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UK minerals chemical firms to suffer from Brexit - ECHA

By IM Staff
Published: Friday, 03 November 2017

The European Chemicals Agency (ECHA) has warned of the major impact on British minerals-sector chemical suppliers and their trading partners in Europe, should the UK go ahead with leaving the European Union (EU) as planned, on March 29, 2019.

By Keith Nuthall and Sarah Gibbons

ECHA has released a database seeking to advise chemical producers of how their legal obligations will change.

"If your business is in any way part of a supply chain that links you to businesses located within the 27 EU member states remaining after the UK’s withdrawal, you will face some fundamental changes," ECHA warned British companies.

Importantly, UK-based suppliers of any minerals-processing chemicals and, indeed, chemicals that are made from processed minerals will have an obligation by May 2018 to register chemicals that are made or imported in annual quantities of between one and 100 tonnes under EU chemical control system REACH. And yet, following Brexit on March 29, those registrations will become null and void.

As a result, their EU-based customers (or those in the European Economic Area (EEA) – countries of Norway, Iceland and Liechtenstein), may have to re-register such chemicals themselves if they want to continue buying them from the British supplier that registered them initially.

There are two other options, ECHA guidance said. The British chemical manufacturer will have to relocate to the EU or EEA, or appoint what is called an 'Only Representative’ within the EU/EEA. This is a company or person that is authorized to make the relevant filing under REACH and would be legally responsible for ensuring a British exporter complies with EU rules.

Also, there are also significant changes for a UK company that was a lead registrant for chemical registrations involving other companies, including those remaining in the EU. After Brexit, these registrations would also expire, warned ECHA, and companies wanting to ensure their products can be legally sold under REACH would have to appoint a new lead registrant, the British lead registrant would have to move to the EU, or it would need to become an EU-based 'Only Representative’.

There is also potential serious concern over the use of chemicals that are sufficiently toxic that they require a special REACH authorization to be used in the EU market. These are held by the companies supplying such chemicals. Where these are British, after Brexit, "the respective REACH Authorization will lose its legal effect with the date of the UK withdrawal" and so the EU purchaser will not be able to buy these chemicals from the British supplier, said ECHA. Any buyer of such chemicals in the EU or EEA will have "to assure you that you or one of your upstream suppliers based in the EU has obtained a REACH Authorization for the respective use of the substance, taking the place of your UK-based business partner," said ECHA.

Another potential risk for UK companies is over biocides, notably those used by mineral companies as disinfectants. The EU is undertaking a review of all biocidal chemicals used in Europe to check their safety under the EU’s biocidal products regulation (BPR). Ultimately, biocidal chemicals sold in the EU need to be formally authorized under the system, with authorization holders having to be established within the EU, Iceland, Liechtenstein, Norway or Switzerland. So, UK companies with an authorization to sell biocidal chemicals into these EU and associated companies will have to seek authorization to do so from a company based in these export markets.

There is less concern over the fact that a 'Brexit Britain' would not be covered by the EU’s classification labelling and packaging (CLP) regulation, mainly because it is assumed that this law would end up on the UK Statute Book, via the governments so-called 'Great Repeal Bill’. Furthermore, the labelling elements of this legislation that are based on the United Nations’ Global Harmonised System (GHS) will remain obligatory in Britain because the UK will still implement the GHS. "Thus, for example, the pictograms will be valid within the UK," said ECHA.

Faced with such disruption, the UK Chemical Industries Association (CIA) has said a post-Brexit deal allowing UK companies to retain their links to the REACH system and continue using ECHA’s services is the only option that would not leave British chemical businesses facing additional costs and administrative burdens.

And regardless of the final outcome of negotiations, a transition period allowing the UK to remain within the framework of EU regulations is "essential" to ease into the transition phase and not cause unnecessary disruption, a CIA spokesman added. Since the outcome of the EU referendum last June, the association has been calling on the UK government to secure the validity of existing registrations and authorizations prior to Britain’s withdrawal from the EU.

"Our views are reflected in the recent Article 50 UK position on the continuity of the availability of goods on the market, where chemicals are specifically mentioned by the UK government as an example of where businesses that have undertaken compliance activities prior to exit, they should not be required to duplicate them. At present, however, we are not in the position to reassure our members this is also the view of the European Commission and of course we cannot pre-judge the outcome of the negotiations," a spokesman said.

Under a "UK out of EU REACH" scenario, the UK government and the EU should ensure that a process is established to avoid forcing companies to re-register chemicals in the EU, and avoid repeat or additional registrations in the UK, the spokesman added. "In a complex area such as chemicals regulations, a transition period that allows the UK to continue to remain within the framework of EU regulations in the interim will be essential to adapt to potential future changes and minimize disruption," said the spokesman.

The ECHA warnings, however, were "based on a worst case scenario" of the UK out of REACH on March 2019 with no deal having been struck, no regulatory co-operation established and all historic registrations becoming non-existent on that date, the UK CIA said.

Meanwhile, the European Chemical Industry Council (CEFIC) has also called for clarity around future EU-UK trading arrangements.

"Politicians on both sides must provide the earliest possible signal concerning how the EU and UK will trade in future so companies on both sides can continue their mutually beneficial trading relationship. Certainty will help chemical companies adapt and continue doing business in a rational and predictable manner. Decisions about continued investment can only be made based on long-term predictability," Marco Mensink, CEFIC director general, said. 

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