Cost-increasing tariffs and delays at ports are not the only headaches facing the construction sector as a result of Brexit.
A recent Brexit information briefing for the construction sector organised by the National Standards Authority of Ireland and the Department of Housing, Planning and Local Government heard that the issue of certification could pose even greater challenges and severe disruption to supply chains if not addressed in a timely fashion.
Compliance and Regulations
For manufacturers and distributors of all types of products looking to enter the European market, it can sometimes feel like there is so much to know about compliance, standards and expectations inside the EU. The ‘New Approach Directives’ were adopted in 1985 to ensure product safety and consumer and manufacturer protection. The directives set out the requirement of a CE Mark (for products) and an Authorized Body (for manufacturers).
The CE Mark is critically important. This certification mark indicates conformity with health, safety, and environmental protection standards and allows products to be sold without restriction within the European Economic Area (EEA). By CE marking a product, a manufacturer is confirming that the performance of the product they are selling is the same as what they are declaring and that it has been obtained using the right European technical specification. It should be noted that the CE mark is not evidence of compliance or that it meets the Building Regulations.
The Construction Industry
The relevant EU regulation for Construction Products is Regulation (EU) No 305/2011 – Construction products (‘CPR’). The introduction of the ‘CPR’ was to overcome the technical barriers to trade which arise where different countries in Europe have different standards, testing and labelling approaches for the same construction products. CE Marking is mandatory for any construction product covered by harmonised European Standards which is placed on the EU market.
Many Irish construction products could lose their CE Mark following Britain’s departure from the EU, while imports could also be disrupted as a result of products originating in the UK and other countries losing their marking
This situation arises because of the very close interrelationship between the two islands when it comes to all aspects of trade. Fergal O’Byrne, Head of the NSAI Brexit Unit, explained that many Irish exporters actually have their products certified by UK bodies under current arrangements, but this will no longer be possible after Brexit. Post-Brexit, UK will become a third country and UK Notified Bodies will lose their status as EU Notified Bodies. These “Notified Bodies” assess the conformity of products before they can be placed on the EU market. Once approved by the Notified Body, the CE Mark can be affixed to them. At present, there are 1500 Notified Bodies (NBs) in the EU, 174 operating in the UK including 50 NBs for Construction and only 9 NBs in Ireland 3 of which are NSAI. NSAI is a Notified Body for Construction Products, Medical Devices and Non-Automatic Weighing Scales.
Products which currently rely on a UK Notified Body for CE marking will no longer be able to be placed on the EU market.
“Irish exporters have relied heavily on UK bodies up until now,” O’Byrne noted. “Those entities will automatically lose their designation as Notified Bodies once the UK leaves the EU. If you are relying on a UK Notified Body, you will have to find an alternative before you can continue exporting to EU countries.”
And, in another one of those strange conundrums thrown up by Brexit, companies with products certified by UK Notified Bodies will probably not be able to continue to export to the UK, despite the fact that the UK government issued guidance earlier in the year stating that the CE Mark would continue to be recognised for an unspecified period of time until the mark is replaced by a proposed new UKCA mark.
This is because the bodies which issued those CE Marks will no longer be authorised to do so by the EU.
Dealing with delays
Exports to the UK and other third countries could also be subject to long delays, according to John McAuley, managing director of Compliance Engineering International, Ireland’s only accredited electrical test laboratory. He emphasised the importance of the Declaration of Conformity, which is a legal document that must accompany all CE Marked products sold in the European Union and other countries which recognise the mark.
“While goods circulating within the EU move freely, the issue arises with trade with a third country,” he explained.
McAuley cited a permanent 16km queue of trucks at the Bulgarian border with Turkey as an example. “We have clients with products sitting in Turkish bonded warehouses incurring charges,” he said. “This is not a customs issue. It is a Declaration of Conformity issue. It is very difficult for manufacturers to keep pace with changing standards and keep the declarations up to date. You have to be aware of that as well.”
Disruption to Supply Chain
Importers too face challenges when it comes to supply chains. Fergal O’Byrne outlined the origins and advantages of the CE Mark to put this in context. “It’s an integral part of Single Market,” he said. “Up until the introduction of the CE Mark, standards had often been used as technical barriers to trade. EU standards level the playing field but that wasn’t always the case when you had countries using standards as non-tariff trade barriers. Slightly different standards meant multiple certifications were required. A decision of the European Court of Justice in 1979 said that if product was fit for purpose in one jurisdiction it was fit for all. But you can only have free trade if you have fair trade. You need to ensure that everyone plays by the rules with a system of third-party certification. The Notified Bodies give that certification in relation to the CE Mark.”
Change of status for Irish companies
The departure of the UK from the system will result in the dislocation of well-established supply chains. “As the UK leaves the EU many people are going to find that cogs in the supply chain have moved and they may have to take on responsibilities they didn’t have before.” according to Fergal O’Byrne.
This relates to the rules governing what are termed economic operators, which are defined as manufacturers, importers, distributors, and authorised representatives.
“Irish companies may become importers from a third country for the first time or they may become authorised representatives, they may even be treated as a manufacturer if they are marketing the products under their own brand,” he added. “They will have different rules to comply with and a duty under law to ensure that the manufacturer obeys the rules.” This is particularly important for companies that currently import from the UK but are recognised as “distributers”. Once the UK leaves the EU, many of these “distributers” will become “importers” which entails further legal obligations. Other roles such as “authorised representatives” who are appointed by a manufacturer to act on their behalf in carrying out certain tasks will be impacted after Brexit as those established in the UK will no longer be recognised.
And where the product is being sourced from the UK or another country and no longer carries a CE Mark, other steps will need to be taken, said Sarah Neary of the Department of Housing, Planning and Local Government. “They will need to transfer the certification from a UK Notified Body to an EU27 Notified Body or apply for a new CE Mark for it.”
Gaining the CE Mark
Sean Balfe, Head of Sustainability and Built Environment with NSAI, outlined the six steps required to gain a CE Mark:
- establish the CE directives that apply to the product
- know the essential requirements for your product
- determine if third-party certification is required
- assess product conformity; create and maintain technical documentation
- complete a Declaration of Conformity and affix the CE Mark
Archie O’Donnell of i3pt, the largest certifier of buildings under the Building Control Amendment Regulations in Ireland, advised construction companies to move now to engage with their supply chains to identify products which might be at risk of not having the required certifications post-Brexit. “Construction companies are responsible for managing their own supply chains,” he said. “They might have to find alternative suppliers. Companies should keep a register of the key products in use and make sure they keep track of their suppliers. They should also look at potential costs escalation as a result of new tariffs or enforced supply chain changes.”
Ralph Montague of building information modelling (BIM) consultancy ArcDox noted how the latest BIM techniques can be used to identify which products in use in a construction project may be impacted by Brexit and allow for timely action to be taken to deal with the issues.
Preparing for Brexit
During the panel discussion which closed the event it was noted that UK suppliers of some critical products remain unaware of the CE Mark issue and have made no preparations to ensure that their products can continue to be exported to the EU. This was a timely warning to Irish companies to contact their UK suppliers to establish their certification status in advance of Brexit.
“We are looking at the issues from the perspective of a hard Brexit scenario,” O’Byrne added. “The UK is going to leave the EU and become a third country regardless of when that eventually happens. Any work done in preparing for Brexit will not be wasted and construction firms should ensure they are ready for it.
If you currently use a UK based Notified Body, you will have to move an EU-27 Notified Body. You should begin the process by taking the following steps:
- Check the EU ‘NANDO’ website for a Notified Body based in the EU-27.
- Contact the new Notified Body and find out what you need to do to transfer product certification.
- If you import from the UK, you will be required to hold additional information. Engage with your UK supplier to obtain this information as soon as possible.
- If you have businesses based in both the UK and EU-27 consider how to reorganise your processes to minimise disruption.
Support for Irish businesses
NSAI has developed a range of Brexit factsheets across the following sectors: Construction, Medical Devices, Food/Agri, Chemicals/Petroleum, Pharma, Automotive and Green Procurement.
Contact the NSAI Brexit Unit at BrexitUnit@NSAI.ie for any queries on standards and certification.