On December 31, 2020, the transition period designed to finalize the details of the UK’s withdrawal from the European Union (EU) will come to an end. If no deal between the two blocs is struck, a “no-deal” Brexit will be realized, impacting most aspects of European life, from trade, to travel, to regulation.
The regulatory divergence between the UK and EU will have significant consequences on companies operating in Europe. There is still much uncertainty as to what the future holds for the UK regulatory landscape, but as we draw closer to the deadline, more is becoming clear, particularly as it pertains to the Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH) Regulation.
Regulatory Alignment Between the EU & UK
The REACH Regulation, which seeks to protect people and the environment from the use of substances of very high concern (SVHCs) within products, is one of the most impactful product regulations to emerge from the EU. Early in the transition period, companies feared the UK would diverge from EU rules, multiplying regulatory requirements for companies and substantially increasing costs.
Recent guidance from the UK government should alleviate some of these concerns as it affirms the validity of EU REACH registrations for use in the incoming UK REACH system. This will be managed by the Health and Safety Executive (HSE).
Earlier this year, then-Chancellor of the Exchequer, Sajid Javid, said that there would be no regulatory alignment between the UK and EU. The statement was met with warning cries from companies and industry groups, as the estimated cost of managing Brexit regulatory divergence was estimated to be in the hundreds of millions of pounds.
While the doubling of regulatory requirements caused by a clean break from the EU REACH Regulation appears unlikely to materialize, companies in Great Britain (England, Scotland, and Wales) will be impacted from January 1, 2021. However, companies based in Northern Ireland are set to continue under EU REACH rules, as they did prior to Brexit.
Concerned about your REACH requirements? Download The REACH Handbook: Your Guide to SVHC Compliance, for a comprehensive guide on the REACH Regulation and what it means for your company.
Grandfathering
Registrations
Under the EU REACH Regulation, any company operating in or importing into the EU is required to register substances used in quantities of over one metric ton per year. The registration is essential in order to place a good on the European market. Great Britain-based companies with registrations to the EU REACH Regulation from March 29, 2017, onwards will have those registrations “grandfathered” (meaning legally recognized by the UK REACH system), ensuring continued market access after the end of the transition period.
The companies do still have requirements at the end of the period, however. According to UK guidance, companies with grandfathered registrations must:
- Open a UK REACH-IT account.
- Provide initial information on the existing registration within 120 days of the end of the transition period.
- Provide technical data required under UK REACH within the established timelines.
The timelines for UK REACH data differ based on the tonnage and hazard posed by the substance in question. For example, substances used in quantities of 1,000 metric tons or more per year, or substances that are known carcinogens, must be registered under UK REACH within two years from October 28, 2021. Substances used in quantities of between 1–100 metric tons but with no known hazards have six years from that date to be registered.
Authorizations
Companies may use some SVHCs in manufacturing provided they have received a REACH authorization from the European Chemicals Agency (ECHA). Similar to EU REACH registrations, existing authorizations will be grandfathered into UK REACH. For this to occur, companies must provide the HSE with:
- Information included in the authorization application within 60 days of the end of the transition period ( March 1, 2021).
- All information submitted to ECHA that was material in their decision to grant authorization.
- Other required information.
Impact on EU-Based Companies
Any Great Britain-based company with suppliers in the EU that provide substances that fall under the scope of the REACH Regulation, will be considered importers under UK REACH. Under the EU REACH Regulation these companies would be considered downstream users or distributors. To continue importing these substances, the company must either register the substance as an importer, or the supplier must appoint an Only Representative based in Great Britain to register with UK REACH on its behalf. Northern Ireland, while still following the EU REACH Regulation, is not a part of the EU, and has different rules in place for exporting substances.
EU-based companies are treated as “third countries” under UK REACH, meaning substances and mixtures destined for Great Britain must be registered in a fashion similar to the process described above. Importers or distributors of substances originated from the EU, as well as the Only Representatives of EU-based companies, have 300 days from the end of the transition period to register for UK REACH with the HSE.
Companies that wish to place a new product or substance on the market in the EU and UK will be required to meet the requirements of the original EU REACH and UK REACH regulations.
Potential Deals
Brexit has impacts that stretch far beyond the REACH Regulation, and both parties have been negotiating for the past couple of years to find a workable solution to the UK’s withdrawal. A trade deal between the two is the highest priority item, and talks remain underway and are likely to continue even if an initial deal is struck by December 31. It is likely that aligning regulations, which is beneficial to both parties and the companies within them, will be a part of similar negotiations. The above guidance is up-to-date as of the publishing of this post, but may be subject to change.
How Assent Can Help
Regulatory requirements place a heavy data burden on companies. Uncertainty and changing regulations increase the cost and difficulty of meeting the requirements necessary to secure and maintain market access. Assent already provides over 500 companies with an automated solution to acquire, manage, and analyze supply chain data necessary to meet compliance requirements. To learn more, contact us today.
