Article

Brexit: A View From Within

Posted on: September 11, 2018

by Amy Lawrence, PhD, & Mads Realmuto. 

On 29th March 2019, the UK will leave the European Union (EU), with an anticipated 21 month transition period through to December 2021. After months of negotiation and months of seemingly little tangible progress, things are looking more dire than ever for businesses in the UK.

The chances of a “hard Brexit” or no-deal situation increase with every day that passes – due in part to political disagreements, but also due to the sheer volume and complexity of rules governing the UK’s relationship with the EU. The EU-Japan trade agreement – a negotiation far more limited in scope than Brexit – was only signed less than two month ago. It was first initiated back in 2013.

The UK and EU have stepped up meetings and negotiations in an effort to deliver a final agreement this Autumn, possibly coinciding with the EU summit on the 18th and 19th October. After this point, the deal should be well documented, leaving enough time for it to be approved by the relevant parties in the EU and the UK’s House of Commons before March 2019.

At present, there really is very little to be said on Brexit, even though it dominates the newspapers, the 10 o’clock news and the radio – daily.

The recent White Paper issued in July by the UK government discussed the desire for frictionless trade, and with that a free trade area for goods. However, this remains a major challenge, and may be impossible to achieve if the government remains committed to its stated requirements for leaving the customs union, and therefore no longer being subject to the European Courts of Justice (ECJ). These incompatible positions – coupled with the significant and powerful political disagreement on both sides – limit the ability to accurately clarify the status of Brexit.

What can be said, however, is a little on certain topics such as the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), and the European Chemicals Agency (ECHA).

REACH

At its heart, REACH is an all-encompassing piece of legislation, ensuring the protection of human health and the environment, and enabling the free movement of substances, mixtures and articles, all while covering the full life cycle of chemical-based products. While both British and European industry agree that there is little desire for the UK to diverge from the EU’s implementation of REACH post-Brexit, there are some significant stumbling blocks between now and the addition of a “UK-REACH” legislation.

The European Union (Withdrawal) Act 2018 passed through both houses with completion on 20th June 2018. This repeals the European Communities Act 1972, and allows directly applicable, already existing EU laws to be transposed into UK law (i.e. EU Regulations), as well as preserving all laws which have been created in the UK to implement EU Directives.

However, the Act has been deemed by some to be deficient in many areas, as regulations like REACH are just too interlaced with the various institutions of Europe, such as ECHA and the ECJ.

ECHA

ECHA has updated its website with information and FAQs that assume a hard (or no-deal) Brexit, for example, in relation to what the Regulations say when a country becomes a “third country”, REACH does allow “third countries” to participate in the work of ECHA, although this is at the discretion of the European Commission and the Agency themselves to decide.

Prime Minister Theresa May and the government have – generally – made it very clear that they want to remain members of the Agency and participate in conversations and discussions that go on in Helsinki. However, this only represents the view of the UK and is therefore just another “pawn on the chessboard”.

The UK is currently preparing IT systems and databases to replace ECHA’s Reach-IT database in the event that access to the latter is not included in the Brexit deal. Funding was granted for this in the Winter and access to this system will be required on 30th March 2019 (deal-dependent). This project may become null and void if it is decided that the UK is in fact able to use ECHA’s systems and contribute to EU’s REACH Regulation, and the Government has made it clear that this would be their desired approach.

Chemical Substance Registrations

In a recent and ongoing inquiry surrounding the REACH Regulation and its future post-Brexit, Dr Thérèse Coffey MP, Under-Secretary of State for the Environment, said that the government would like to see UK businesses continue to make direct Registrations under REACH, as opposed to working through an EU-based representative. Unfortunately, this remains a matter for negotiation between the UK and EU, and even if the UK’s position is accepted, the news will come too late as many UK companies are already undergoing the process to move registrations and authorisations over to EU-based Only Representatives and their EU-based counterparts.

In the event of a no-deal, the UK will need to establish its own ECHA-equivalent. ECHA has a huge knowledge-base spread across its members and participants, and using this base generally facilitates extremely well-informed decisions using the most up-to-date scientific knowledge. The UK will need to replicate this set up locally, and while it is true that ECHA currently relies heavily on the UK’s technical and scientific expertise, it is unclear whether the UK on its own will have the resource to make the same informed decisions.

Brexit & The Future Of REACH

In terms of REACH and its transition into UK law, it looks as though the draft Statutory Instrument (SI) may be subject to parliamentary scrutiny in November 2018, but it will need to be ready for publication by March 2019. This will also need to be completed with the devolved administrations, to ensure consistency within the UK.

The draft is being authored based on an assumption that there is no deal with the EU. If there is some kind of deal – perhaps with an implementation period – EU’s REACH will largely stay in force during the implementation period and another SI will need drafting based on the terms of the deal and any other deals made within that transition period.

As the old saying goes, only time will tell. But for both the UK and the EU, that time is beginning to run out.

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Useful Information

European Union (Withdrawal) Act 2018, 2018 c. 16

Details on the European Union (Withdrawal Agreement) Bill 2017-19

House of Lords Select Committee on the European Union – Energy and Environment Sub-Committee, The Future of REACH regulations post-Brexit, Oral evidence, 18th July 2018

House of Commons Environmental Audit Committee, The Future of Chemicals Regulation after the EU Referendum

Chequers Statement from HM Government, 6th July 2018

Keywords

Brexit, EU, European Union, ECHA, REACH Regulation, hard Brexit, no-deal Brexit, European Court of Justice (ECJ), European Commission


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