The Brexit and its Meaning for BIORIUS’ Clients

Update

March 30th, 2017

You may know that Theresa May, Prime Minister of the UK, triggered Article 50 of the Treaty of Lisbon yesterday at 1:30pm. Sir Tim Barrow, the UK’s permanent representative in Brussels, personally handed over the official letter to the European Council president, Donald Tusk. Today, the clock begins ticking on two years of talks regarding the terms of withdrawal allowed under Article 50.

Many events occurred since our information letter of June 2016 and the regulatory situation appears more uncertain than a few months ago. A lot of points still need to be clarified but BIORIUS follows this topic very closely and will keep you updated. In parallel, BIORIUS is currently developing solutions to make this Brexit as smooth as possible for its cosmetic brands.

A number of new facts can be presented at this stage:

  • A hard Brexit is expected: the UK will leave the internal market of the EU and stop applying the EU legislation. A Norway-like situation (not member of the EU but part of the internal market and complying with the EU legislation) has very little chance to take place.
  • A Responsible Person will have to be appointed in the UK in addition to your EU Responsible Person. BIORIUS is working on a technical solution to also become your UK Responsible Person in the near future.
  • Conversely, a new Responsible Person will have to be appointed in the EU in case your current EU Responsible Person is located in the UK. Likewise, BIORIUS can be considered as a suitable solution.
  • New commerce agreements will have to be established and Theresa May warned that “no deal for Britain is better than a bad deal”.
  • No commerce discussions will be held between the UK and the EU until three bones of contention are resolved: the border between Northern Ireland (UK) and the Republic of Ireland (EU), the status and rights of EU citizens living in the UK and the guarantee that UK will meet the financial commitments made before the Brexit.
  • Although it exists a mechanism permitting the prolongation of the negotiation, it is expected that the UK will be out of the EU by end of March 2019.

In two years, the European Communities Act (1972), which provides the supremacy of the EU law, will be repealed by the UK Parliament and the EU Cosmetics Regulation will immediately stop applying. BIORIUS expects that the EU Cosmetics Regulation will be converted into domestic law. Independent from the EU legislation, it is impossible to determine today whether this text would continue to follow the developments of the EU Cosmetics Regulation or live its own life.

These uncertaintiesis a problem for the UK CosmeticsIndustry (CTPA), which wrote a position paper titled “Getting the best from Brexit”. In this paper sent to the UK Government, CTPA requires three guarantees to reduce the business risk of its industry:

  • Remain in the Customs Union until a Free Trade Agreement with the EU is reached.
  • Provide a clear and reasonable phased implementation for changes to UK/EU trade.
  • Cooperate with the EU Authorities after the Brexit for consistent regulatory developments.

We hope that CTPA will manage to get its concerns heard by the UK Government.

Finally, attention should be paid to the collateral damages caused by the Brexit as some parts of the UK wanted to stay in the EU. This is particularly true for Scotland and their Regional Parliament voted yesterday the project of a new referendum on the independence of Scotland. This referendum will probably take place end of 2018, namely once the UK and the EU are more advanced in the negotiations.

Any questions?

The Brexit situation

June 24th, 2016

As you may already know, a referendum was held yesterday in United Kingdom to determine whether the country should leave the European Union or remain one of its Member States. This referendum resulted in an overall vote to leave the EU, by 51.9% to 48.1%. BIORIUS evaluated the impact of this Brexit and can reassure its clients that this political decision should have almost no impact on the regulatory evaluation of their cosmetic products.

What is going to happen now?

The referendum result is not legally binding and the UK Parliament still has to pass the laws that will get Britain out of the 28 nation bloc, starting with the repeal of the 1972 European Communities Act. Technically, Members of the UK Parliament could ignore the results of this referendum and block an EU exit but this would be regarded as a political suicide and this scenario is unlikely to occur.

As provided for in Article 50 of the Lisbon Treaty regulating the functioning of the EU, a Member State can decide to leave the European Union and the exit setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union, has to be negotiated. The Treaties shall cease to apply to United Kingdom from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification of exit. In the meantime all the EU Regulations will continue to apply to this country.

Will it change something to the regulatory evaluation of our products?

Although United Kingdom leaves the European Union, it will most likely join the European Free Trade Association (EFTA, currently composed of Iceland, Lichtenstein, Norway and Switzerland), which participates in the EU’s single market. All in all, the EU Cosmetics Regulation should continue to apply in the UK and mainly or even completely in its existing form. The only real change concern the legal representation of your products as a Responsible Person located in the UK will have to be appointed. BIORIUS has already identified several effective solutions and will come back to you with more information as things settle down.