REGULATION Brexit David Wright, UKLA Director General

At the end of January the UK planned to leave the European Union and enter into a transition period ending in December 2020, during which time it would negotiate its future terms of trade with the European Union.

The transition period is the second half of the two stage negotiation between the UK and the EU to agree both the terms of withdrawal and future terms of trade. Nothing is agreed until everything is agreed and the £39bn already promised to meet the UK’s financial commitments to the region, form part of this package.

Until both the terms of withdrawal and trade can be agreed with the UK Houses of Parliament and the European Parliament, then the risk of a ‘no deal’ exit for the UK still remains a possibility.

EU Commission President von der Leyen has already raised the possibility of an extension to the transition period beyond 31st December 2020 as the timescale to agree such a comprehensive trade deal would be greatly challenging. However UK Prime Minister Johnson has already ruled this out.

If the UK were to leave the European Union without a deal, it would revert to a temporary tariff schedule until bilateral free trade agreements could be put in place. The schedule would last for a period of up to two years and ensure the majority of imports to the UK remained tariff free.

However the common external EU tariff would continue to apply to the export of goods from the UK to the EU in the event of a no deal, until agreement could be reached. The schedule is available at rates-of-customs-duty-on-imports-after-eu-exit

During the transition period the UK will continue to abide by EU regulations and be a member of the customs union and single market, even though technically it has left the European Union. So over the short-term, until 31st December 2020, little might change. The situation after the 31st December 2020 however remains uncertain.

Immediately following the UK general election, French President Macron said that he hoped the UK would be a good neighbour. The spectre of the UK transforming itself into a low regulation and low tax economy along the lines of Singapore, located just off the coast of mainland Europe is still a concern for Brussels.

Specific guidance for the chemical sector in the event of a ‘no deal’, of which petrochemicals and more specifically lubricants are a part, has been produced by the UK Government and can be found at sector-and-preparing-for-eu-exit

The UK regulator, the Health & Safety Executive (HSE), has produced guidance on chemical regulation for UK businesses working in the supply chain. The principles of chemical regulation and the regulation as they specifically apply to chemicals through REACH, CLP and BPR for example, will not change immediately post Brexit, although arrangements for the administration of these regulations will need to change. The guidance can be found at chemicals-brexit-guidance.htm

Guidance from the European Chemicals Agency (ECHA) about chemicals regulation for companies in both the UK and European supply chains has also been issued, and can be accessed at uk-withdrawal-from-the-eu





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