Overview
European Union law is of assistance in facilitating Irish businesses in trading with and providing services into the UK. See our separate guides in relation to using European Union legislation to trade. This legislation has gone very far to harmonise rules in relation to standards for goods and services. EU law provides a general right to trade with other EU member states from the home state, with minimal additional licensing or compliance obligations. Alternatively, a business may establish a branch or subsidiary in the other EU state.
European Union governments must not impose additional unnecessary standards on businesses from other EU states. There are mechanisms under European Union legislation by which the host state must justify licence or regulatory requirements or standards where there are equivalent standards in the home state. There may, therefore, be cases where the UK legislation would appear to require a local licence, but where the UK authorities will be obliged to recognise and accept as sufficient, compliance with equivalent standards in another EU state
European Union legislation has sought to harmonise standards in relation to many goods and businesses so that compliance with standards in Ireland automatically complies with standards in the UK. Harmonisation covers a wide range of businesses. Many of the European Union laws in relation to consumer protection have been harmonised so that businesses do not have to face different standards in different markets.
Irish business exporting into the UK or establishing a branch or subsidiary in the UK, must look at the particular regulation applicable in their field of business. Consideration must be given to the types of goods or services traded or provided. The precise position will depend on the wording of the legislation.
It may be that the provision of the goods and services from a base outside England and Wales will not be subject to licensing. There may be minimum standards of consumer protection measures in relation to the goods or services. It may be that European Union law has already harmonised standards so that the compliance with the Irish standards is automatically sufficient compliance with the equivalent UK standards. It may be that there are divergent Irish and UK standards, but that it is possible to challenge these using procedures under EU legislation.
In recent years, EU law has become more favourable to the exporter. The onus is on the host country government to justify regulation which does not recognise the equivalent regulation in another EU country. This requires regulators in member states to assess the equivalent regulatory systems of other states. The continued work of the EU has made the degree of harmonisation and uniformity greater over time.
European Union legislation has endeavoured to harmonise most regulated professional services and to specify the circumstances under which regulation of a qualification by the home state would be recognised in the recipient state. See our separate guide under our European Union law section.
Harmonisation of Standards
In order to make a genuinely free trading area, the EU commenced the process of harmonising standards for goods and services throughout the EU. This process was accelerated greatly in the early 1990s. This process involved setting out common EU standards so that once goods or services were lawfully produced in one State they could be exported into any other State on the basis that they conformed with the home country’s rules and standards.
The EU has made common rules in several hundred areas which were identified as being barriers to trade. In the late 1980s, the Single European Act was passed to facilitate the creation of a single market by streamlining the method by which harmonisation laws were made. Prior to 1993 over 300 measures were passed into law. Harmonisation has continued since that time. Generally, the European Union harmonises laws and standard by “Directives”, which are a special type of law which impose obligations on member states to makes laws in conformity. Directives set out the standards and objectives that must be realised. Member States are obliged to implement Directives within certain time limits.
There are harmonised laws on standards and requirements for many products in the EU. In the absence of harmonisation, individual EU states can regulate products and insist that national rules be applied, provided the national rules can be justified by reference to requirements which are strictly necessary and which are reasonable and proportionate. That is to say, that there must be good justification and the rules must be no more than necessary to give effect to the justified reasons for the rules.
The potential justifications for differing national rules and procedures include such matters as tax supervision, public health, defence of the consumer, protection of the environment, working conditions and protection of fundamental rights. However, EU law is strict in ensuring that Member States do not use these potential justifications as a hidden method of discrimination.
Where there are no harmonised standards, the general principle of mutual recognition requires that products and services put on the member market in one state which satisfies its standards are requirements should be allowed access to the market in other EU states. While the principle is attractive and continues to be a key requirement the practical limitations on it have meant that harmonisation legislation has been necessary.
Types of Harmonisation
There are a number of different types of harmonisation. In certain fields, full harmonisation occurs. The diverse national rules are replaced by a single EU rule leaving no room for member states to take action. The Directives impose a two-fold obligation on states. The Member States must permit goods complying with the directive to be freely imported and marketed and must prohibit the sale of goods not complying with the Directive.
There are many examples of completely harmonised standards. Areas covered by harmonised standards include banking financial services, insurance of motor vehicles, cosmetics, fertilizers, numerous types of equipment, transport, telecommunications, etc.
An alternative approach is minimum harmonisation. The EU sets minimum standards, but member states are free to impose higher standards on their goods and services. Minimum standards provide a floor below which national standards cannot fall. Member States are free to choose more stringent measures than those resulting from EU law. Goods meeting the minimum standards may be marketed in any member state.
A simpler method of harmonisation has been commonly used in recent times to fast-track the completion of the internal EU market. Directives set out broad principles rather than detailed rules and rely on private bodies to set voluntary standards. The EU rules deal with the essential safety standards of a product. Once goods conform to those standards and a CE marking is placed, they must enjoy free movement throughout the EU.
The task of drawing up technical specifications is entrusted to specialist standard organisations. Manufacturers are entitled to produce in accordance with the standards set by the voluntary bodies or according to other standards which conform with the essential safety requirements. Products manufactured in conformity with the harmonised standards are presumed to conform with the essential requirements. The Member States must take appropriate enforcement action, including market surveillance, to ensure that non-conforming production is countered.
