WF_Brexit

Projects & Construction – Top 5 Issues (Nov 2022)

The EU-UK Trade and Co-Operation Agreement agreed between the EU and UK Government in late December 2020 (the Agreement) to manage the implications of Brexit has had a significant impact on the projects and construction sector.  The key legal issues for projects and construction being impacted by the Agreement are as follows:

  1. Changes in laws and standards - Irish construction industry standards have been closely aligned with the UK in many respects. This is because both jurisdictions had implemented EU-wide standards and adopted similar standards to each other. Ireland and the UK now have separate regulatory regimes since 1 January 2021.

    The Agreement does not provide for mutual recognition of products or standards. As of 1 January 2021, all products exported from Ireland to the UK have to comply with UK technical regulations and are subject to any applicable regulatory compliance checks and controls. Similarly, all products imported from the UK to Ireland need to comply with EU technical regulations and are subject to all applicable regulatory compliance obligations, checks and controls for safety, health and other public policy purposes.  Examples of construction industry standards already diverging include Building Safety and CE marks:

    Building Safety
    The UK has passed the Building Safety Act 2022 which adopts a very different approach to that of Ireland/the EU to issues of financial liability in relation to Building Safety issues. It introduces changes to the building control regime for higher-risk buildings, new rights of redress and other building safety changes.

    Construction Products/CE marks

    Under Irish and EU law, CE marking is mandatory for all construction products placed on the market in the EEA and covered by a harmonised European product standard. This creates greater certainty in the quality and safety of construction product standards and is a requirement of the Irish building control regime. There is now no longer a single "CE" mark used across the UK and the EU/Ireland. The EU uses CE marks, with the post-Brexit replacement for CE marking in Great Britain being the UK Conformity Assessed (UKCA) mark, which businesses can choose to use immediately. However, in November 2022 it was announced that CE marking may also be used in Great Britain on a transitional basis until 31 December 2024 (the period was set to expire on 31 December 2022). Draft Product Safety and Metrology (Amendment and Transitional Provisions) Regulations 2022 have been published reflecting these and other related changes. Different, sector-specific arrangements being made for medical devices, construction and other products, with separate rules to apply in Northern Ireland. 
  2. New or increased tariffs, taxes or import duties and currency fluctuations impacting construction materials, equipment and specialist design services - changes in tariffs or requirements relating to customs, fluctuations in currency, changes in taxes affecting construction materials, equipment and/or specialist design services creates increased costs and delays for construction projects in Ireland. Contract drafting needs to address who will bear such additional costs.

    Since 1 January 2021, while there are no tariffs or quotas on the movement of goods between the UK and Ireland, all customs controls and formalities required under EU law (and in particular the Union Customs Code), including entry and exit summary declarations, apply to all goods entering the customs territory of Ireland from the UK, or leaving Ireland to the UK. Only 'originating' goods satisfying are able to benefit from the Agreement, as set out in detail.

    This does not concern trade in goods between the Ireland and Northern Ireland, where the Withdrawal Agreement/Protocol on Ireland and Northern Ireland should apply, meaning there are no controls on goods crossing between the border between Ireland and Northern Ireland. However, there has been much media reporting in Ireland and the UK on delays at customs and ports where correct import/export declarations are not available, which has created knock-on construction projects delays. In parallel, the UK has published and is progressing through its Parliament the draft Northern Ireland Protocol Bill 2022 seeking to unilaterally revise aspects of the Northern Ireland Protocol.
  3. Recognition of Professional Qualifications -The system of mutual recognition of professional qualifications, such as those applying to architects, within the EU no longer applies. As of 1 January 2021, as a general rule, UK nationals, irrespective of where they acquired their qualifications, and EU citizens with qualifications acquired in the United Kingdom need to have their qualifications recognised in Ireland on the basis of existing Irish rules applicable to the qualifications of third-country nationals as of the end of the transition period where practising in Ireland. Similar issues apply to Irish professionals in the UK.
  4. Availability of Key Personnel and Labour – Restrictions in movement of people which is Brexit related has created issues on availability of key personnel and skilled labour, particularly in the context of projects with workforces comprising personnel from both Ireland and the UK. The Agreement does not address this concern. Irish companies deploying their staff to the UK, and equally UK business deploying staff to Ireland need to check their staff have the required visas or work permits before commencing work.

Contact:

Cassandra_Byrne_Brexit
  

Jarleth_Heneghan_Brexit

Cassandra Byrne
Consultant

Email Cassandra
+353 639 5206

 

Jarleth Heneghan
Partner

Email Jarleth
+353 639 5252