The UK Government seeks to maintain continuity of chemical regulation (Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH)) as part of a "no-deal" Brexit.
The UK Government published a technical notice “Regulating chemicals (REACH) if there’s no Brexit deal” in September this year. The notice summarises the UK Government's intention to maintain continuity through legislation which would preserve REACH as far as possible, while making technical changes that would reflect the fact that the UK would have left the EU.
What is REACH?
REACH is a key EU Regulation which regulates the production and use of chemical substances and their potential impacts on both human health and the environment and is managed by the European Chemicals Agency (ECHA). REACH also establishes the mandatory process by which chemical substances may be placed on the EU market.
September 2018 Technical Notice
In September this year the UK Government published a technical notice stating that in the “unlikely event of a no deal, the UK would ensure UK legislation replaces EU legislation via the EU Withdrawal Act, establish a UK regulatory framework and build domestic capacity to deliver the functions currently performed by ECHA. The legislation would preserve REACH as far as possible, while making technical changes that would need to be made because the UK has left the EU”. However, in a “no deal” scenario the UK “would not be legally committed to medium or long-term regulatory alignment with the EEA”.
The “light touch” proposals would ensure continuity of business by carrying across existing REACH registrations held by UK-based companies directly into the UK’s replacement for REACH, and “grandfathering” the registrations into the UK regime. A notification process for UK companies importing chemicals from the EEA before the UK leaves the EU will be introduced for those that do not hold a REACH registration. Also, all existing authorisations to continue using higher-risk chemicals held by UK companies will be carried into the UK system.
Criticism of UK Brexit proposals
On 07 November this year the House of Lords EU Energy and Environment Sub-Committee (the Committee) published its report on BREXIT arrangements and raised concerns over a lack of planning by the UK Government in the event that, post-Brexit, the UK no longer participates in REACH. The report also sets out the actions the UK Government will need to consider where such participation is no longer possible, and the UK is subsequently required to establish its own independent chemicals system.
Earlier this year EU officials raised concerns that suggestions by the UK Government and the EU chemicals industry that the UK could retain some form of membership of ECHA post-Brexit - to allow chemical products to be assessed by only one approval mechanism in order to access both UK and EU markets - were unworkable. The intention of the proposed system of “mutual recognition” is no doubt to protect the UK’s second largest manufacturing industry, which last year sent 61% of its chemical exports to the EU, with the EU having provided 73% of the UK’s chemical imports. However, EU officials have been clear that “the UK's decision to leave the single market automatically implies leaving the European agencies….” Whilst the UK Government continues to aim for on-going participation in REACH and ECHA post-Brexit, the Committee has called for the UK Government to plan for an independent UK chemicals regime in the event that such participation cannot be secured.
Some of the issues which the report states would need to be addressed, and which are in fact touched on in the September 2018 technical guidance notice referred to above, include:
1. invalidity: unless the Department for Environment, Food and Rural Affairs (DEFRA) is able to legislate preventative provisions, all current REACH registrations will become invalid in the UK and, regardless of UK legislation, all REACH registrations made solely by UK companies will become invalid in the EU. Invalid registrations will prevent the trade and use of associated chemicals;
2. replacing the REACH database: the UK chemical regulation body would need a new IT system and the data to populate it in order to register chemicals in the UK. DEFRA estimates that setting up this database will cost £5.8m but it is not clear how, or whether, existing data-sharing agreements could continue to be used by UK companies outside the EU, not least because of copyright and data protection concerns. The result is that large teams would be required to operate a registration function and carry out substance evaluation;
3. costs to business: it is not yet clear how registrations by UK companies might be transferred/how those substances would be re-registered with ECHA and what the related costs would be. Cost concerns relate not only to registrations themselves but the administrative and regulatory burdens on companies which place multiple substances on the EU market. Significant cost increases are also anticipated as a result of duplication of work to secure continued compliance with REACH, including duplicate research and testing, particularly where data-sharing is no longer permitted.
With mounting pressure from the UK chemicals industry, it is crucial that the UK Government provides clarity on its proposals for a system of chemical registration and recognition in the event that the UK no longer participates in the EU chemical regime post-Brexit. Whether a new UK system will automatically accept EU-led REACH registrations needs to be made clear so that affected business are able to prepare for a potential “cliff-edge” of losing access to some 16,000 substances. Whilst it has been suggested that UK businesses concerned with the on-going validity of their REACH registrations should consider transferring registrations to, or establishing EU-based subsidiaries, the legality of such proposals has been called into question and the UK Government has yet to propose any substantive transfer mechanism. A failure to plan adequately for the UK’s possible expulsion from the REACH regime could lead to unnecessary costs to business and a reduction in the UK’s global competitiveness in the chemicals industry and market.
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