How many representatives do you need in post Brexit UK?

12th January 2021

As a newly third country in relation to the EU (and EEA) marketplace, UK businesses trading in the EEA or selling to EEA customers will need to familiarise themselves with the requirements for certain representatives.

Since many UK businesses will not have these representatives in place, but the European Commission will not focus on pursuing UK businesses immediately. But the EU compliance requirements remain and in time will be enforced, especially for the benefit of consumers’ rights and protection.

Given the number of representatives that this non-exhaustive list includes, UK businesses should consider the need for representation generally and unite a number of roles into one or establish a small legal entity within the EEA to ensure compliance.

Authorised representatives

For 16 July this year,  economic operators (manufacturers, importers, authorized representatives, or fulfilment service providers) must ensure products placed on the EU market are compliant with European requirements related to the protection of health and safety of workers and of consumers and to the protection of environment. This is required by Market Surveillance Regs 2019/1020.

Businesses not established in the EEA and selling products on the EEA market directly or through importers/distributors, should appoint an authorised representative based in the EEA, whose role is to cooperate with market surveillance authorities.

The appointment of an authorised representative (AR) is optional unless the goods are CE marked, in which case an economic operator must be appointed in the EEA, usually taking the form of an AR.

The AR should hold technical documentation about the (CE marked) product and should be familiar with the technical detail relating to the product, as they may be required to give explanations or provide facts, information or documents relating to the subject matter of an on-site inspection by a surveillance authority, regarding a product’s compliance with EU harmonisation legislation.

The role of the authorised representative is also to cooperate with market surveillance authorities in making sure that immediate corrective action is taken to remedy instances of non-compliance.

ARs who have been established in the UK for the purposes of other third countries businesses to trade into the EEA prior to Brexit, will no longer be recognised under EU law and will need to be established in the EU. (Similarly, UK certification marks will no longer be valid in the EEA and separate CE mark certification should be sought from an authority based in the EEA. At the present time, a UK certified product should be able to obtain the CE marking on production of the UK certification rather than be retested.)

Fiscal representative

In addition, UK businesses now selling products in the EU (this is not necessarily the manufacturer, but possibly the importer) is likely to need to appoint a local fiscal representative (FR) in most national territories of the EEA, and may also need to provide advance payments to VAT authorities in the relevant national territories (this varies from territory to territory).

This is necessary because being UK VAT registered is no longer equivalent to an EEA based VAT registration, nor compliant with the EEA regulations. The role of the FR is to assist with VAT return submissions and act as a point of contact for the tax authority in that country. In some circumstances it might be desirable to have the same party appointed as both the fiscal representative and the appointed representative.

Product liability requirements

Since 1 January, UK manufactured products placed on the EU market have been considered imports into the EU. While the EU regulations on product liability do not apply to the UK, the regulations will still apply to products sold to the EEA market in protection of the EEA consumers.

Distributors who sell products bearing the CE marking on the EU market will be treated as importers (if they import the goods onto the EU market) subject to importers’ obligations, equivalent to the general EU product liability and consumer protection.

Product liability in the EU sits not only with the original manufacturer but, if they cannot be traced or held accountable, the liability follows the chain of distribution. So, it is important for importers to be aware that they will need to ensure compliance with the following obligations (and may wish to pass these down to the manufacturer contractually for assurance):

  • the correct labelling of all goods (goods must be labelled with the importer’s/distributor’s address as well as the UK manufacturer’s details or those of its EU, EEA or Northern Ireland based authorised representative)
  • the correct EU authority conformity assessment procedures have been carried out and the goods have the correct conformity markings (including chemical or other technical information) affixed to them
  • the manufacturer has drawn up the correct technical documentation and complied with the applicable labelling requirements
  • the importer/distributor maintains a copy of the declaration of conformity for a period of 10 years
  • the goods conform with the relevant essential requirements.

Manufacturers should arrange for their UK certification information to be transferred to an EU-based certification authority to allow for UK certificates of conformity to be exchanged for EU mark certification, to prepare for sale in EEA markets.

Customs and import obligations

Importers introducing UK goods onto the EU market are now subject to different obligations in respect of customs and import. From now on:

  • the shipment of certain goods between EU member states and the UK require import/export licences
  • import/export licences issued by the UK are not valid for shipments to the EU from third countries or vice versa
  • in the absence of agreement to the contrary, UK businesses have to apply customs, excise and VAT procedures to goods traded with the EU, in broadly the same way that already applies for goods traded outside of the EU.

A business may appoint a third party to provide the customs services, although there is no obligation to appoint a representative.

GDPR representative

Finally, the GDPR also requires those businesses who collect personal data from EEA-based customers to have an “establishment” or a representative in the EEA (article 27 GDPR), where the establishment or representative must be located in one of the territories in which those customers (data subjects) reside.