Brexit and REACH: What does it mean for products companies?

With the EU Chemical Agency's recent announcement that four new substances will be added to the Candidate List1, you might be thinking: what's next for the UK and its chemicals legislation?

From product packaging and wrappers to your phone, television and the socks you're wearing, man-made chemicals are in almost everything we touch. As a result, the chemicals sector has grown to be the UK’s second biggest manufacturing industry. It has also become heavily regulated to ensure a high level of consumer and environmental protection against the risks posed by chemicals.

One of the most complex chemical regulations worldwide has been produced by the European Union: the Registration, Evaluation, Authorisation, and Restriction of Chemicals Regulation (1907/2006) (commonly known as REACH). With the UK having left the European Union (EU) on 31 January 2020, what does this mean for the UK chemical industry – an industry which feeds heavily into other manufacturing sectors?

Short answer: it's still unclear.

The original position

Before 31 January 2020, chemicals in the UK were regulated by REACH. Under REACH, substances manufactured or imported into the EU must be registered with the European Chemicals Agency (ECHA) who acts as the leading authority in the EU. The Health and Safety Executive (HSE) was the enforcing authority in the UK, supported by the Environment Agency.

On 31 January 2020, the European Communities Act (1972) was repealed and the UK formally left the EU.

Despite this, things will remain largely the same until the end of the transitional period.

As of 1 February 2020: the transitional period

As of 1 February 2020, a transitional period began pursuant to the Withdrawal Agreement and the associated UK implementing law (the European Union (Withdrawal Agreement) Act (2020) (the Withdrawal Act)). This transitional period is currently set to last until 31 December 2020.

This means that despite the fact that the UK is no longer formally an EU Member State, under the terms of the Withdrawal Agreement, almost2 all EU law will continue to apply in the UK until the end of this year. For now, nothing will therefore particularly change; with REACH continuing to apply in the UK and UK companies still being required to register any new chemicals under REACH with the ECHA.

During this relatively short timeframe, the UK and EU have the opportunity to negotiate the form of their future relationship. The transitional period can be extended by up to two years; however the UK Parliament has made clear that for them, this isn't an option.

As of 1 January 2021

Once the transitional period has ended, two scenarios are possible: (i) a deal Brexit or (ii) a no deal Brexit.

In the event of a deal Brexit, a new trade agreement with the EU would be negotiated. This would be ready to come into effect on 1 January 2021 and is likely to mean the current version of UK REACH (as defined below) will not come into force.

In the event no new trade agreement is agreed, this will mean a no-deal Brexit. This - combined with no agreement to extend of the transition period - would mean the UK and the EU would still have no international agreement governing its relationship.

Potential consequences of: a deal and no-deal Brexit

Following the end of the transitional period, if a deal is reached, the UK could continue to be an active participant of the ECHA (albeit without voting rights). This may mean 'business as usual' for the UK, with for example, UK businesses being able to continue to register their chemical substances directly, rather than having to work through an EU-based representative (as is required of manufacturers in third countries). This of course depends on the terms of the deal reached.

If no deal is reached, the UK will need to lay down its own rules and regulations and would be under no legal obligation to continue to align its' chemicals regime with that of the EU.

UK REACH?

In its preparations for a no-deal Brexit, the UK drafted the REACH (etc.) (Amendment etc.) (EU Exit) Regulations 2019 which create a UK version of REACH (UK REACH). In the event of a no-deal Brexit, UK REACH (or some version of it) would come into force at 11pm (UK time) on 31 December 2020. Whilst the current version of UK REACH is heavily based on REACH, the UK Government has indicated that divergence from EU law should be expected in the case of a no-deal Brexit. What the end version of UK REACH will look like is yet to be seen.

Under the current version of UK REACH, existing authorisations for higher-risk chemicals held by UK companies would need to be 'grandfathered' into the new UK regime. The HSE, whilst maintaining its current status as the UK competent authority, would also take on a number of substantial additional functions.

As just one example, chemicals supplied to the EU would continue to be registered with the ECHA, whilst chemical entering the UK would need to be registered separately with the HSE. This means companies supplying chemicals across the UK and the EU would be required to register the substance twice. This is likely to result in longer registration times and increased registration costs – a cost that will need to be spread across the supply chain. Some chemicals may also become unavailable on the UK market (with producers of such chemicals being unwilling or unable to take on the associated additional financial and administrative burdens).

The ECHA has over 500 staff from 27 European countries, a considerable annual budget and cooperation agreements with regulatory agencies across the world. The sharing of information, knowledge building opportunities and resources of the HSE will be much more limited than the current system under REACH provides. It is important that this does not mean the level of protection afforded to UK consumers is reduced.

Everything now hangs on how productive the discussions between the EU and the UK prove to be.

We will continue to monitor updates in this area.


1. See here: https://echa.europa.eu/-/four-new-substances-added-to-candidate-list

2.Unless otherwise listed at Articles 126-132 and Annex VII of the Withdrawal Agreement as a piece of EU legislation that does not apply during the transition period.


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