Top 7 Things, cosmetic businesses in the EU27 Need to Know to Prepare for Brexit

The United Kingdom (UK) is going to leave the European Union (EU) on 29th March 2019, Friday, at midnight. It has been two years since the UK filed its notice to the European Council citing its will to withdraw from the EU. Following the event, the UK will be what EU treaties define as a ‘third country’. This will come into effect from 30th March 2019. In light of this change, it is crucial for cosmetics businesses in the EU to prepare for the withdrawal of the UK. Here are the top 7 things that businesses need to know.

1. Preparation for 30th March 2019

  • Most of the legal norms of Brexit will come into effect from the 1st of January 2021, given that the Withdrawal Agreement is expected to become effective before 30th March 2019. This means that the alteration window shall be of 21 months.

  • If the Withdrawal Agreement is not effective then there won’t be any transition period. Thus, the EU law would no longer be applicable in the UK and this would come into effect from the 30th of March 2019.

There are still negotiations going on between the UK and the EU regarding the Withdrawal Agreement Terms. Post all negotiations, the Withdrawal Agreement will be sanctioned. However, the EU-UK connection can only be estimated once UK leaves EU completely. Post this withdrawal, the UK will no longer be treated as a member of the EU.

Thus, all businesses have to make their estimates, analyze their workflow and complete any administrative work that might be there before 30th March 2019 so that there isn’t any inconvenience later on.

2. Supply Chain Responsibilities

According to EU law, businesses have a myriad of responsibilities that depend on where they are placed in the supply chain. For instance, if the businesses in the EU are getting imported from the UK, then they would have to bear additional responsibilities post the Brexit.

3. Licenses and Authorizations

The certificates, authorizations or licenses which are granted by a UK-based entity would no longer be valid under the EU law. Therefore, you would have to get new authorizations from EU27 based authority. This is applicable particularly for goods and services. Thus, the business owners need to get new certificates, authorizations and licenses post the Brexit.

4. Customs, VAT and Excise

There are huge changes when it comes to customs, excise and VAT if the goods are being moved within the country or to or from a ‘third country’. Any external company wanting to do business with the UK would find things to be more difficult post the Brexit. There would be new regulations in place which one should certainly get acquainted with.

5. Rules pertaining to Origin

EU has a Free Trade Agreement with certain counties. Owing to the Rules of Origin, exporters would get a preferential rate if the products they are trading with have EU Content. Thus, inputs which are from the UK would not be preferred and more products should have EU origin. Businesses should analyze their supply chain and look into the dynamics of their work.

6. Restrictions and Prohibitions for Import/Export of Goods

Keeping the health and safety of the environment in mind, EU rules don't encourage the import or export of certain goods from outside countries. For instance, live animals, plants and plant products or something of animal origin, are not encouraged. Moreover, certain commodities like radioactive materials or chemicals require additional notifications and permits. All these rules will be applicable post Brexit. Those in the related businesses must comply with all the prohibitions as well as restrictions so that they can carry on their business smoothly in the EU.

7. Transferring Personal Data

As of now, personal data is allowed to be shared within the member states of the EU. After Brexit, this transfer will still be possible but it would have to undergo certain regulations as per the EU law. Those who share personal data with the UK would have to be vigilant as they would be now sharing it with a ‘third country’. If the regulations in the UK resemble to that in the EU then the transfer would not be a problem. However, before transferring any personal data, one must check it with the EU laws to avoid any sort of mishaps.

Thus, there are a lot of changes happening within the business industries. People need to prepare for Brexit in order to run their business in a seamless manner. There are also companies that are registered only in the UK but conduct their business in EU27. The European Commission has given several notices that can be referred to, in this regard.

Where to find assistance?

The official website of the European Commission has more than 60 notices that address this issue. They have covered a lot of economic sectors and the various markets can refer to it, to prepare accordingly.

You can check the rules and regulations pertaining to your specific area from the various sections present on the website. In order to know more, you may also contact the national authorities and your industry specific association. The local chamber of commerce and industry can also help in this regards.

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