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HCR Law Events

19 July 2021

Regulatory law update: CE/UKCA marking and Q&A

Birmingham and the wider region has a rich manufacturing heritage and the region continues to thrive as a centre of excellence in manufacturing and engineering. With this in mind there are some important changes on the horizon that may affect those business who deal with CE marked products coming from the EU or their parent or subsidiary companies based in the EU.

 

The current marking position

The UKCA came into effect on 1 January 2021. Products that have been fully manufactured before 31 December 2020 and CE marked can still be placed on the GB market after 1 January 2021 (even if they should bear the UKCA mark), as long as they are from that pre-existing stock.

Similarly, CE marked products can still be sold in Great Britain until 1 January 2022 if the following does not apply:

  • it is covered by legislation which requires the UKCA marking
  • it requires mandatory third-party conformity assessment (as opposed to self-declaration)
  • a conformity assessment of the product has been carried out by a UK-based conformity assessment body and conformity assessment files have not been transferred from the UK body to an EU-based body before 1 January 2021.

 

Upcoming changes – what do you need to do?

From 1 January 2022, you will need to:

  • Produce a dedicated declaration of conformity (and/or incorporation) for UKCA marking, so if the product is also CE marked there will be at least two versions of these declarations.
  • Find and engage with a UK-based conformity assessment body.
  • Apply a UKCA sticker and/or label on your product (or the accompanying document)

From 1 January 2023, you will need to:

  • Affix the UKCA mark directly to the product (as opposed to supporting packaging or documentation). This is an important change that may require alterations in product design and labelling.

 

Current guidance and key definitions

The current guidance provided on gov.uk states:

A fully manufactured (individual) good is ‘placed on the market’ when a written or verbal agreement (or offer of an agreement) to transfer ownership or possession or other property rights in the product is exchanged. This does not require physical transfer of the good.

The older guidance published on gov.uk before the EU-UK Trade Deal states:

Placing a product on the market supposes that there is an offer or an agreement (written or verbal) for the transfer of ownership, possession or any other kind of right (excluding intellectual property rights) concerning the product in question after the manufacturing stage has taken place. It does not require physical delivery of the product. This concept of ‘placing on the market’ will stay the same in UK law if the UK leaves the EU without a deal.

If there is an offer or agreement for the transfer of ownership or possession (or other right in the product) between the manufacturer and its UK subsidiary, then the date the product is placed on the market will be the date of that transaction.

The ‘Blue Guide’ on the implementation of EU product rules 2016 provides that:

Placing on the market means the “first making available on the market” (by the manufacturer or the importer).

The operation is reserved either for a manufacturer or an importer, i.e. the manufacturer and the importer are the only economic operators who place products on the market.

When a manufacturer or an importer supplies a product to a distributor or an end-user for the first time, the operation is always labelled in legal terms as ‘placing on the market’. Any subsequent operation, for instance, from a distributor to distributor or from a distributor to an end-user is defined as making available.

NB Placing on the market is considered not to take place where a product is (amongst other things) manufactured in a member state with a view to exporting it to a third country (this includes components supplied to a manufacturer for incorporation into a final product to be exported into a third country).

Whilst this is important to note, reciprocal arrangements (by virtue of the UKCA mark) and domestic guidance will apply. So, whilst the goods are manufactured in an EU member state and are then exported to the UK (a third country), technically, it may not be ‘placed on the market’ for the purposes of the Blue Guide.

‘Making available on the market’ means “any supply of a product for distribution, consumption, or use on the […] market in the course of a commercial activity, whether in return for payment or free of charge

Such supply includes any offer for distribution, consumption or use on the EU market which could result in actual supply (e.g. an invitation to purchase, advertising campaigns).

The concept refers to each individual product, not to a type of product, and whether it was manufactured as an individual unit or in series.

The making available of a product supposes an offer or an agreement (written or verbal) between two or more legal or natural persons for the transfer of ownership, possession or any other right concerning the product in question after the stage of manufacture has taken place. The transfer does not necessarily require the physical handover of the product.

This transfer can be for payment or free of charge, and it can be based on any type of legal instrument. Thus, a transfer of a product is considered to have taken place, for instance, in the circumstances of sale, loan, hire, leasing and gift.

Transfer of ownership implies that the product is intended to be placed at the disposal of another legal or natural person.

 

Regulatory law Q & A

Is it lawful to place X number of CE marked units with identifiable batch/bar codes onto the GB market prior to/or on 31 December 2021 and for them to be sold in 2022 as CE marked goods and not UKCA marked?

  • It would be lawful for those very same batch/bar coded CE marked units to be sold from 1 January 2022 because they have been placed on the market prior to the end of the transition period.
  • It must be the case that an individual product/unit that is circulating lawfully on the GB market prior to the end of the transition period requires no additional marking.
  • Similarly, if you have sold goods to a retailer, which have been placed on the market and lawfully CE marked prior to the end of the transition period those items will not require to be retrospectively UKCA marked.
  • Indeed, there is no retrospective application of the UKCA mark – it is forward looking only.

But be aware that some local trading standards enforcement officers are stating that from 31 December 2021 the CE marked stock that companies have can no longer be sold.

This is contrary to our interpretation of the guidance as it stands – but I expect that the confusion will mean some trading standards officers will seek to take enforcement action early in 2022.

At which point are the goods classed as ‘on the market’ and thus requiring the UKCA mark? Is this at the point that they are received in GB, or is it when there is a contract with a customer, or some other point?

  • The Blue Guide and the UKCA guidance are both consistent in approach, in that a product is placed on the market when there is an agreement (or offer of an agreement) to transfer legal ownership from one party to another.
  • The inconsistency lies in products made in the EU for a third country.
  • For present purposes we will assume that the goods are placed on the market as soon as legal ownership in them is agreed to be passed from manufacturer to customer. This is the case if the goods are in fact already in the UK in a fulfilment warehouse.

If goods are not already ‘on the market’, is there a legal mechanism which could mean that goods could be held for the GB market and be classed as ‘on the market’?

  • There may be occasions when your EU counterpart will ship goods to be stored in a GB fulfilment warehouse ready for immediate onward despatch once a customer order has been received by you.
  • A simple agreement/order form and confirmation to transfer legal ownership of certain goods from the EU entity to you would suffice, as there is not the requirement for a physical transfer.

Are you as the importer responsible for placing the goods on the GB market or is the EU manufacturer also responsible for placing goods on the market?

  • Goods can only be ‘placed on the market’ by either the manufacturer or the importer.
    • In this instance it may depend if the EU entity is storing goods in a warehouse prior to legal transfer when it is likely to have placed the goods on the market as the manufacturer or if you will then be making the goods available to customers.

Is the marking position different if you sell into Northern Ireland?

  • The UKCA marking applies only to England, Wales, and Scotland.
  • The Northern Ireland Protocol came into force on 1 January 2021. For as long as it is in force, Northern Ireland will align with relevant EU rules relating to the placing on the market of manufactured goods.
  • In Northern Ireland, CE conformity markings continue to be used to show that goods meet EU rules.
  • If the goods are placed on the NI market and they have been assessed by an EU conformity assessment body, then the CE mark is acceptable on its own.
  • If the goods are placed on the NI market and they have been assessed by a UK based assessment body, then the UKNI and CE mark should be used in combination.
  • As matters stand, the goods can be sold and placed into the NI market with no alterations having to be made with regards to marking.

 

Manufacturers will now have until 1 January 2023 to start using the new UKCA Conformity Assessed product safety mark.  In our briefing note earlier this we stated that the new UKCA mark would be required to be used from 1 January 2022 as mandated by the government.  However, the government announced on 24 August 2021 a further 12 month delay to allow business to become ready for the new marking regime.

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About the Author
Kamal Chauhan, Partner

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