With just one month to go until 29 March, UK based entities who hold or rely on REACH registrations must take urgent action to ensure continued access to the EU market after the UK’s withdrawal from the EU.

Existing UK REACH registrations will be VOID following the UK’s withdrawal and access to registrations on REACH-IT will be lost unless existing UK registrations are transferred to an EU entity before 29 March. The European Chemicals Agency (“ECHA”) has identified a ‘Brexit transfer window’ from 12 to 29 March to help companies make this transfer, but the most appropriate action will vary from one registrant to another and preparation is key to ensure a valid transfer.

For the UK’s own ‘UK REACH’ post-Brexit, recent guidance from the UK Health and Safety Executive (“HSE”) confirms that existing UK registrations will be ‘grandfathered’ under the new system for no fee, although the main registration dossier will have to be re-submitted. For UK based downstream users and distributors who currently rely on the REACH registrations of their EU suppliers, new UK registrations may be required, with fees per substance matching those under REACH (up to EUR 33,699 for the highest tonnage band).

In this alert we set out some of the key considerations for UK based entities holding REACH registrations or relying on registrations within the supply chain. It is clear that “time is of the essence” and that creative solutions by businesses may be required to avoid (1) losing access to REACH-IT platform or (2) doubling registration fees under the new UK REACH regime.

To help clients prepare, K&L Gates will be holding a webinar in March, with further details to follow.

UK registrations will be void post-Brexit unless transferred to an EU entity prior to 29 March
ECHA has recently released updated guidance on how to transfer UK REACH registrations prior to the UK’s withdrawal from the EU. In many ways, ECHA is taking a pragmatic approach to helping UK registrants’ effect the necessary transfers, yet takes a hard-line on registrants who fail to take the necessary action within the appropriate timeframe; existing UK registrations could be VOID post-Brexit and registrants will lose access unless the registrations are validly transferred to an EU entity pre-Brexit. If in doubt, all registrations should be transferred to an EU-based entity during the 12 – 29 March Brexit transfer window.

• Choosing the right type of transfer - manufacturers, importers or only representatives (“OR”): Any transfer to an EU entity must be a ‘valid’ transfer recognised under the REACH Regulation 1907/2006 and applicable guidance, and the type of transfer and strategy will vary for manufacturers, importers or OR. UK manufacturers and formulators have the option to appoint an OR based in the EU and transfer the UK registration to that OR. However for importers (including traders), the only valid means of transfer is to another importer in the EU by way of transferring the importer business and responsibility for import; this is more challenging and potentially requires substantial shifts in business arrangements. For ORs, whilst OR transfers may be more straightforward, new agreements with the EU based OR will need to be put in place prior to March 29, and UK-based OR service providers may face challenges agreeing with their clients on who bears the costs of establishing a new entity within the EU or paying ECHA for the transfer.
• ‘Brexit Window’ and timing: ECHA have allocated a ‘Brexit transfer window’ between March 12 to 29 to initiate REACH registration transfers to an EU-based successor, which enables the transfer to be initiated during this period and then completed after the Brexit date. The transfer will only be deemed complete where the successor pays the transfer fee within the extended due date (14 days after acceptance followed by an extended 30 day period); if not paid on time, the transfer will automatically be undone in REACH-IT and any remaining UK registrations will be void post-Brexit. Interestingly, in the event Brexit is delayed (or cancelled), there is no obligation to complete the transfer and existing REACH registrations will remain valid with the UK based entity.
• Using the ‘legal entity change’ option: On an exceptional Brexit-related basis, ECHA have taken the pragmatic approach of re-purposing the ‘legal entity change’ function in REACH-IT. Depending upon whether UK registrations will be transferred to a single or multiple successors, registrants should select either ‘merger’ or ‘split’ (even where no merger or split is in fact taking place). UK based manufacturers appointing an OR in the EU will also be able to utilise this function on REACH-IT.
• Preparing for the transfer: Numerous steps are involved to ensure the transfer is effective, including ensuring the successor is ready in REACH-IT and preparing the appropriate documentation and transfer agreement(s) required to be uploaded as supporting evidence. This may take time to get in place and agree with the relevant parties.
• Cost: A single fee of EUR 1,631 is payable to ECHA for each transfer (which may include multiple substances) to the same successor, and reduced fees apply for SMEs.
• Additional steps and considerations: Any transfer of a joint submission should have the agreement of the members before effecting the transfer. Registrants should also inform downstream users of the approach so that they can plan their actions accordingly, and contracts may need to be updated to reflect the new arrangements. After the transfer, the successor should ensure that the registrations on REACH-IT are up-to-date and assign a contact person to each registration, and the successor will become responsible for the relevant obligations under REACH going forward.

For UK market access, registrations held by UK entities pre-Brexit will be grandfathered
To ensure that REACH registrants based in the UK have continued access to the UK market, the UK HSE has confirmed that existing UK registrations held by UK entities at the time of exit or within the two years prior to 29 March will be legally recognised (i.e. ‘grandfathered’) in the UK REACH system at the point that the UK leaves the EU.

• Costs: UK HSE will not charge any fee for grandfathering registrations.
• Notification followed by full registration: UK registrants will need to open an account on the new UK REACH-IT system which the HSE plans to launch by the time the UK leaves the EU,and certain preliminary basic information must be submitted within 120 days of the UK leaving the EU. The full registration, including all information required under REACH, then needs to be provided within two years of the UK leaving the EU (this timescale will be kept under review).
• Full registration: The relevant information on the substance required under REACH will need to be provided within two years of the UK leaving the EU (this timescale will be kept under review). The information requirements for UK REACH will remain the same as the current REACH requirements.
• Supply chain considerations: Again, the new UK REACH regime and access to the registrations may require existing commercial contracts or letters of access to be re-negotiated, and early contact with joint registrants is advised. Transfer of the Lead Registrant’s IUCLID REACH file will be necessary for any joint registration to be valid in the UK.

Entities which currently rely on REACH registrations of EU based entities may need to apply for new UK registrations (potentially at significant cost)
UK companies currently procuring REACH registered substances and mixtures from EU suppliers will, post withdrawal, become importers under the UK REACH regime to be established in the wake of Brexit. Therefore, such companies will need to hold a valid UK registration as importers:

• Notification followed by full registration: UK HSE has currently proposed a free ‘notification’ system before full registration obligations apply for UK-based downstream users, which entails opening an account on REACH-IT and providing certain information within 180 days of the UK leaving the EU. UK based downstream users will then need to register the substances with UK HSE by providing the technical dossier appropriate to their tonnage band within two years of the UK leaving the EU; this timescale will be kept under review.
• Costs: The registrations will be considered as new registrations and therefore subject to the fees payable to the UK HSE, which range from EUR 1,304 for the smallest tonnage band up to EUR 33,699 for individual submissions above 1,000 tonnes. Reduced fees for SMEs are expected.
• EU registrants taking over the registration burden by establishing an OR in the UK: EU manufacturers exporting to the UK may choose to appoint a UK-based OR to take on UK REACH obligations. Again, this would be classed as a new substance registration and full registration duties (e.g. a full data package submitted on registration) and the appropriate registration fee would apply.

As it may take time to implement any necessary changes, we recommend businesses seek advice on the available options as soon as possible to avoid the potential risk of UK-registrations being void post-Brexit.

Footnotes

[1]For the purposes of this alert, references to transfers to EU-based entities includes references to entities based in the EEA.