February Brexit Update: Closure of BIO-142, GB imports from July, EU businesses in GB and Northern Ireland
Loss of previous Annex IV status under regulation EC1235/2008
In our December Certification update we reported on an EC proposal to change the way UK organic certifiers were recognised within annexes of the new EU organic regulation, due to be implemented in January 2022.
As of January, Soil Association Certification only appears in an annex that permits trade between EU and GB under terms of the Trade & Cooperation Agreements (TCA). As such we have been forced to close our BIO-142 scheme and now only Certificates of Inspection (COIs) for consignments of food & drink, feed or seed products grown or further processed in UK can be endorsed on the EU’s TRACES NT platform. Without this endorsement, these products cannot be placed on the EU (EEA) market as ‘organic’.
BIO-142 code now redundant and should be removed from labelling
Any businesses with products previously certified under the BIO-142 scheme will need to plan to remove the GB-BIO-142 certification code from packaging/ labelling and documentation and inform us of the timescales for amendments to be fully made.
Where sold in GB, Defra have indicated product will have until September 2022 for labelling to be compliant. If licensees have labels that they anticipate being in use beyond that date, we ask that they notify our certification staff so we can consider their individual circumstances.
Exporting product that remain within scope of the TCA but still labelled with BIO-142
For export to the EU we do not currently know what member states and certification bodies will accept. Our current advice to operators is that products produced after 1st January this year should not display the GB-BIO-142 code and product produced before the end of the year should be accepted as is.
As the BIO-142 code is now technically incorrect, we suggest that affected businesses inform their EU customers that they will be amending their labels to the code GB-ORG-05 and provide a timeframe for this. We also suggest providing additional reassurance that whilst the code is incorrect, the product is within scope of the TCA, as evidenced by a COI and their certificate/schedule, and timescales for amendment. Exporters may also consider labelling the consignment (rather than the products within it) with the GB-ORG-05 code.
Import into GB of product not in scope of the TCA
Currently, GB is no obliged to accept organic food & drink, feed and seed product which are not within scope of the TCA, even where exporter (EU) and Import/1st Consignee (GB) are certified. As GB COIs are not required for organic goods from the EU(EEA) until 1st July, port checks on status of organic goods regards origin and scope of the TCA are not being made. Consequently, organic goods out-of-scope of the TCA are currently be entering GB.
As the requirement for a GB COI comes into force, we anticipate consignments of out-of-scope goods being refused entry to GB.
No current solution ahead of July deadline
We are very concerned by the apparent lack of progress between the UK and EU in agreeing alternative solutions to movement of organic goods not in scope of the TCA. Without a solution prior to July, future EU to GB trade in organic could be significantly impacted – in particular where raw materials (or finished goods) originated from outside the EU are moved from the EU into GB without further processing. We are aware that many UK based manufacturers will be reliant on these materials which may not be available direct from source.
Soil Association Certification will continue to raise awareness of this potential future disruption to EU to GB trade with both other UK certifiers, UK government and trade associations in both the EU and UK. If you believe your business could be impacted by the cessation of EU to GB trade in product currently outside scope of the TCA, then we urge you to raise the issue with your current EU suppliers and encourage them to also raise this with the competent authority in their country as well as raising your concerns with UK stakeholder groups and ministers detailing any impact it will have on your business.
In the meantime, please ensure that you identify any areas of your supply chain that will be affected when the border checks are enforced in July so that you are fully prepared for the changes.
Requirement for UK based import businesses to be a UK based legal entity
As EU businesses seek to establish UK based import operations, we are currently receiving an increasing number of requests for clarification as to what is considered a UK business in order to qualify for certification under UK organic regulations. HMRC Guidance suggests that where a business has a UK VAT or UK Economic Operator Registration and Identification (EORI) number, this does not necessarily mean or provide sufficient evidence that it is established in the UK.
What is an importer ?
The definition of “importer” in the retained regs (889/2008, Article 2) differs slightly from original EU regulation. For GB this states:
(c) 'importer': means the natural or legal person within the community who presents a consignment for release for free circulation into Great Britain, either in person, or through a representative.
In addition, the retained EU regulation also refers to Article 28 of Council Regulation 834/2007 which specifies the activities that organic registration requirements apply to:
The article only applies in relation to operators who undertake any of the following activities in relation to organic products.
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produce
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prepare
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store
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import from 3rd countries
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place on the market
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sub-contract out any of these activities to a 3rd party
This mean a business involved in any of the operations above in GB is required to have its operation(s) certified by a GB organic Control Body. The organic operator must be registered with a Control Body (CB) with authority to operate within the specified area of jurisdiction. A company importing should be registered in the UK and be certified by a GB Control Body.
Seek legal advice
We also recommend that companies seek expert professional legal advice in the UK on how to set themselves up as an established legal person in order to conduct business in UK as a British company.
Further information is here: Check if you’re established in the UK for customs - GOV.UK (www.gov.uk) and the following may also provide further information : Overseas companies registered in the UK - GOV.UK (www.gov.uk)
Clarity on NI border checks
Following recent news of the potential removal of border check in Northern Ireland, we have received a statement from DEFRA:
The checks at the border in NI are continuing, and officials at DEFRA are seeking legal advice in response to the instruction provided by Minister Poots in early February. Goods will continue to move GB-NI. There will be no impact on food supply in Northern Ireland. Traders should continue to follow the normal processes (e.g. STAMNI certificates, Export Health Certification, Certificates of Inspection etc) they would normally undertake - the legal position has not changed, and in any case checks are only one part of the agreement.