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January 14, 2019

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Brexit

Brexit and UK fire exports: Hazards on the roadmap ahead

Hunter Seymour, security market analyst with expertise in both the fire and security markets, looks into how Brexit could affect the UK fire industry for our sister site, IFSEC Global.

brexit-fire-sign

“If we walk away the EU will come to us, because they want to export all their products to us,” Sir James Dyson said last year.

Unfazed by Brexit, he added: “Europe is only 15% of global trade so we’ve got the opportunity to export globally.”

Except: the devil’s in the detail. For when you consider the implications for the UK fire sector and its relations with the European Union, it would be an understatement to suggest the Brexit roadmap is clouded by myriad, labyrinthine legal grey areas.

Industry insiders have sought to predict with clarity and diligence the likely outcomes, particularly on critical issues like the role of notified bodies in CPR (Construction Products Regulation) certification for the EU and how Brexit could adversely affect the acceptance of UK products.

Certification conundrum

Crucially, the recertification of products to accord with future EU regulatory criteria suggests high cost penalties for UK businesses, disrupting product distribution from the UK. And the conundrum persists as to how to maintain CE-marking post-Brexit supported by its associated Declaration of Performance (DoP) applicable to the European Economic Area’s single market.

Accordingly, in the recent FPA (Fire Protection Association) Fire Sector Summit, Paul Pope, an FIA Director, summarised the implications for UK notified bodies when no longer part of the EU: “Currently there are 189 UK EU notified bodies, employing 4,500 people, with 20,000 customers and generating approximately £2bn per annum.” Their futures are profoundly contingent on post-Brexit outcomes.

Time-limited period after exit day

The post-Brexit pitfalls were further explored at the seminar. So far as current EU compliance within the UK is concerned, “products that meet EU regulations and directives can continue to be placed on the UK market providing that they have demonstrated compliance with EU requirements after exit day. This will apply for a time-limited period and sufficient notice will be given.

“UK-based notified bodies will become UK-approved bodies after 29 March 2019 and will be listed on a new UK database.” Manufacturers will then be able to affix a new UK conformity mark before placing a product on the UK market.

But essentially, for UK notified bodies, in the absence of any transitional agreement, the problem of nominally negated EU-originated certification after 11pm on 29 March 2019 means that products cannot continue to be placed on the EU market.

It may be, then, that limited solutions to these problems must be expeditiously practicable – namely: products tested by a UK-based notified body will need to be retested and/or recertified by an EU notified body before being placed on the EU market, with manufacturers transferring files and certificates to (what may be termed as) the surrogate EU assessor.

The cost of surrogate EU conformity

If Brexit is triggered, however, a ‘transition’ period will be effective until 31 December 2020, when new post-Brexit rules between the UK and EU begin. In anticipation of this target date, therefore, we can foresee that UK products and their documentation would need to be re-marked for CE (Conformité Européene) with a new surrogate, the EU-notified body’s four-digit number certification marks (eg VdS Vertrauen durch Sicherheit, NF Norme Française, et al).

When UK notified bodies lose their status as EU notified bodies, therefore, the concomitant costs for this reduplicated surrogate process for certification by a notified body in one of the EU 27 states could be prohibitively costly and severely protracted.

For example, Switzerland has a hybrid MRA (mutual recognition agreement) for some product groups and for these, where conformity assessment is deemed equivalent, EU type approvals can be recognised as proving conformity with Swiss regulation (and vice versa).

But such agreements require extensive maintenance, with any ongoing changes only achievable via the bureaucracy of new EU equivalence assessments by the EU regulators and MRA governing body conceding possible amendment.

Indeed, in attempting to resolve such an impasse, an observable trend to re-domicile notified bodies to EU countries has begun. For example, the Building Research Establishment has established operations in Dublin, and the British Standards Institution in the Netherlands.

The BSI has decided that, in addition to its existing accreditation, it will be in the interests of its clients to expand their notified body status. Therefore they have formally applied to the Dutch Accreditation Council (RVA) for accreditation of BSI’s Netherlands business.

At the recent FPA seminar, Howard Passey, Principal Consultant at the FPA, addressed many of these continuing concerns. He highlighted the need for thorough review of retained legislation to ensure that the new relationship with the EU is clear, and to put into effect the appointment and oversight of new regulators to replace the EU ones.

Making changes, Passey cautions, may have an unravelling effect that will impact far more widely than can be initially considered. Effective surveillance from the fire protection sector will be essential to anticipate and mitigate risks of such divergence.

He warns that, when retained legislation starts to diverge from EU laws, EU prerogatives could be invoked to restrict our ability to trade with the single market.

Unwelcome comebacks

Anthony Burd, Head of Built Environment at the BSI, also outlined for the FPA the principal unwelcome comebacks from leaving the EU. At stake, he reminds the fire sector, are the current ‘good practice’ benefits of EU membership: recognised means of legal compliance; supply chain confidence; common interoperability within the EU; support for consumer protection; and lower production costs.

Here Burd gives us the European perspective on certification: “95% of British Standards, year on year, are European and international, while over half of the national catalogue has been through CEN and CENELEC processes.”

Regulatory cooperation

Meanwhile, the UK government (see the government report The Future Relationship between the United Kingdom and the European Union) maintains that to “ensure the future relationship is administered effectively, the UK and the EU will need to agree arrangements for regulatory cooperation.” In principle this means “an upfront choice to maintain a common rulebook with the EU” and “a recognition that some rules are equivalent.”

That some rules are ‘equivalent’ will undoubtedly be the sticking point in achieving ‘regulatory cooperation’ to maintain unfettered access to the EU single market – why else are forebodings on the question of EU conformity still dominating the agenda for UK notified bodies?

Mutual recognition agreements

BrexitThe oft-debated solution to ‘equivalence’ of certification suggested by MRAs (mutual recognition agreements) still remains (as of writing) for government to negotiate, with an objective that would enable products to be certificated with one set of approvals and authorisations applicable to either market before being sold in both.

As it is, industry insiders continue to speculate on the idea of importers in the EU conducting ‘self-certification’ in arrangements between a UK consignor and EU consignee that would recognise EU compliance (from a foothold within the EU) to optimise the flow of their supply-chain. (This pragmatic suggestion is merely a whisper from a UK exporter and only one of many radical solutions that may emerge.)

Whether the UK Government’s post-Brexit transition agreement will achieve mutual recognition with the practicality and pragmatism expected by industry insiders instanced above remains unclear.

The official view

When challenged on the restricted information available on the progress of mutual recognition policies as practical measures to ease trade with the EU, the DExEU (Department for Exiting the European Union), alludes more to aspirations than ironclad answers.

The DExEU recently claimed, for example: “The government published its political declaration last November which outlined the EU and the UK’s commitment to a free trade area for goods, with no tariffs and no quotas, combining deep regulatory and customs cooperation and underpinned by provisions ensuring open and fair competition.”

But here’s the rub. Within Whitehall legalese of the ‘declaration’ there is identifiably wriggle room for the EU to reject the transitional regulatory harmonisation proposed and regard MRAs as aspirational rather than fully implementable.

Wriggle room for a one-way street

Just examine closely Articles 40 and 41 of the declaration.

‘Goods Placed on the Market’ (including services within Definitions ‘h’ and ‘I’, ‘conformity assessment body’ and ‘notified body’), which states that [such services] “lawfully placed on the market in the Union or the United Kingdom before the end of the transition period” may circulate within the two markets [with the proviso] that such a circulation “shall be without prejudice to the possibility for the United Kingdom, a Member State or the Union to take measures to prohibit or restrict the making available on its market [such defined services] where and to the extent permitted by Union law.”

It’s quite easy to see how this could turn out to be a one-way street.

CEN and CENELEC continuity

However, a solution has been proposed for continued engagement with EU policymakers from a foothold within the single market. The BSI recently announced the retention of its status as a leading participant in shaping and maintaining best practice standards applied across Europe and internationally.

With regard to the European Standards Organisations CEN and CENELEC, their general assemblies have approved a plan that secures BSI’s full membership post-Brexit. The UK thus retains influence over and benefits from the content of voluntary standards that support trade across 34 European member countries.

BSI is a member of the IEC, ISO, CEN and CENELEC, ensuring UK specialist involvement at all stages of the development process for European standards.

Consensus positions from British stakeholders are fed into European and international committees, allowing reciprocal market access that underpins over 28% of annual UK GDP growth. Existing harmonised standards (used to demonstrate conformity with EU essential requirements) will become UK ‘designated standards’.

The MTA (Manufacturing Technologies Association) currently states: “We were pleased that the UK retained, through BSI, its place in CEN and therefore in the most important international body that sets standards for our sector.

“Any Brexit deal needs to take into account the realities of international trade – that major markets define needs – and the realities of the UK’s economy: that it is bound up in the EU’s market.”

How this ‘deal’ will be pledged in practice, only the ‘business realities’ of a UK manufacturer of fire safety products, stranded in the present no-man’s land of stalled EU trade, can tell us the truth.

Therefore, the impact of Brexit in the views of UK manufacturers in the firing line is the subject of our next article in this two-part series.

Ian Moore, CEO of the Fire Industry Association, is deserving of readers’ thanks for his organisation’s continuing monitoring of the impact of Brexit on the UK fire industry, and for permission to publish selective quotation from the FPA Summit.

This article was originally published on our sister site, IFSEC Global.

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