As Brexit nears, UK companies that import food products need to be aware of the potential impact on consumer protection duties. And in a nutshell, it means sole responsibility now lies with them, not the EU. We look at what they need to be aware of.
As the end of the transition period moves ever closer, businesses are braced to discover what, in reality, Brexit will mean for them. The government’s strategy of converting EU legislation into UK law purports to be a seamless way in which the status quo can be maintained; but food product importers should be aware that this is approached (entirely understandably) from a consumer protection perspective.
The change in legislation will ensure that a high-level of consumer protection is retained, but UK importers will now bear a much greater burden for ensuring this. With significant potential sanctions for non-compliance, businesses must recognise these potential additional obligations and implement sufficiently robust systems and processes so as to ensure compliance.
Change – the law
The European Union (Withdrawal) Act 2018 provides that, from 1 January 2021, certain directly applicable EU legislation will be converted into UK law. There are a number of regulations and statutory instruments (including the Food (Amendment) (EU Exit) Regulations) that amend existing laws to update “Union” obligations to “UK” obligations. These include duties in respect of food safety, food hygiene and food information.
With Brexit signalling an end to free movement of goods between the EU and the UK, food imported into the UK from the EU will require the same level of scrutiny as imports from outside the EU. An entity that was once acting in a distributor capacity moving food from the EU to the UK will now move one step up the supply chain, potentially becoming an importer, with all the consequent associated enhanced responsibilities and obligations.
Change - business
Any UK business that currently considers itself to be a distributor of food products within the permitted EU framework will need to reconsider its position. It will no longer be sufficient for such a business to rely on the due diligence undertaken by the EU based producer or EU based initial importer into the EU, without completing its own additional checks (on a risk assessed basis). If a UK company is the importer, it will now have the primary responsibility as the food business operator to ensure compliance (within its reasonable and practicable control) with the relevant duties imposed by the legislation covering food safety, food hygiene and food information for the products it imports from anywhere in the world including the EU.
As the due diligence defence is the primary defence available to any business which finds itself subject to enforcement action, any business importing food products into the UK will need to review and consider enhancing its own due diligence processes to ensure it can demonstrate compliance and appropriate risk controls in the UK. These obligations, when coupled with the risk profile of the product, may cause certain businesses to question whether it is in fact viable to import the product at all.
Not changing - the consequences
The legislative changes mean a business will be susceptible to investigation by the UK enforcing authorities, and accordingly susceptible to criminal prosecution and liability, in relation to any product it imports. Though a UK business could, through its contractual documentation, try and pass civil liability on to the party from whom it imports its food products, it is not possible to do this for criminal liability. As UK regulators cannot prosecute a company with no UK presence under the relevant legislation, the obligation will fall to the UK importer to satisfy the various legal duties and perform the relevant controls and checks, as well as holding the relevant documentation to evidence compliance and the safety of the products it sells.
Prosecution for failing to do so could result in an unlimited fine. Using the relatively new sentencing sideline, judges have demonstrated a consistent willingness to impose extremely substantial fines, particularly for large corporations.
With less than three months left until the transition period expires, businesses must take steps to understand and mitigate against the impact of this change in legislation. The significant consequences of a failure to do so mean businesses must act now to review their supply chains and processes to ensure compliance come January 2021.