Brexit and UK Chemicals Regulation (UK REACH)

Posted by

As of 31st January 2020, the UK is no longer a Member State of the EU. A transition period is currently in place, until 31 December 2020, so that important EU regulations on the safe use of chemicals, such as REACH (Regulation 1907/2006) and CLP (1272/2008) will remain in place until then. So, during 2020, UK – EU market access and trade, will continue on the same terms as before the Brexit date.

Frictionless trade?

The regulatory landscape after the end of this transition depends on the results of trade negotiations between the UK and EU. The UK Chemicals Industry [1] has called for:

  • Frictionless, free trade
  • Regulatory consistency and alignment

This would protect UK trade worth £55.5 billion/year, with the majority of UK chemical export and imports to and from the EU.

In the future relationship discussion document from 2019 [2], the UK government indicated its intention to partner with the European Chemicals Agency (ECHA) after the transition period, which would enable UK Government access to the ECHA database on chemicals. The database is a leading resource in chemical safety management, developed over 10 years from information supplied to ECHA by the UK and EU chemical industry as REACH registrations, at a cost of €2.1 billion. UK partnership with ECHA would also allow UK companies to maintain their status as EU registration holders.

These aspirations are in doubt, with the UK Government stating their intention to reject any trade deal that includes ‘high alignment’ on regulation, instead preferring a looser trade deal based on the Canadian or Australian models. The UK Prime Minister has expressed hope for ‘no tariffs, fees, charges or quantitative restrictions between the UK and the EU,’ but the EU negotiating team have stated that regulatory alignment is necessary for frictionless, tariff-free trade.

Post-Brexit REACH Registrations

In Canadian- or Australian-style trading scenarios, highly regulated industries, such as that for UK chemicals, are likely to fare badly in trading with the EU, compared to current practices. If the UK is no longer part of the EU Single Market, import duties and border delays are likely to reduce UK competitiveness in the complex supply chains of modern chemical production. The UK Chancellor has warned UK companies to adjust to this new reality [3].

If there is no regulatory alignment, either in the trade deal or from no trade agreement being reached during the short transition period, the REACH registrations held by UK chemical companies with ECHA would no longer be valid, and will have to be transferred to EU companies.

UK companies importing or exporting in the EU will have to contend with both EU and UK regulatory systems, duplicating the time, effort and cost of compliance. The UK government will have to duplicate the functions of ECHA.

Compliance with UK REACH

UK companies will also have to develop new registration dossiers for a new ‘UK REACH’ law, which will become effective in January 2021 [4]. The process for compliance has two stages:

  • Within 60 days of the end of the transition period, enter basic information into the new UK REACH-like IT system.
  • Within two years (currently 1 January 2023), the company should submit a full dossier (including robust summaries of the test data, to which many joint-registration holders may not have easy access).

This two-year deadline is considered unrealistic by potential UK registrants, due to the difficulties of accessing detailed test 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 burdens 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.


References

[1] Britain at work; Chemical Industries Association; November 2019. [back]

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

[3] Financial Times, Forget staying close to EU after Brexit, chancellor tells business; 17 January 2020; https://www.ft.com/content/18ddc610-3940-11ea-a6d3-9a26f8c3cba4. [back]

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


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 for more information.