The UK Government’s no-deal Brexit plans for REACH and chemicals regulation

• United Kingdom

• Brexit
• Other
• Chemicals
• Industrials - Chemicals

02-10-2018

“Regulating chemicals (REACH) if there’s no Brexit deal” is one of the UK Government’s latest technical notices setting out information in the event of a no-deal Brexit scenario in March 2019, published 24 September 2018.

The UK Government has stressed that the no-deal scenario remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome. However, it is keen to ensure that plans are in place in the event they need to be relied upon, to allow businesses and citizens to make informed plans and preparations.

The no-deal plans for chemicals

UK legislation would replace EU legislation, with a UK regulatory framework for chemicals, preserving REACH as far as possible.

Existing standards of protection of human health and the environment would be maintained. HSE would act as lead UK regulatory authority. The Government states that the new UK regulatory framework would provide specialist capacity to evaluate the impact of chemicals on health and the environment, as well as ensuring sufficient enforcement capacity.

A UK IT system would enable the registration of new chemicals, similar to the existing EU IT system (we know that work is already underway on this).

Existing REACH registrations and authorisations held by UK-based companies would be carried across (“grandfathered”) directly into UK REACH. There would however be an element of re-registration. Those companies will have to open an account on the new UK IT system and provide basic information on their existing registration, by way of validation, within 60 days of the UK leaving the EU. Within two years from Brexit, they must provide HSE with the full data package that supported their original EU registration, held on the ECHA IT system. The challenge here is that most companies, being joint registrants, may not have physical/electronic copies of the relevant study reports themselves, but generally only a right to refer to them. Additionally, that access is most likely limited to use for EU REACH purposes, not for UK REACH.

For UK-based importers of chemicals from the EEA before Brexit who don’t have their own REACH registrations there will be a transitional light-touch notification process. These are companies which will have been relying on REACH registrations held by EEA-based companies for free movement of those chemicals around the EEA. The aim is to reduce the risk of supply chain interruption. Notification must be made within 180 days of Brexit, moving to full registration at a later date. The UK Government has not indicated when a full registration (including relevant data access) would be required and states that this would follow a review of this approach.

New chemicals placed on the UK and EEA markets will need two separate registrations for the UK and the EEA, with the same information and data package.

Any UK company with existing REACH registrations and wishing to maintain EEA market access will need to consider its options. One option is transferring those registrations to an appropriate EEA-based entity (such as an affiliate or Only Representative (“OR”)) or “develop new working relationships with their EEA customers”.

Some concerns

• the chemical sector has already expressed concern about increased administration and cost, as there is an element of duplication in the requirement for UK-based companies to re-register existing EU REACH registrations for UK REACH
• it’s clear that there would be no automatic recognition in the UK of EU REACH registrations (which the Government had been considering). New UK REACH registrations would be required for placing chemicals on the UK market in all scenarios save where “grandfathering” applies, see above
• while transferring existing REACH registrations to an appropriate EEA-based entity such as an affiliate or an OR is an option for maintaining EEA market access, bear in mind that the “grandfathering” arrangement may cease to be available for those registrations. It all depends on when the UK recognises “grandfathering” (ie if it only recognises REACH registrations held by UK-based companies immediately on Brexit then any attempt to transfer these registrations pre-Brexit will prejudice ongoing UK compliance efforts. Alternatively the UK may be prepared to take a more practical approach and recognise all REACH registrations held by UK entities in the month/six weeks prior to Brexit). As this position remains unclear, some UK companies are considering their options around a branch office solution, potentially enabling a “foot in both camps” with a view to maximum flexibility and minimum supply chain disruption
• it should also be noted that the Government’s technical notice does not address CLP, the Biocidal Products Regulation, or substances subject to product and process-orientated research and development (Ppord)

The CIA and Cefic have issued a briefing note “What you need to know - practical considerations to maintain trade post-Brexit”. It includes a flow chart describing how to prepare for a no-deal Brexit, from inventory assessment through supplier inquiry to action. It is acknowledged that preparations take time, and an early start is recommended at least in the case of a complex value chain.

In the meantime, the EU is reported to be stepping up its own preparations for a no-deal Brexit, seen as an indication of the EU’s own concern at the current state of Brexit talks. Brexit is clearly not just a UK issue. EU-based businesses whose supply chain involves the UK are advised to consider the impact of a no-deal Brexit on that supply chain. It is also important to note that EU-based companies which have joint registrations where a UK entity is the lead registrant also need to consider how Brexit will impact them and consider how the role of lead registrant can be transferred.