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1UK REACH: Regulation of Chemicals in the UK Post Brexit

UK REACH:Regulation of Chemicals in the UK Post Brexit


Brexit and the Consequence on Chemical Regulation 3

What are the Possible Options for UK Chemical Regulation Post Brexit? 4

What Might UK-REACH Look Like? 5

Complying with UK-REACH 6

Product and Process Orientated Research and Development Registration 7

What are the Implications of UK-REACH for Business? 8

Maintaining Access to the EU/EEA Market Post-Brexit 9

What are the Implications for Maintaining EU-REACH Registrations? 10

Cost Implications for Setting Up an OR 10

Key Actions You Need to Take Now to Manage Your Chemical Registrations Across the UK and Europe Post Brexit 11

Summary 12

Contents


The UK officially left the EU on 31 January 2020 entering into the 11-month post-Brexit transition period which itself ends on 31 December 2020. During the transition period the UK continues to follow EU rules and regulations, however what happens at the end of the transition period regarding many things, including regulatory alignment and free trade, is still uncertain. The UK and EU are keen to negotiate a trade deal post transition, but the exact nature of that deal is unclear.

On 23 January 2020, the EU Withdrawal Agreement Act received Royal Assent, passing the legislation that took the UK out of the European Union into UK law.

Until the end of the transition period, the UK will follow REACH, after that the exact nature of UK chemical regulation is unclear. This provides manufacturers, exporters and downstream users of chemicals with some questions:

▶ How do you go about importingor manufacturing chemicals intothe UK?

▶ What are the implications for UK companies manufacturing orimporting chemicals into the EUor EEA?

▶ How might Brexit impact the roleof organizations further down the chemical supply chain in both theUK and EU/EEA?

Brexit and the Consequence on Chemical Regulation

The EU member states want to see common standards and a level playing field in place across the EU and UK. The UK government, however, has indicated a preference for regulatory divergence from the EU with greater freedom to set their own standards, while still securing frictionless trade. Although the UK and EU have struck a deal to secure Brexit, the possibility of a ‘no-trade-deal’ post transition is also still a conceivable outcome.

What Does This Mean for the Regulation of Chemicals in the UK?In the EU, the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) legislation is the framework which regulates chemicals. All chemicals marketed in the EU or EEA (European Economic Area) must be registered in accordance with REACH by the European Chemicals Agency (ECHA).

This eBook tries to answer these questions based on current knowledge and insight to provide you with a simple guide to the possibilities you need to consider and how you could mitigate any consequences of REACH Brexit now.


What are the Possible Options for UK Chemical Regulation Post Brexit?The exact nature of the chemical regulatory framework in the UK will be determined by the extent of regulatory alignment or divergence delivered by any trade deal between the UK and EU after Brexit.

Figure 1: options for UK chemical regulation post Brexit

Given the previous uncertainty over achieving even a Brexit deal, plans are well underway for a ‘no deal’ scenario that creates UK-REACH – a version of EU-REACH with UK-specific legislation and its own infrastructure. In many ways this appears to be the most likely scenario post Brexit transition, regardless of the state of any deal.

UK creates UK-REACH, a new regulatory framework based on EU-REACH

UK creates UK-REACH, a new regulatory framework based on EU-REACH

In both these situations, the regulation of chemicals in the UK will follow UK-specific legislation and be implemented by a UK regulator – the Health and Safety Executive (HSE).

EU-REACH regulation will be transferred into UK law at the end of the transition period through enforcement of a Statutory Instrument (SI). This provides close alignment on chemical regulation in the UK and EU, at least in the short-term.

The regulation may diverge over time as trade deals with other countries and blocs may shape UK regulatory standards.

Previous suggestions related to the UK becoming an associate member of ECHA now seem very unlikely.

However, industry is lobbying for the UK regulatory authorities to have access to the ECHA database and participate actively without voting rights. How this would be achieved is unclear.

UK ceased to be a

member of the EU

UK continues to follow EU rules and regulations and implement

REACH decisions

UK ceases to be part of all ECHA bodies, committee and networks

UK no longer acts as a competent authority for EU-REACH

UK negotiates a new relationship with the EU that either maintains access to EU-REACH or it creates a highly aligned UK-REACH

31 JAN2020

‘No Deal’

Deal withRegulatoryDivergence

Deal withRegulatoryAlignment

OptionsPost

Transition

Brexit Negotiations onTrade Deal

End ofTransition

Period

Transition Period 1 JAN2021


What Might UK-REACH Look Like?

UK-REACH EU-REACH

Jurisdiction ▶ United Kingdom (UK) ▶ European Union (EU) and European Economic Area (EEA)

Regulator ▶ Health and Safety Executive (HSE) ▶ European Chemicals Agency (ECHA)

Regulation ▶ European Union (Withdrawal) Act 2018 (c. 16)

▶ The REACH etc. (amendment etc.) (EU Exit) (No. 2) regulation 2019. 2019 No. 758

▶ Regulation (EC) No 1907/2006

Substances affected ▶ Chemicals imported or manufactured in the UK >1 ton per annum

▶ Chemicals imported or manufactured into the EEA >1 ton per annum

Submission platform ▶ UK REACH-IT – this is not yet functional ▶ REACH-IT

To create UK-REACH legally, the UK government created a Statutory Instrument (SI) to legislate for transfer of EU-REACH laws on chemical regulation into UK law, as part of no-deal Brexit planning. The SI has now been signed by ministers and will come into force at the end of the Brexit transition period. The SI takes the existing EU-REACH regulation and enshrines it in UK law while also providing the necessary powers to the agencies enacting the legislation, namely the Health and Safety Executive (HSE) working with the Department for Environment, Food and Rural Affairs (DEFRA) and the Environment Agency. Table 1 provides an overview of the key information related to EU-REACH and UK-REACH.

Table 1: Comparison of EU-REACH and the proposed UK-REACH

The SI also enables the ‘grandfathering’ of substances registered in the UK under EU-REACH into UK-REACH. This recognizes the regulatory status of the substance in UK law and ensures it can continue to be manufactured or imported in the UK market.

Like EU-REACH, registration submissions will be via an electronic platform. Testing of this platform is ongoing and it will only be fully released when UK-REACH is enacted.


How you might comply with UK-REACH is partly dependent on your role in registration, manufacture, importation and usage of a substance.

Table 2 outlines the legal terminology related to these roles relevant to the UK – these are similar under EU-REACH.

To be able to register a substance under UK-REACH, the registrant must be a UK-based company or be represented by a UK-based Only Representative (OR) because legally only companies with a legal entity in the UK are allowed to submit or hold a UK-REACH registration. The same is true under EU-REACH; only companies with a legal entity in Europe are legally able to submit or hold an EU-REACH registration.

Complying with UK-REACH

Terminology Definition

Registrant The manufacturer or the importer of a substance or the producer or importer of an article submitting a registration for a substance.

Only Representative (OR) Registrant

This is a natural person or legal entity established physically within the EEA who is appointed by a manufacturer, formulator or article producer, outside the EEA, to take on all responsibilities for complying with the legal requirements for importers under REACH.

Importer Any natural or legal person established within the jurisdiction who is responsible for import of a substance.

Manufacturer Any natural or legal person established within the jurisdiction who manufactures a substance within the jurisdiction.

Downstream User Any natural or legal person established within the jurisdiction, other than the manufacturer or the importer, who uses a substance, either on its own or in a preparation, in the course of his industrial or professional activities. A distributor or a consumer is not a downstream user.

Table 2: Formal definition of role terminology

Further definitions can be found on the HSE website.

Essentially, to maintain a valid UK-REACH registration for substances already registered under EU-REACH, you must notify the HSE of any substances to be grandfathered and to follow up with additional data submitted as a formal registration within two years. There is a mechanism that allows UK-based downstream users to rely on an EU-based REACH registration by notifying their role in the supply chain under EU-REACH in order to avoid disruption of supply to the UK. Table 3 outlines the implications and actions needed to ensure UK-REACH registration of substances holding an EU-REACH registration for three different situations.


Substances imported or manufactured for research and development, which have already been granted an exemption under REACH, can be grandfathered into UK-REACH, by following a process similar to that outlined in Table 3.

Product and Process Orientated Research and Development Registration

Notifications to the HSE of any substances you want to continue marketing under UK-REACH can only be done once the transition period is complete and the UK-REACH IT capability is released.

UK-based company with existing EU-REACH registrations

EU/EEA-based company with existing EU-REACH registrations

Downstream users of EU-REACH registered substances, where the registrant is based in the EEA/EU

Implications for registration under UK-REACH at the end of the transition period

▶ The EU-registered substance needs to be grandfathered into UK-REACH law.

▶ Only UK held EU-REACH registrations can be grandfathered into UK-REACH. The EU-based company will need to make strategic decisions about the benefit of registering substances under UK-REACH, given the likely resource and cost implications.

▶ If they wish to do so they must appoint a UK-based OR to act on their behalf.

▶ Downstream users need to check that a substance is or will be covered by a valid UK-REACH registration.

▶ If this is not the case then the downstream user, if purchasing the substance at a volume of >1 ton per year, would need to either:

- become the importer and take on responsibility for registration under UK-REACHOR- change supplier for a UK-based, and UK-REACH-registered, supplier.

▶ There is a mechanism that allows UK-based downstream users to rely on an EU-based REACH registration by notifying their role in the supply chain under EU-REACH to continue import into the UK.

Actions needed for registration of a substance under UK-REACH

▶ Open a UK-REACH-IT account

▶ Notify HSE UK-REACH within 120 days of leaving the EU

▶ Submit full data set for your tonnage band to HSE UK-REACH within 2 years of the UK leaving the EU

▶ Open a UK-REACH-IT account

▶ Notify HSE UK-REACH within 180 days of leaving the EU

▶ Submit registration with full data set to HSE UK-REACH for your tonnage band within 2 years of the UK leaving the EU

Table 3: Implications and actions needed for registration of substances under UK-REACH


What are the Implications of UK-REACH for Business?Wider Business ImplicationsEU-REACH has been in place for over 10 years and it is estimated that in 2019, UK companies held over 9,329 REACH registrations which is 9% of the total submitted. This covers 4,917 substances and 1,282 companies. The UK Chemical Industries Association (CIA) estimates re-submitting EU-REACH registrations to UK-REACH could cost around half a billion pounds in total.

Challenges of Data SharingUK-REACH, like EU-REACH, will continue to apply a ‘one substance, one dossier’ approach. However, the data used in any European dossiers may need to be re-purchased for use in UK dossiers, because there is no automatic transfer right now. The implications for this are unclear; some data owners are authorizing access free of charge, while others are charging a percentage of the original fee – you will need to establish and negotiate this for your individual substance.

UK-REACH and perhaps establish the intentions of the current registrant regarding substance registration plans in the UK. They may have to find alternative suppliers, if their current supplier is not registering the substance under UK-REACH and may even have to become the importer and take on registration responsibilities.

Cost Implications for Individual Companies Going ForwardThere are specific costs that companies will now have to factor in for their financial planning:

▶ Set-up costs of an OR, if required

▶ Registration fees for the UK. Although there are no fees for grandfathering substances, the UKgovernment has indicated fees fornew substance registration underUK-REACH will be similar to thosecurrently charged by ECHA using the average exchange rate for 2017.

HSE recommends that UK-REACH registrants should download the latest version of their substance dossier from EU-REACH-IT before the end of the transition period.

Changes in Lead RegistrantUnder EU-REACH, Substance Information Exchange Forums (SIEFs) and consortia exist to implement the ‘one substance, one dossier’ approach with a lead registrant driving a registration forward and joint registrants adding dossier information relevant to their usage. Under UK-REACH, new arrangements for joint registrations may be required with new lead registrants.

Implication for Downstream UsersDownstream users of substances registered by EU/EEA-based companies may be severely impacted by UK-REACH. Downstream users will have to spend time checking on the registration of substances under


Although uncertainty exists over the exact nature of the chemical regulatory system in the UK after Brexit, EU-REACH systems and processes will remain intact.

However, after the transition period, the UK will be outside the EU and have no legal access to the EU/EEA chemical market, in addition any existing substance registrations from UK registrants will be removed from EU-REACH.

To continue marketing a substance in the EEA-27, a UK manufacturer must transfer their existing EU-REACH substance registration to an EU-based company or Only Representative (OR).

Maintaining Access to the EU/EEA Market Post-Brexit

The ECHA has provided detailed guidance on how to do this but in brief you need to:

▶ Appoint an EU-based OR ▶ Initiate transfer of your registrations before the end of the transition period. If it is not possible to appoint an OR in the EEA-27 then a new registration may be needed.

EU based downstream users of substances from UK-based registrants need to check the registration status under EU-REACH and act accordingly, as outlined in Table 4.

UK-based company with existing REACH registrations

Downstream users of EU-REACH registered substances, where the registrant is based in the UK

Actions needed to maintain registration under EU-REACH

▶ Appoint an EU-based OR.

▶ Initiate the transfer of your registrations before the end of the Brexit transition period. If it is not possible to appoint an OR in the EEA-27 then a new registration may be needed.

▶ Downstream users should check the ‘List of substances registered only by UK companies’ on ECHA’s website.

▶ To maintain supply from the UK after Brexit, they should register the substance themselves as an importer, unless an Only Representative has been appointed for that registration in the EU-27/EEA.

Table 4: Actions needed to maintain REACH registrations from UK-based registrants under EU-REACH


What are the Implications For Maintaining EU-REACH Registrations?

Cost Implications for Setting Up an OR

Downstream Users May be ImpactedAs under UK-REACH, downstream users may be impacted by having to confirm EU registration status of a substance, source alternative suppliers or take on the role of importer/registrant.

Changes in the Make-Up of Joint RegistrantsThe Substance Information Exchange Forums (SIEFs) and consortia set-up under EU-REACH may change, for example, lead registrant’s role may change and a joint registrant may be required to take the lead.

There are cost implication for setting up an OR in the EU, both related to agreements with the OR entity and for the ECHA cost of transfer fees to a new legal entity (€1,631 per transfer).

Reduced Experience and Expertise in ECHAAs an EU member state, the UK has been an active participant in the development of REACH, bringing scientific and regulatory expertise and insight to ECHA. The HSE is also one of the most experienced EU Competent Authorities, responsible for handling the evaluation of substance dossiers. With Brexit, the EU loses that expertise and the capacity the HSE offers for evaluations.

Furthermore, ECHA can only employ individuals who hold passports from member states, so the contracts of UK nationals will be terminated after Brexit unless they hold joint passports for EU member states.


Key Actions You Need to Take Now to Manage Your Chemical Registrations Across the UK and Europe After the Transition PeriodDespite the lack of clarity regarding the future trading and regulatory status of the EU and UK after the Brexit transition period there are key actions you can take to help you prepare for the future:

01 03

02 04Use this as an opportunity forsome strategic market review:

Review your market and forecaststo establish which products you

wish to maintain in one orboth markets.

Communicate with yourdownstream users:

Establish your downstream supply chainin both markets and communicate thedifferent possible registration scenarios

available. This may provide insight in how best to proceed and establish the appetite

for downstream users to take onsubstance registration.

Make any UK-to-EU transfersas soon as possible

As you only have until the end of thetransition period to complete, so transferyour substances to an EU-based OR as

soon as possible. Covance have an establishedOR with over ten years of experience in REACH

regulation and have valuable insight on howbest to transfer substance registrations

as swiftly as possible.

Plan how to maintainregistrations in both markets:Put some specific plans in place to

run the registrations in two marketsas efficiently as possible. You may findthat by notifying all substances, you canbuy some time for further fine-tuning.


Despite the uncertainty over a long-term trade deal, both the UK and EU have put transitional arrangements in place to ensure existing substance registrations remain valid in both markets at the end of the Brexit transition period.

The transitional arrangements in the UK will become clearer with time, but there are some key actions that can be taken now to help mitigate any risk to continuing the supply of your substance. The main one is to notify HSE of any substances you want to continue marketing under UK-REACH, this can only be done once the transition period is complete and the UK-REACH IT capability is released. Notification will buy you time to decide on the next strategic step for each substance. It’s important to engage with downstream users, as their role may change and you may need to work with them to ensure the ongoing availability of your substance in the UK market.

Summary

To maintain access to the EU/EEA market, consider setting up an OR and transferring substance registration to them.


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