Technical Barriers to Trade in the event of No Deal: ‘Notified Bodies’ (3/4): Readiness (3a)

I am responding to a claim made by Sam Lowe that new non-tariff barriers to trade would be ‘highly disruptive’ in the event of a No Deal Brexit. I am confining myself to those technical regulations which come under the WTO Technical Barriers to Trade (TBT) Agreement, rather than those covered by the WTO Agreement on Sanitary and Phytosanitary Measures. Like Lowe, I see three types of TBT barriers arising:

i) An EU ‘importer’ would be required (see part 2), who would have a responsibility to carry out checks that the manufacturer had carried out the necessary conformity procedures.

ii) UK ‘Notified Bodies’ will lose their notified status, and the certificates they have issued will lose their validity.

iii) UK exports to EU-27 would be subject to regulatory checks at the border.

In this post, I begin an examination of the difficulties that may arise in connection with UK Notified Bodies.

The conformity assessment procedures for some products require the involvement of a third party conformity assessment body which has been officially designated by the national authority of an EU member state for this purpose. They are called ‘Notified Bodies’ because the national authority notifies the Commission and other Member States of the designation. Each Notified Body must be established in the Member State which appoints it, as may be seen from Article R22 of Decision 768/2008/EC on ‘a common framework for the marketing of products’:

The EU Commission announced in January 2018 that when the UK leaves the EU, all the Notified Bodies which were appointed by the UK will lose their notified status:

Not only this, but certificates issued by such UK Notified Bodies will lose their validity on the date of withdrawal:

The Commission made provision for such certificates to be transferred to EU-27 Notified Bodies through transfer of file and certificate, without re-certification:

Manufacturers of products carrying a Certificate issued by an UK Notified Body were thus given 15 months notice of this step they would have to take in order to be compliant with EU product safety legislation in the event of No Deal. In some cases, where the UK Notified Body had a subsidiary, parent or fellow subsidiary in EU-27, the manufacturer could maintain its relationship with the same Testing, Inspecting and Certification (TIC) body (most of which are private companies). It should be noted, however, that notifications are granted for specific product safety Directives or Regulations, and for specific tasks under each. The EU-27 arm of the company would have to have the notifications needed for the specific product.

To take one Notified Body as an example, BSI Assurance UK Ltd carries notifications under the following Directives and Regulations:

Then, under the Active Implantable Medical Devices (AIMD) Directive 90/385/EEC, again for example, BSI is notified by the MHRA to perform the following tasks which are specific to this Directive:

In September 2016, just three months after the referendum, BSI began the process of applying for Notified Body status in the Netherlands under the three medical device Directives:

 On 13 November 2018, more than two years later, BSI announced that it had successfully achieved Notified Body status in the Netherlands for all three Directives:

On 4 February 2019, BSI achieved a notification also by the Dutch government for the Construction Products Regulation:

As of today, 11 April 2019, the new Notified Body is notified for these three Directives and one Regulation only:

but the press release of 5 February 2019 stated that BSI was close to achieving notified status in the Netherlands for Personal Protective Equipment Regulation, the Gas Appliance Regulation and the Pressure Equipment Directive:

Returning now to the AIMD Directive, BSI’s Dutch subsidiary is notified for the following tasks which are specific to this Directive:

And, for the reader’s convenience, here again are the tasks for which BSI is notified under AIMD in the UK:

It may be seen that the product coverage is the same in both cases, but that while the Dutch subsidiary is notified to carry out Annex 2 (‘Complete quality assurance system’) and Annex 5 (‘Assurance of production quality’) tasks, it is not notified to carry out Annex 3 EC Type-Examination tasks.

The AIMD Directive offers, for most devices, two routes to compliance, either through Annex 2 alone, or through Annex 3 in combination with either Annex 4 or Annex 5:

I asked BSI Medical Devices on LinkedIn why BSI’s Dutch subsidiary had not been notified for Annex 3 tasks and they replied that this Type-Examination route to compliance only works well if the harmonised standards are kept up to date, and that they had not in fact been kept updated by the EU:

It would seem therefore that BSI discontinued their use of the Annex 3 procedure at some time in the past. The question then arises as to why they have nevertheless been notified for Annex 5, which accompanies Annex 3. Annex 3 concerns the initial test of the product design, whereas Annex 4 and Annex 5 are alternative ways of ensuring that the product continues to be manufactured according to the same design and quality. It may be that BSI are still undertaking Annex 5 production quality assurance of products for which they carried out an Annex 3 Type-Examination in the past, even though they are no longer using the Annex 3 route for new products. But then if that is the case, the question arises as to how the Annex 3 Type-Examination certificate (90/385/EEC Annex 3, Article 5):

can be transferred to the Dutch subsidiary if the latter is not notified for Annex 3 tasks.

A Declaration of Conformity (DoC) for a nerve stimulator manufactured by FineTech Medical Ltd records that the product was assessed by BSI according to the Annex 3 and Annex 5 procedures:

As can be seen, however, the DoC dates back to 2007, and so is not inconsistent with a subsequent discontinuation of Annex 3 assessment at a later date.

Another Declaration of Conformity, this time for an artificial heart manufactured by Syncardia Systems Inc., records an Annex 2 assessment by BSI:

It is dated 2015, which is consistent with BSI making use of the Annex 2 route in recent years.

There is a similar issue with both the MDD and the IVDD. In each case, the Dutch subsidiary covers the same product range as BSI UK, but carries out a more limited set of conformity assessment procedures. For example, in the MDD, BSI UK is notified to carry out the procedures of Annexes 2, 3, 4, 5, and 7:

whereas BSI Netherlands is notified for Annexes 2, 5 and 7 only:

As in the AIMD, it is only alternative routes to compliance, including type-examination, that have been dropped, presumably for similar reasons. The only question that seems to arise is the transfer of legacy certificates.

An Annex 2 certificate

The AIMD Annex 2 procedure includes in Section 4 an examination of the design of the product, and the issuing by the Notified Body of an EC Design Examination Certificate:

The current EC Design Examination Certificate for the Syncardia artificial heart is available on the company web-site:

The Notified Body number, 0086, is that of BSI Assurance UK Ltd.:

not that of the new Dutch subsidiary. In the event of a No Deal Brexit, this certificate would no longer be valid, and the product no longer compliant with EU product safety legislation. It may be noted at this point that it is an American company that would be affected, not a British one (see also here).

The migration of BSI certificates

On 29 January 2019, BSI Medical Devices issued an urgent notice;

pointing out that certificates would lose their validity on 29 March 2019 in the event of a No Deal Brexit, and ‘very strongly recommend[ing]’ manufacturers to migrate their certificates to their Dutch subsidiary:

This notice must presumably have been sent to all BSI’s certificate holders, and surely it would be extreme negligence on the part of a manufacturer to fail to instruct BSI to migrate certificates as recommended. In a legal blog written a few days earlier, it was reported that BSI’s migration process was already underway, but was taking longer than expected:

but it seems almost certain that the process will be completed, in case it is not already, by what is now (17 April 2019) the earliest possible No Deal exit date of 1 June 2019.

Other UK bodies notified for medical devices

While BSI Assurance UK Ltd is the only UK body notified under the AIMD, there are three other UK bodies that are notified under the Medical Devices Directive (MDD) 93/42/EEC, and the In Vitro Diagnostics Medical Devices (IVDD) 98/79/EC. These are LLoyds Register Quality Assurance Ltd (LRQA, Notified Body 0088), SGS UK Ltd (NB 0120), and  UL International (UK) Ltd (NB 0843).

In addition, AMTAC Certification Services Ltd (NB 0473), which was acquired by Intertek in 2004, and was the first UK body to be notified under the MDD, was notified for the IVDD until November 2014, and for the MDD until July 2018. In February 2018, Intertek announced that AMTAC was ceasing operations as a Notified Body, as from 1 July 2018. AMTAC’s ‘resources’, however, presumably including their testing laboratories, would remain at their current locations, but now report to Intertek Semco in Sweden:

A November 2018 study by the Dutch Ministry of Health, Welfare and Sports gives an indication of the relative importance of these five UK bodies notified for the MDD and IVDD:

Of 14,495 medical and in vitro devices registered at the Ministry, 2405 required certification by a Notified Body. 646 of these products had been certified by a UK Notified Body, comprising 432 by BSI, 76 by Llloyds Register, 79 by SGS UK, 52 by UL UK, and 7 by Intertek (AMTAC).

The migration of the 7 AMTAC certificates would presumably have begun at the time of the announcement of AMTAC’s closure as a Notified Body, and so could be expected to have been completed by July 2018.

Lloyds Register

Lloyds Register has made an application to the Dutch authorities for notified status under the MDD and IVDD through an already established Dutch subsidiary. While an assessment took place in March 2019, Lloyds Register have been informed that they are unlikely to achieve notified status in the Netherlands before 2020:

Lloyds Register expect that in the event of No Deal on 31 October 2019 (or 30 June 2019), existing certificates would become invalid in the EU-27:

Acknowledging this, the company is generously offering to expedite the transfer of certificates to an existing EU-27 Notified Body:

UL UK

Underwriters Laboratories (UK) does not appear to have made any preparations for a No Deal Brexit. Instead an undated ‘Brexit Update‘ claims that UL ‘knows’ that there will be a two year transition period, so that all CE certificates will remain valid!

The above mentioned legal blog of January 2019 indicated that UL had no plans to achieve notified status in the EU-27 under the medical devices directives, and urged manufacturers certified by UL UK to transfer to another Notified Body as soon as possible:

SGS UK

SGS, as they point out, already had two subsidiaries in the EU-27, namely in Belgium and in Finland, that were notified for medical devices:

Whereas SGS UK, however, is notified for both the MDD and the IVDD, SGS Belgium NV and SGS Fimko OY are notified for the MDD only (see here and here). Moreover, even under the MDD, neither the Belgian nor the Finnish subsidiaries have as extensive a scope as the UK subsidiary. For example while SGS UK is notified for tasks relating to four types of non-active implants, with a limitation only for 0204:

SGS Belgium is notified for only two types, 0202 and 0203, and both of these carry limitations, including the exclusion of Class III (high risk) products:

while SGS Finland is notified for 0202 only, and Class III products are excluded from its scope:

In response, SGS were extending the scope of their Belgian subsidiary:

but they were not expecting the process to be completed before what was then the expected withdrawal date (perhaps 31 March 2019):

Whereas Lloyds Register had offered to help their clients to transfer to a EU-27 Notified Body, SGS relied on ‘established procedures for orphaned products’, which they presumed would come into effect in the event of a No Deal Brexit:

As SGS point out, there already exist procedures for allowing products to continue to be marketed in the EU despite an interruption of the service provided by their associated Notified Body. In my next post, I intend to ask why the Commission is not adopting these procedures for the potential loss of UK NB services after Brexit.

Not entirely consistently, SGS do acknowledge in the same briefing the possibility that UK NB certificates would lose their validity immediately, this being the position of the Commission:

They strongly believed, however, that in the face of supply and availability issues the EU would come round to a more pragmatic position in which UK NB certificates would be recognised for a transitional period while they were transferred to EU-27 NBs:

I intend in the following two posts to assess this belief, asking:

i) who would be affected, and to what degree, by an immediate cut-off of the validity of certificates issued by UK Notified Bodies; and

ii) whether there is precedent for a ‘grace period‘ to allow affected products to continue to be marketed in the EU-27 while certificates and Notified Body activities are transferred to EU-27 Notified Bodies.

Conclusion: readiness

The European Commission made its announcement 15 months in advance that existing certificates issued by UK Notified Bodies would become invalid in the event of a No Deal Brexit. While this would have been sufficient notice for manufacturers to transfer to an EU-27 NB, it is not surprising that many chose to stay with the body they had been working with until then. For the UK Notified Bodies themselves, 15 months was probably insufficient time to get notified status in the EU-27, even if they had an office already established there. In the case of the three medical devices Directives, BSI was the only one of the four major UK Notified Bodies that completed the process of achieving EU-27 notified status before 31 March 2019. Thankfully it is by far the most prominent of the four, accounting for 67% of UK notified medical devices registered in the Netherlands. It seems reasonable to assume that almost all of its clients will have heeded BSI’s advice to transfer their certificates to the Dutch subsidiary.

Lloyds Register is expecting to achieve notified status in the Netherlands in 2020. SGS already had notified status under the MDD in Belgium and Finland, but with much more limited scope than the UK subsidiary. It is in process of expanding its scope in Belgium. Underwriters Laboratories appears not to be making any attempt to achieve notified medical device status in the EU-27. Manufacturers holding CE certificates from any of these three companies could therefore lose access to the EU-27 market in the event of No Deal. More importantly still, their products might suddenly cease to be available to medical services in the EU-27.

In the next two posts I intend to assess the likelihood of the EU actually implementing the policy of January 2018 and, in the event of No Deal on 31 May 2019 or 31 October 2019, immediately preventing access of medical devices to its own market.

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