4) UK content (material or processing operations) is “non-originating” under EU preferential trade arrangements for the determination of the preferential origin of goods incorporating that content.

Note the specific different arrangements that apply in Northern Ireland from 1st Jan 2021.

EU-UK Readiness post 1st Jan 2021 (UK 1st Jan 2021)

Yesterday, 13 July, the UK published its Border Operating Model (206 page Policy Paper) that will apply from 1st Jan 2021 for GB trade with the EU – here.

In addition, HMRC information for traders importing or exporting goods between Britain (GB) and the EU after 1st Jan 2021 is published – here.

HMRC also has guidance on declaring goods brought into GB from the EU after 1st Jan 2021 (update from 10 July) – here.

Specific instructions –

(1) Plants and plant products (update from 10 June) – here

(2) Animals, animal products and high-risk food and feed not of animal origin (update from 10 June) – here

In addition, the Forestry Commission’s guidance on importing wood, wood products or bark from non-EU countries is updated – here.

Protocols for GB trade with NI, and NI trade with the EU (including Ireland) will be published later this month (the UK government said yesterday 13 July).

I Blog posted a few days ago on EU-UK Readiness on the EU side.

EU-UK Readiness post 1st Jan 2021 (EU 1st Jan 2021)

The European Commission published a Communication “Getting Ready for Changes. Communication on readiness at the end of the transition period between the European Union and the United Kingdom” today 9th July. This document is here.

The Communication is posted on the European Commission’s End of Transition Period Readiness Page here, where other notices, with various publication dates, are posted.

Key points in the 35 page Communication (this is not a full list):

(1) As of 1 January 2021, the European Union and the United Kingdom will be two separate regulatory and legal spaces.

(2) As of 1 January 2021, licences issued to railway undertakings by the United Kingdom will no longer be valid in the European Union, and certificates or licences issued in the United Kingdom to train drivers will no longer be valid for the operation of locomotives and trains on the EU’s railway system.

[I Blog posted recently specifically re Railways]

(3) As of 1 January 2021, air carriers holding operating licences granted by the UK licensing authority for the commercial carrying by air of passengers, mail and/or cargo, will no longer be able to provide air transport services within the European Union. EU air carriers and holders of aviation safety certificates will need to ensure, and uphold compliance with European Union requirements, including airlines’ requirements on principal place of business and EU majority ownership and control, as well as the European Union aviation safety acquis.

(4) As of 1 January 2021, road transport operators that are established in the United Kingdom will no longer hold a European Community licence. In the absence of a reciprocal access agreement, the limited quotas already available under the mechanism of the European Conference of Ministers of Transport (ECMT) will be available for EU operators to conduct journeys to the United Kingdom, and for UK operators to conduct journeys to the EU.

[I Blog posted in 2019 about this topic]

(5) As of 1 January 2021, EU REACH registrations held by manufacturers and producers established in the United Kingdom will no longer be valid in the European Union. These entities will have to ensure that their substances are registered with a manufacturer or importer in the European Union or appoint an ‘Only Representative’ in the European Union as registrant for the substance.

[A UK REACH will operate in the UK, I Blog posted about this in 2019]

(6) As of 1 January 2021, downstream users in the EU will have to check whether chemical substances they use are registered by a registrant established in the European Union. Where this is not the case, they should:

* check whether the UK registrant they deal with plans to appoint an ‘Only Representative’ in the European Union; or

* register the substance in the capacity of importer.

Re Northern Ireland specifics (this is not a full list)

(1) Checks and controls will take place on goods entering Northern Ireland from the rest of the United Kingdom, for example on food products and live animals to ensure adherence to sanitary and phytosanitary (‘SPS’) requirements. Goods leaving Northern Ireland to enter the EU must comply with EU standards and rules.

(2) EU customs duties will apply to goods entering Northern Ireland unless the Joint Committee (set up under the Ireland/Northern Ireland Protocol) sets out a framework of conditions under which these goods are considered not to be at risk of entering the EU’s Single Market. Based on such a framework, no customs duties will be payable if it can be demonstrated that goods entering Northern Ireland from the rest of the UK are not at risk of entering the EU’s Single Market.

UK Internal Market Bill (Scotland 1st Jan 2021)

The UK Internal Market Bill is not yet published. Accounts of it suggest it’s purpose is to put into law the common approaches that subsist across the UK and the Devolved Governments to food, environment and animal welfare, in the context of international trade agreements.

Presently, a concept of ‘common frameworks’ is agreed between the UK and the Devolved Governments to enable the functioning of the UK internal market (in areas that are currently governed by the European Union) from the 1st January 2021, while acknowledging policy divergence.

The Finance and Constitutional Committee (FCC) of the Scottish Parliament has been consulting on views about how the UK Internal Market might operate from 1st January 2021. This consultation closed 28th February 2020.

More details are here.

Further Blog posts will be issued in the event that the UK Internal Market Bill is progressed.