Import: Non-Tariff Barriers

Many countries use non-tariff barriers as a means to restrict imports.

Due to Brexit, the information contained in this article may not be accurate. As more information becomes available, this content will be updated.

The United Kingdom (UK) has no significant trade or investment barriers and no restrictions on the transfer of capital or repatriation of profits. The few barriers that exist are almost all attributable to the UK's implementation of European Union (EU) directives and regulations. Of note, while the UK converted EU laws into domestic legislation at the point of Brexit, the UK may now amend or repeal those laws in favor of laws and regulations tailor-made for the UK.  

Industrial Chemicals and Substances

Regulation on the Classification, Labelling, and Packaging of Substances and Mixtures (CLP Regulation)

In December 2008, the European Union (EU) replaced its Dangerous Substances Directive with a regime for classification and labeling called the Regulation on the Classification, Labelling, and Packaging of Substances and Mixtures (CLP Regulation). Under this legislation, the EU continues to classify borates and other nickel compounds in a stringent category known as Category 1B, which subjects them to product and packaging restrictions, including a requirement to use labels showing a picture of an "exploding man" along with warning and risk phrases.

The EU's CLP Regulation adopts the Globally Harmonized System of Classification and Labelling of Chemicals (GHS) of the United Nations Economic Commission for Europe (UNECE). As GHS is a voluntary agreement rather than a law, it must be adopted through a suitable national or regional legal mechanism to ensure it becomes legally binding. That's what the EU CLP Regulation does.

An amended EU CLP Regulation is retained in Great Britain law. This means Great Britain (GB) continues to adopt the GHS, independently of the EU. In order for GB's CLP Regulation to operate fully and effectively, the EU CLP Regulation has been amended. This means there are changes to the requirements or allowances in existing processes and procedures. The following should be noted:

• The main duties to classify, label and package remain
• Health and Safety Executive (HSE) becomes the relevant GB CLP Agency overseeing GB CLP functions for substances and mixtures placed on the GB market
• The GB CLP Regulation applies to GB-based manufacturers, importers, downstream users and distributors supplying the GB market
• Substances and mixtures placed on the market in Northern Ireland (NI) are subject to the EU CLP Regulation (placed on the market includes import into the territory)
• The GB CLP Regulation applies to NI based manufacturers, downstream users and distributors (collectively referred to as NI suppliers) who directly supply the GB market, with no intermediate NI supply, with qualifying NI goods (QNIG)
• Substances and mixtures are goods in this context
• GB-based manufacturers and importers and NI suppliers directly supplying the GB market with QNIGs will have to notify HSE within one month of placing 'new' substances on the GB market unless one of the exemptions applies
• All existing EU harmonized classification and labelling in force on 31 December 2020, are retained in Great Britain as GB mandatory classification and labelling (GB MCL)
• The classification and labelling of substances and mixtures placed on the GB market must comply with GB MCL where relevant. GB MCL are listed in the GB mandatory classification and labelling list
• GB-based manufacturers, importers or downstream users wanting to submit information to support new or revised mandatory classification and labelling proposals should read the GB MCL guidance 'Submitting a new or revised GB MCL proposal'
• HSE and ministers, including ministers in the devolved administrations, acting as GB CLP competent authorities can also propose new and revised GB MCLs
• The allowance to request the use of alternative chemical names remains
• GB-based manufacturers, importers or downstream users or NI-based suppliers, directly supplying the GB market with QNIGs, wanting to use a new alternative chemical name in Great Britain should apply to the HSE
• GB-based importers and downstream users and NI-based downstream users directly supplying the GB market with QNIGs should be aware of the arrangements for submitting information to the UK National Poisons Information Service (NPIS) known as the National Poison Center

Chemicals—REACH Regulation

The UK has adopted the EU regulation known as Registration, Evaluation, Authorization and Restriction of Chemicals (REACH). Referred to as UK REACH, it provides regulations for manufacturing, importing, selling, and distributing chemical substances or mixtures. It impacts virtually every industrial sector, from automobiles to textiles, because it regulates chemicals as a substance in preparations and products. It imposes extensive registration, testing, and data requirements on tens of thousands of chemicals. REACH also subjects certain chemicals to an authorization process that would prohibit them from being placed on the UK market except as authorized for specific uses. REACH requires polymer manufacturers and importers to register reacted monomers in many circumstances. The reacted monomer registration requirement provides an incentive for distributors to stop importing polymers and switch to UK polymer suppliers.

Part of the Department for Environment, Food, and Rural Affairs (Defra), the Comply with UK REACH service can be used to:

• Submit a new registration for a substance
• Provide notification of continuing to import substances from the EU or European Economic Area (EEA) by submitting a Downstream User Import Notification (DUIN)
• Transfer assets, such as registrations, to another legal entity
• Submit a Northern Ireland notification
• Manage joint registrations (claim the lead registrant role, submit a lead dossier, and approve joint registration group members)

More information on UK REACH, including how to access the Comply with UK REACH service, is available online at www.gov.uk/government/publications/create-an-organisation-account-on-the-comply-with-uk-reach-service. 

Hazardous Substance Restrictions

The UK has adopted an amended version of the EU’s directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS), which prohibits placing certain categories of electrical and electronic equipment on the market that contain chemicals such as lead, mercury, cadmium, and hexavalent chromium. The RoHS directive includes certain application-specific exemptions from the prohibitions. The UK considers requests for additional exemptions on an ongoing basis. Difficulties are created by lack of transparency and predictability of the UK’s process and timing for considering exemption requests. A guide to the RoHS regulations as they apply in Great Britain is available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/949396/Guide-to-rohs-regulations-2012.pdf.

Services Barriers

Television Broadcasting and Audiovisual Services

The UK adopted a revised version of the EU's Audiovisual Media Services Directive (AVMSD), which amends and extends the scope of the Television without Frontiers (TVWF) Directive (which already covered traditional broadcasting, whether delivered by terrestrial, cable or satellite means) to also cover audiovisual media services provided on-demand, including via the internet. The UK's Audiovisual Media Services Regulations 2020 (SI 2020/1062) was signed into law on September 30, 2020. European content quotas for broadcasting remain in place. On-demand services are subject to somewhat less restrictive provisions than traditional broadcasting under the AVMSD, which does not set any strict content quota but still requires ensuring that on-demand services encourage production of, and access to, European works. This could be interpreted to refer to the financial contribution made by such services to the production and rights acquisition of European works or to the prominence of European works in the catalogues of video-on-demand services. 

Government Procurement

Agreement on Government Procurement  (GPA)

The UK is a party to the World Trade Organization's Agreement on Government Procurement (GPA). It defines an offset as a condition or undertaking that encourages local development or improves a party’s balance of payments accounts—such as requirements for domestic content, technology licensing, investment, and countertrade. 

A revised GPA took effect in 2014. Generally based on the same principles as the original 1994 agreement, the revised text:

• Provides a complete revision of the wording of various provisions in order to streamline them and make them easier to understand.
• Takes into account developments in current government procurement practices, notably the use of electronic tools, by establishing related requirements to ensure that the general principles of the GPA are fully respected in the electronic era. It also incorporates additional flexibility for parties' procurement authorities, such as shorter notice periods when electronic tools are used.
• Clarifies and improves the special and differential treatment provisions (S&D) that are available to developing members acceding to the GPA. This is expected to facilitate their accession, thus expanding the membership of the agreement and market access opportunities.
• Introduces a specific new requirement for participating governments and their relevant procuring entities to avoid conflicts of interest and prevent corrupt practices. This signals a belief on the part of the parties that the GPA can play a part in promoting good governance.
• Acts as an important tool for promoting a transparent and relatively corruption-free environment in the economies that are in the process of acceding to the agreement.

The e-GPA is an electronic portal of the WTO that provides GPA market access information. It is available at https://e-gpa.wto.org.

Utilities Directive

The UK's Utilities Contracts Regulations 2016 and Concession Contracts Regulations 2016 implement the EU's 2014 Utilities Contracts Directive and Concession Contracts Directive respectively. Covering purchases in the water, transportation, energy, and postal services sectors, they require open, competitive bidding procedures, but discriminate against bids with less than 50 percent UK content that are not covered by an international or reciprocal bilateral agreement. 

The UK content requirement applies to foreign suppliers of goods and services in the following sectors: 

• Water (production, transport, and distribution of drinking water)
• Energy (gas and heat)
• Urban transport (urban railway, automated systems, tramway, bus, trolley bus, and cable)
• Postal services

More information on the public procurement rules, including regulations, is available online at www.gov.uk/transposing-euprocurement-directives. 

Subsidies for Aircraft

Government Support for Airbus

Over many years, the governments of France, Germany, Spain, and the United Kingdom have provided subsidies to their Airbus-affiliated companies to aid in the development, production, and marketing of Airbus large civil aircraft. These governments have financed between 33 percent and 100 percent of the development costs for all Airbus aircraft models (launch aid). The beneficiary of more than $6 billion in subsidies, the Airbus A380 is the most heavily subsidized aircraft in history. 

Airbus SAS, the successor to the original Airbus consortium, is owned by the European Aeronautic, Defense, and Space Company (EADS), which is now the second largest aerospace company in the world. Accounting for more than half of worldwide deliveries of new large civil aircraft over the last few years, Airbus is a mature company that should face the same commercial risks as its global competitors. 

UK government support for Airbus has included investment in the Integrated Wing Program, announced in December 2006. The Department for Business, Energy and Industrial Strategy (BEIS) and selected regional development agencies provided half of the funding for the £34 million (34 million British pounds) program, with the remainder drawn from Airbus and participating suppliers. The Integrated Wing Program is one of 12 key technologies identified in the National Aerospace Technology Exploitation Program (NATEP), which largely directs UK government investment in strategic aerospace capabilities. On September 15, 2008, GKN plc. announced that it was buying Airbus’ wing component factory near Bristol, England, for £136 million. The same day, the British government announced that it would provide £60 million in repayable launch aid to the company to help it develop advanced composite wing components for the Airbus A350. The government also announced an additional £50 million in funding to support research and technology development for Airbus wing projects. 

Government Support for Aircraft Engines

In February 2001, the UK government announced its intention to provide up to £250 million to Rolls-Royce to support development of the Trent 600 and 900, two additional engine models for large civil aircraft. The UK government characterized this engine development aid as an "investment" that would provide a "real rate of return" from future sales of the engines. The European Commission announced its approval of a £250 million "reimbursable advance" without opening a formal investigation into whether the advance constituted illegal state aid under EU law. According to a Commission statement, the "advance will be reimbursed by Rolls-Royce to the UK government in case of success of the program, based on a levy on engine deliveries and maintenance and support activity." Detailed terms of the approved launch aid were not made public. To date, none of the launch aid for the Trent 600 and 900 has been repaid. 

Propulsion is another area considered important to the future of the UK aerospace industry, and BEIS has extended support to Rolls-Royce for the development of environmentally friendly engine technologies. This funding is directed through established research funding channels, though the government has provided occasional direct support to Rolls-Royce in the past. 

Regional Aircraft

In July 2008, Bombardier Aerospace announced an investment of £519.4 (519.4 British pounds) million in Northern Ireland to support the design and manufacture of the wings for its 110 to 130 seat CSeries family of aircraft. In an agreement with the Bank for International Settlements (BIS), the Northern Ireland Executive has offered assistance to the investment of £155 million. This includes a maximum of £130 million Northern Ireland’s contribution of £78 million of repayable Launch Investment assistance for the CSeries and up to £25 million Selective Financial Assistance.

Electronic Commerce

General Data Protection Regulation (GDPR)

In 2016, the EU adopted its General Data Protection Regulation (GDPR) aimed at making Europe fit for the digital age. The regulation is an essential step to strengthen individuals' fundamental rights in the digital age and facilitate business by clarifying rules for companies and public bodies in the digital single market. A single law will also do away with the current fragmentation in different national systems and unnecessary administrative burdens.

The European Commission (EC) adopted an Adequacy Decision under Article 45 of the GDPR, which allows personal data to continue flowing freely between the EU and UK. It involves:

1. A proposal from the EC;
2. An opinion from the European Data Protection Board (which replaced the Article 29 Working Group);
3. An approval from representatives of EU member states; and
4. An adoption of the decision by the EC.

The purpose of this four-step process is for the EC to assess if a Third Country provides an adequate level of data protection. The EC has previously issued Adequacy Decisions for Andorra, Argentina, Canada (commercial organizations), Faroe Islands, Guernsey, Israel, Isle of Man, Japan, Jersey, New Zealand, Switzerland, and Uruguay.

The GDPR Adequacy Decision was accompanied by a simultaneous Adequacy Decision under the Law Enforcement Directive which works hand in glove with the GDPR in respect of policing and security data transfers. The adoption of the Adequacy Decision(s) is to be welcomed by businesses involved in trade with the UK and/or dealings with UK companies to whom personal data on EU data subjects is transferred. The adoption by the UK of GDPR does, however, carry a risk, if not a certainty, of a measure of divergence on data protection laws in the future. As this evolves, it is possible that the EC could exercise its power to revoke the Adequacy Decisions. With this leverage comes the prospect that, in reality, the UK arguably remains subject to the ongoing development of EU data protection law.

Data Protection Law Enforcement Directive

The EU's Data Protection Law Enforcement Directive allows the transmission of EU data to third countries only if those countries are deemed by the EC to provide an adequate level of protection by reason of their domestic law or of their international commitments. As of 2022, the EC recognizes Andorra, Argentina, Canada, Faroe Islands, Guernsey, Israel, Isle of Man, Japan, Jersey, New Zealand, Republic of Korea, Switzerland, the United Kingdom, and Uruguay as third countries that provide an adequate level of protection. For countries lacking an adequacy finding, the EC may recognize specific and limited programs and agreements as providing adequacy; outside of the programs that explicitly enjoy an adequacy finding, foreign companies can only receive or transfer employee and customer information from the EU under one of the exceptions to the directive’s adequacy requirements or if they demonstrate that they can provide adequate protection for the transferred data. These requirements can be burdensome for industries that rely on data exchange between their countries and the EU.

Note: The above information is subject to change. Importers are advised to obtain the most current information from a customs broker, freight forwarder, or the local customs authorities.

Sources: Her Majesty’s Revenue and Customs or HMRC (www.gov.uk/government/organisations/hm-revenue-customs/services-information); Health and Safety Executive (www.hse.gov.uk); World Trade Organization (www.wto.org); International Trade Administration (www.trade.gov)

Article written for World Trade Press by Brielle Burt, Jennifer Goheen, and Nina Bellucci.
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