Why a no-deal Brexit is bad for the UK chemical industry: The REACH Regulation

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No-deal Brexit

The UK is currently set to leave the EU on 29th March 2019.

The UK government’s preferred plan is for a negotiated agreement with the EU, and this would give a transition period from 29th March 2019 to 31 December 2020 in which to discuss the future relationship with the EU. During the transition period, the rules governing chemical supply, such as the REACH and CLP Regulations would continue, so there would be no disruption to supply chains.

In the future relationship discussion document, [i] the UK government indicates its intention to partner with ECHA even after the transition period, presumably to allow REACH registrations made by UK companies to continue to be valid within the EU, and prevent the UK government from having to duplicate the functions of the European Chemicals Agency (ECHA). There are no examples of a non-EU country partnering with ECHA in this way.

Parliament voted down the EU Withdrawal Act, enhancing the prospect of a no-deal Brexit. A no-deal would burden all UK companies having business partners in the remaining EU member states, particularly regarding trade tariffs, VAT accounting, border controls, and haulage.[ii]

Brexit and REACH overview

The chemical industry will be especially vulnerable to the sudden change in regulatory landscape should the UK leave the EU without an agreement. The EU REACH Regulation has been transposed into a new draft ‘UK-REACH’ law.[iii]  These Regulations replicate REACH in the UK whilst making the changes necessary to make it work outside of the EU, for example in fulfilling the role of the European Chemicals Agency (ECHA). UK companies importing or exporting in the EU will have to contend with both EU and UK regulatory systems, duplicating the time and effort of compliance.

The UK authorities have an obligation to protect human health and the environment to the standards currently set in the EU. But after a no-deal Brexit, they will have no access to the chemical hazard data compiled by ECHA on 22 000 chemical substances in commercial use. UK chemical companies will be compelled to re-populate a new UK database by submitting new registration dossiers for those chemicals used commercially in the UK.

No-deal Brexit: disposal of currently held EU REACH Registrations

In a no-deal scenario, the day after the UK falls out of the EU regulatory system (currently scheduled as 30th March 2019), REACH registrations held by UK companies will no longer be valid for exporting chemicals to the EU. The UK registration holder should transfer the registration, using the REACH IT system, to a company in one of the remaining EU countries.

The UK REACH Registration holder can only transfer to one EU company, so what happens if you have multiple EU customers? EU REACH allows multiple importers to be covered by a single company –  the so-called ‘only-representative’ (OR) route. A problem with OR route under the current arrangements is that a UK company will not be able to appoint an OR before Brexit (as only a non-EU company can appoint an OR), and it cannot transfer the registration after Brexit, as the registration is invalidated on exit day. We can only hope there will be a pragmatic solution to the OR problem.

No-deal Brexit: compliance with UK REACH.

The second-part of the double-whammy is that the UK company would have to re-register substances they manufacture, or import from outside the UK, under ‘UK REACH’.

The process has two stages:

  1. Enter basic information into the new UK REACH-like IT system
  2. Within two years (currently 29 March 2021), the company should submit a full dossier (including robust summaries of the test data that many joint-registration holders may not have easy access to)

This two-year deadline is considered unrealistic by most UK registration holders, due to the difficulties of accessing data. Many smaller UK companies importing products from the EU will be faced for the first time with the responsibility of REACH-like registration procedures, and lack the capacity or expertise that this requires. They may have to rely on consultants for UK-REACH compliance, or on their EU suppliers appointing a ‘UK-only representative’ to take over the burden.

It is expected that the additional regulatory burden will lead to short-term supply chain disruption owing to the complex supply chains common to chemical production. In the longer term, costs of chemical product in the UK will inevitably increase owing to costs of dual regulatory compliance, and some chemical substances will be withdrawn from the UK market as they become economically non-viable.

Alchemy Compliance has 22 years of regulatory experience with industrial chemicals, in EU REACH Registration, safety data sheet compilation (EU, US, and beyond), and chemical hazard assessment. Contact us: info@alchemycompliance.com; phone +44 115 8781488, visit ww.alchemycompliance.com, or see LinkedIn pages for Mel Cooke at https://www.linkedin.com/in/mel-cooke-64876145/.

[i] The Future Relationship Between the United Kingdom and the European Union; Cm 9593, July 2018.

[ii] Partnership pack: preparing for changes at the UK border after a ‘no deal’ EU Exit; H M Government; December 2018.

[iii] Exiting the European Union Consumer Protection, Environmental Protection, Health and Safety; The REACH etc. (Amendment etc.) (EU Exit) Regulations, 2019.