Brexit’s impact on supply chains is even more complex than a first look suggests. On the face of it, the premise for product regulation in the UK seems simple enough: until the end of 2020, organisations doing business within the EU, including the UK, had one common set of rules and from the beginning of 2021, there would be two ‘identical’ rulebooks with the new UK laws mirroring those EU rules already in place.
However, the reality was not so straightforward.
From the beginning of 2021, there is one rulebook for the EU, another for Great Britain (GB) and a third for Northern Ireland. These rules are extensive – they involve different requirements for different types of product – and demand a substantial level of expertise to understand and implement.
On top of this, the UK government recognised it had to make certain changes to be able to implement the EU requirements in UK and passed new laws setting out transitional measures. These amending regulations themselves had to be tweaked several times through further legislation to accommodate special circumstances that would otherwise have resulted in non-compliance and/or business interruption for many businesses.
Supply chains and compliance
EU and UK regulations place a range of requirements on the local organisations responsible for introducing these products onto the market that have direct and indirect consequences for supply chains and compliance. For example, under classification and labelling regulations that apply to chemicals and mixtures in both EU and UK, labels must include the name of the local supplier. From 1 January 2021 that means two sets of labels with different supplier information for the EU and GB, having first determined who the local supplier will be in each market.
Many organisations manufacturing or importing products such as chemicals, biocides and cosmetics will need to ensure their products are notified, registered and/or authorised in both the UK and the EU. Leaving such matters of regulatory compliance to customers could lead to a rapid erosion of local sales, and also lead to significant concerns and challenges around the protection of proprietary information, such as product composition. These considerations often prompt organisations to engage a local representative , that can take on these duties and safeguard business interests. Even then, a rationalisation of supply chains and products may be inevitable to simplify the regulatory burden and cut costs.
Many of the new requirements in the UK, such as those relating to labelling, apply immediately. However, the transitional measures under UK regulations governing chemicals (eg UK or GB REACH ) and cosmetic products include staggered deadlines for certain obligations so industry can deliver the substantial changes necessary to comply. Any organisation that wants to continue to sell chemicals – on their own or in mixtures – or products containing chemicals across these markets must carefully consider the implications and changes in the short term that will be necessary in most cases.
Time to act
Several of these deadlines are already imminent. For example, organisations that have already notified cosmetic products in the EU have until 31st March 2021 to be notified onto the equivalent UK system.
The first important deadline under the new GB REACH regime is 1 March 2021, the end of the 60-day post-exit period, by which time a number of important actions must be complete:
- Holders of an existing EU authorisation that wish to ‘grandfather’ the authorisation into the GB REACH system must inform the UK Health and Safety Executive (HSE) and supply it with relevant technical information.
- Downstream users of an existing EU authorisation that wish to be able to continue to rely on that EU authorisation must inform the HSE by notifying certain information, including details of the authorisation and the supplier of the authorised substance.
- UK-based producers or importers of articles that have notified the European Chemicals Agency (ECHA) of release of a substance from the article but not registered the substance must submit the same information to UK HSE.
In parallel, those wishing to grandfather existing EU REACH registrations into GB must prepare now. Grandfathering a registration offers several important benefits over submitting a new registration, not least avoiding additional registration fees. However, this facility is only available to the end of the 120-day post-exit period (30 April), beyond which full registrations will need to be submitted to the UK authorities. To grandfather a registration into GB, companies may need to set up a new GB Only Representative agreement specifically for GB REACH.
The last of the GB REACH transitional deadlines in 2021 falls 300 days post-exit (27 October). Companies that were previously covered by EU registrations but now find themselves in the position of GB importers can submit Downstream User Import Notifications (DUIN). These notifications allow those importers to take advantage of the staggered GB registration deadlines. As with grandfathering, this is a relatively simple administrative process but will require the collation of a significant amount of data for each and every substance involved, so the effort should not be underestimated. When DUIN are not submitted within 300 days, the obligation for a full registration comes into force.
Please don’t hesitate to contact us for support with any of these urgent deadlines.