No-Deal Brexit Poses Severe Regulatory Challenges for RFID Suppliers in the U.K.

By Ronald E. Quirk

Since a Brexit deal appears unlikely, RFID suppliers must be prepared for the coming changes.

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The United Kingdom’s Brexit battle has been enervating, to say the least. With competing interests taking a hard line, the original Brexit deadline of Mar. 31, 2019, has come and gone. As the new deadline of Oct. 31, 2019, looms with no deal in sight and a new Prime Minister to be chosen during the week of July 22, 2019, the future of Brexit remains murky.

A Brexit Deal May Be Unlikely
Candidate Boris Johnson has pledged that if he is the new Prime Minister, Brexit will happen on Oct. 31, whether or not there is a deal with the European Union. Johnson’s opponent, Jeremy Hunt, has vowed to “cease all discussions” with Brussels on Sept. 30 if the E.U. fails to budge on its current demands. Meanwhile, many U.K. business leaders are apoplectic, asserting that the candidates’ “no-deal” pledges illustrate the “height of irresponsibility,” showing “zero understanding” of the economic consequences.

Stephen Phipson, the chief executive of Make UK, Britain’s largest manufacturing organization, called the prospect of a no-deal Brexit “economic lunacy.” Phipson declared that this year, U.K. manufacturers have already suffered the sharpest fall in activity in six and a half years, adding to signs of economic weakness.

What a No-Deal Brexit Means for RFID Suppliers
Whatever economic consequences may befall the U.K. because of a no-deal Brexit, RFID suppliers that do business in the United Kingdom will be subject to new regulations. It is critical for all RFID stakeholders with British markets to understand the new regulations, as violators will be subject to substantial fines and other sanctions.

Currently, RFID equipment may be marketed in the United Kingdom if it meets the requirements of the E.U.’s Radio Equipment Directive (RED) and Low Voltage Directive (LVD). Some equipment is also subject to the Restriction on Hazardous Substances Directive (RoHS) and the Waste Electrical and Electronic Equipment Directive (WEEE). The E.U. and U.K. also require conformity with various harmonized standards.

In the E.U., the parties responsible for ensuring regulatory compliance for RFID equipment are manufacturers, importers and distributors. Before placing RFID equipment on the E.U. market, a manufacturer must perform a conformity assessment procedure (CAP) to confirm that the equipment meets the requirements of the applicable directives and harmonized standards. There are three types of CAPs, but they all involve compiling technical data, performing compliance testing, labeling equipment (with a CE Mark and, in some instances, the identification number of an E.U. government body), preparing a Declaration of Conformity (DoC) attesting to compliance, and having a compliance plan in place. Importers and distributors have their own, but less onerous, compliance requirements. An importer or distributor that markets RFID equipment under its own name or trademark, or that makes technical changes to the equipment, will be classified as a manufacturer for the purposes of marketing in the E.U.

According to the U.K.’s Department of Business, Energy, and Industrial Strategy (BEIS), RFID equipment that operates between 865 and 868 MHz with power levels up to 2 watts, and in the 915 to 921 MHz band with power levels up to 4 watts, will be regulated under the “New Legislative Framework.” For such products, the following procedures will apply to RFID equipment suppliers that market their products in the U.K. post-Brexit if there is no deal:

• E.U.-compliant equipment placed on the U.K. market before the United Kingdom leaves the E.U. will remain compliant after Brexit.
• RFID equipment that meets the E.U. requirements and bears the CE Mark may be placed on the U.K. market for the first time during a limited period of 18 months after the exit date.
• After the 18-month transition period expires, new products placed on the U.K. market will need to meet the U.K.-specific RF equipment rules, but the E.U.-harmonized standards will remain valid in the United Kingdom as “designated standards, to maintain a single standards model between the U.K. and the E.U.
• A new label, the UKCA Mark, will be required on all RFID equipment placed on the U.K. market post-Brexit after the 18-month transition period expires.
• The legal obligations of RFID manufacturers will remain largely unchanged after the U.K. exits the E.U.
• Any entity that brings manufactured RFID equipment into the U.K. from the E.U. in order to place it on the market will be classified as an importer (e.g., E.U. entities that were distributors will now be importers if they want to continue to have their products marketed in the E.U.). All importers of RFID equipment to the U.K. post-Brexit are required to do the following:
» label the products with the company’s name, registered trade name or trademark and a contact address;
» make sure that the correct CAP has been carried out for all the equipment imported into the U.K.;
» ensure that the equipment carries the correct conformity markings;
» confirm that the manufacturer has drawn up the correct technical documentation and complied with its own labeling requirements;
» be alert to non-conforming equipment and not import it into the U.K. if there is reason to believe it does not comport with the relevant regulatory requirements; and
» monitor products made available on the market for regulatory compliance.

If a Deal Is Struck, Not Much Will Change
If the United Kingdom and the European Union execute a deal before Brexit, BEIS asserts that the E.U. and U.K. will combine regulatory and customs requirements. Hence, while there are likely to be some new U.K.-specific regulations for RFID equipment, most of the current E.U. regulatory requirements will remain the same. The details, of course, will hinge on the specifics of the deal itself.

Conclusion
Regulatory agencies that govern RFID equipment and other RF devices have been cracking down on rule violators. Accordingly, it is critical that all RFID suppliers that conduct business in the United Kingdom remain aware of the status of Brexit and ensure that the applicable rules are followed. As of this writing, a Brexit deal appears unlikely, and RFID suppliers should prepare themselves for the changes that will occur post-Brexit. Consultation with knowledgeable consultants or counsel would be helpful to any RFID supplier looking to avail itself of the marketing opportunities in the U.K. and other markets around the world.

Ronald E. Quirk Jr., is the head of the IoT Group at Marashlian & Donahue LLC, The CommLaw Group. Ronald focuses his practice on federal, state and international telecommunications regulation and policy, with a particular expertise in assisting clients in navigating the complex labyrinths of RF equipment authorization and enforcement processes around the world. His career has spanned more than 20 years, including several years at AMLAW 100 firms and the FCC. He can be reached at req@commlawgroup.com or (703) 714-1305. If you would like additional information concerning the issues covered herein, or to obtain a hard copy of the comprehensive “U.S. or Global RF Equipment Regulatory Compliance Guide,” please contact the author.

Disclaimer: This article is intended for informational purposes only and is not for the purpose of providing legal advice. You should not act upon the information in this article without seeking professional counsel.