Brexit update

Updated: 4 April 2017

In general, we view an exit from the EU as unlikely to have a significant short-term impact on how LR provides services to clients. However, given the extent of the uncertainty about how the process will unfold, we will continue to follow events and keep our clients updated on our view and plans.   

The UK Brexit Bill has now passed through Parliament and Article 50 was triggered as of 29 March. Since the referendum in June 2016, the UK has installed a new government, created a Brexit department, and is forming a strategy on how to exit the EU. LR’s specific Brexit Committee, formed soon after the vote last year, continues to focus on the plans and actions we need to put in place to ensure any impacts on our clients are minimised and managed.

We want to reassure our clients that, whatever the outcome of the Brexit negotiations, LR is a robust and resilient business that benefits from a global footprint, and is, therefore, in a good position to deal with the results and emerge strongly.

Possible impact on LR’s status

It is important to note that, until the UK government formally exits the EU (some two years from the date that Article 50 was triggered) our business will carry on as normal.  

After this period, we have examined the possible impact of the UK’s exit from the EU on LR’s status in three areas: 

1) an EU Notified Body; this is particularly relevant to LR’s assurance and inspection work performed under various EU Directives and Regulations and to our services to the marine and offshore sector performed under the Marine Equipment Directive; 

2) an accredited certification organisation; this is particularly relevant to assurance and inspection work performed under UKAS accreditation; and 

3) a Recognised Organisation; this is particularly relevant to the marine and offshore services we deliver.

Our businesses currently have plans in place to mitigate the risks and deal with all possible outcomes in these areas. 

Manufacturing sector 

We want to assure you that we recognise the potential issues of Brexit on the UK manufacturing sector. Whatever the outcomes of the Brexit negotiations may be, you will be supported by LR throughout the process. In the event that the UK is no longer allowed to operate with its own EU Notified Bodies, LR will move any affected services it holds accreditation or appointments for to another EU country. LR already holds several appointments and accreditations, including Notified Body status, within other EU27 countries. Currently there are several options being explored and a decision is expected within the next two to three months.

Marine and offshore sector

In the marine sector, as LR is an EU Recognised Organisation we are required to be sponsored, (for the purposes of ensuring compliance with Regulation (EC) No 391/2009, Article 8, paragraph 1) by an EU Flag. We are currently sponsored by the UK, and have therefore put in motion the process of transferring sponsorship to another major respected EU seafaring nation, with which we already have an agreement in place, with effect from 1 May 2017.  

Our global accreditation by the United Kingdom Accreditation Service (UKAS) allows us to deliver services for the assessment of monitoring plans and verification of emissions reports for maritime transport subject to Regulation (EU) 2015/757, monitoring, reporting and verification of carbon dioxide (CO2) emissions from shipping activities, also known as MRV Regulation.  We are putting in place contingency plans to transfer accreditation and flag status - should this be required - to ensure that our services within this arena remain uninterrupted.

There is no cause for concern at this stage. LR’s intention is to make any necessary transfers as seamless and painless as possible. Further information will follow once we have finalised our plans.

LR’s preferred outcomes

While the shape and nature of the exit continues to evolve, we will contribute to the voice of UK business to represent LR’s desired outcome. In general, LR is supportive of the position taken by the Confederation of British Industry (CBI), the UK employers’ group, which has identified five core outcomes that UK Business requires from Britain’s negotiations with the EU.   

  • Tariff and barrier-free access to the single market
  • Access to skills and people
  • Regulatory equivalence
  • Strategy for agreeing trade deals with other parts of the world
  • Protection for benefits derived from EU-funded projects

LR continues to monitor developments closely and will update clients as and when the need arises. Regardless of the negotiation outcome, we are confident that LR will continue to provide global services to our clients in the same manner and high standard as we have done throughout its long history. 

Contact us

If you would like to discuss a particular aspect of our service or our position, please get in touch with your client manager or Tom Boardley, Executive VP and Global Head of Corporate and External Affairs (tom.boardley@lr.org).