While uncertainty remains about the terms and indeed the exact date by which the UK will leave the European Union, US companies that export electronic products to the EU and the UK marked with the "CE" symbol for EU conformity need to be aware of the impact that the UK's exit will have on equipment authorization routes where an external body (termed a Notified Body in the EU regulations) is involved in the equipment authorization process. Importantly, the UK's exit from the EU will impact who can assess products for conformity with the EU's technical standards before the CE mark can be affixed to the product. This is the case in both a deal and no-deal scenario.
This change affects all types of electronic products regulated under the EU analogues to the FCC's equipment authorization rules – the Radio Equipment Directive (RED), the Low Voltage Directive (LVD) and the Electromagnetic Compatibility Directive (EMCD), among others, in cases where manufacturers do not make a self-declaration of compliance with the Directives, but involve an external Notified Body to perform the assessment. In this alert, we outline the changes applicable to all three of these Directives. Where manufacturers self-assess the products for conformity, with no Notified Body involvement at all, the self-assessment route can still be followed for both EU and UK purposes with no change required, except for the application of a new "UKCA" mark (the UK's answer to the CE mark) for products sold in the UK.
The Current Deal Scenario
If a deal is struck that reflects the terms of the current draft Withdrawal Agreement, then any products which have already been assessed by a Notified Body, CE marked and placed in the EU market immediately prior to the end of the transition period (currently December 31, 2020) will not be affected and can continue to be marketed in both the UK and the EU. There will no requirement for these products to be reassessed or re-labelled in any way.
However, after the end of the 2020 transition period, the UK's Notified Bodies will lose their status in the EU. In other words, UK Notified Bodies will no longer be authorized to assess whether products conform to EU standards or determine that a product may be CE marked. The Withdrawal Agreement does include a provision that allows the file and certificates of products assessed by a UK Notified Body for EU conformity to be transferred to an EU-27 Notified Body before the transition end date so that fresh EU-valid certificates can be issued and products marked with the new Notified Body's identification number. If that is done, then again, no further re-labelling or repetition of compliance or conformity assessment activity would be required.
If that's not complicated enough, where things get really tricky is in the differing positions of the EU and UK in the no-deal scenario.
The No-Deal Scenario – the EU's Position
The EU's latest position if there is no deal is that UK Notified Bodies will lose their status immediately after the exact time that the UK leaves the EU. At that point, certificates issued by UK bodies will no longer be valid, unless the product in question has already been placed on the market. In other words, any products not in the EU market by the exit date will need to be re-assessed by an EU-27 Notified Body and certified as compliant before they can be CE marked and placed in the market. Alternatively, the file and certificate can be transferred to an EU Notified Body so that fresh valid certificates can be issued and products re-marked with the new Notified Body's number.
The No-Deal Scenario – the UK's Position
According to a Technical Notice published by the UK Government in February, the related "New Approach Directive" regulations passed by Parliament applicable to products required to be CE-marked, and follow-on guidance from the UK Office for Product Safety and Standards, in a no-deal Brexit, goods already placed in the EU market can continue to be marketed in the UK post-Brexit.
In addition, goods that meet EU requirements, have been tested by an EU-27 recognized Notified Body and are CE-marked can also still be placed in the UK market post-exit. Where the CE marking is currently used as the basis of self-declaration, then during a to-be-determined transition time period, manufacturers will be able to use either the UK or CE marking or both for the UK market. The UK Government has indicated that it will consult with businesses in terms of the length of the transition period and that further legislation will be required to establish its precise length. On the other hand, products being sold on the EU market will continue to require CE marking.
A new UK Conformity Assessed or UKCA marking is also being introduced as the new UK mark that will replace the CE marking in the UK market. As noted, during the transition period, manufacturers can choose to continue to rely on compliance with EU law and the CE mark for products to be marketed in the UK, rather than using the UKCA mark. If a company does choose to use the UKCA marking during the transition period, then the product's EU Declaration of Conformity will need to be replaced by the UK Declaration of Conformity, essentially meaning that references to the relevant EC Directives will need to be replaced with the relevant UK Regulations.
After exit day, all existing UK Notified Bodies will become UK Approved Bodies, and then, the UKCA marking must be used if conformity assessment is carried out by the UK-based Approved Body. And if a manufacturer intends to continue to rely on conformity assessment carried out by a UK-based Approved Body without transferring their files to an EU-recognized equivalent, then a new UKCA marking will be required for the UK market instead of the CE marking after exit day. This will not be the case if the certificate of conformity and assessment file has been transferred to an EU-recognized Notified Body. In that case, the CE marking will be accepted in the UK. The CE marking will of course still be required to enable products to be sold in the EU.
From a substantive standpoint, existing harmonized standards (used to demonstrate conformity with EU essential requirements in the Directives) will become UK 'designated standards'. The UK is expected to publish a full list of the references of UK designated standards, which immediately following exit will be identical to the current EU harmonized standards. In other words, from a substantive standpoint, little will change. At the point of exit, the UK-designated standards will be the same as the EU harmonized standards, so there will be no change to the actual technical requirements for products to meet.
The US-UK Mutual Recognition Agreement of February 2019
As a final note, the UK and US signed a Mutual Recognition Agreement in February, which replicates the provisions of the current EU-US MRA covering mutual recognition of equipment authorization testing under FCC rules and the EU testing regime. The UK-US Agreement is designed to preserve the current status quo in the event of a no-deal scenario or at the end of any transition period agreed with the EU. Essentially, US electronic products certified as being tested against the UK's regulatory requirements by an accredited US Conformity Assessment Body will be recognized by the UK's Approved Bodies and vice versa, and as of now, no further testing will be required.
Key Points to Note
Whether or not the UK leaves the EU with a deal, if a US company currently uses a UK Notified Body for conformity assessment then it should consider taking steps to move its certification arrangements to an alternative EU-27 Notified Body. There is a central EU database, Nando, which provides details of Notified Bodies recognized by the EU for the purposes of conformity assessment with each specific EU Directive.
If certification is carried out by an EU-27 Notified body, then in the event of a no-deal, CE-marked products can continue to be sold in both the UK and EU with no change to the conformity assessment procedures. There will be no immediate requirement to include the UKCA mark for products to be sold in the UK. The government is expected to consult businesses on when the requirement to use the UKCA mark will come into effect. We expect that to be at least 12 months post exit-day.
Where certification is done post-exit by a UK Approved Body, then the new UKCA mark must be affixed to the product, rather than the CE mark for products to be placed in the UK market. EU Certification and CE marking will, of course, continue to be required for products to be placed in the EU market.
The good news is that in either a deal or no-deal scenario, the overall conformity assessment process remains the same as now. There will be no change to the technical requirements for products to meet. The UK's designated product standards will be the same as the EU harmonized standards so that a single standards model remains in place.
In addition, the Mutual Recognition Agreement between the UK and US means that the current status quo with the EU will remain in place – electronics equipment tested and certified by US accredited Conformity Assessment Bodies to be in conformity with the relevant UK Regulations will be recognized by UK Approved Bodies, so that no further testing is required prior to affixing the UKCA mark. The EU Mutual Recognition Agreement remains in place where products are to be CE-marked.
While the position on Brexit remains uncertain, US manufacturers of electronics equipment requiring equipment authorization should continue to consider the implications on their product and supply chains to ensure that their product compliance assessment process is clear and to plan for any operational changes that may be necessary. Our UK and US equipment authorization teams are actively advising businesses on the impact of these changes and what steps should be taken both now and longer-term, to assist clients in working through these issues.
1 An EU-27 Notified Body refers to a Notified Body in one of the 27 Member States remaining in the EU after the UK's departure.