ILMA Compoundings August 2016 - 38

LEGAL EASE

Preparing for Brexit
Jeffrey L. Leiter

ince the June 23 referendum in
favor of the United Kingdom
leaving the European Union
(otherwise known as Brexit), I have
read numerous commentaries on how,
when and whether Brexit will occur.
Clearly, the full impact of the decision
by U.K. voters will depend largely on
the outcome of exit negotiations -
which are estimated to take two years
- between the U.K. and the EU under
Article 50 of the Treaty on European Union.
Because of the uncertainties stemming from Brexit, it is
necessary for ILMA members actively doing business in the
EU and the U.K. to develop both commercial and regulatory
strategies to deal with the U.K.'s planned departure. At a
minimum, current contractual arrangements for ensuring
compliance with specific EU chemicals law obligations will
have to be amended, because it is unlikely that U.K.-based
companies will be able to continue to provide EU regulatory
compliance solutions.
In developing commercial and regulatory strategies, ILMA
members doing business in the U.K. and EU need to consider
whether the U.K. ultimately will leave the EU and, if so, whether
it negotiates (a) membership in the European Economic Area
(EEA) (similar to Norway and Iceland); (b) a bilateral agreement
with the EU; or whether it (c) relies on rights under the World
Trade Organization.
From a chemicals management standpoint, I see three items
initially affected by Brexit for ILMA members. First, will the EU's
chemicals management rules remain applicable in the U.K.?
Second, will U.K.-based companies be able to continue to act
as "only representatives" for purposes of REACH compliance?
Third, what will be the future role of the U.K. competent
authorities?

I expect that the EU's REACH, biocides and pesticides rules
and CLP directive will remain binding for products imported
into the U.K. during the exit negotiations. However, because
overregulation by the EU was one of the criticisms leveled by
the "leave" campaign, some aspects of the current EU rules
could be modified.
To the extent that ILMA members sell products into the EU
through U.K.-based distributors, many of them rely on these
U.K. companies to ensure compliance with the EU chemicals
laws. If the U.K. will not be part of the EEA, then these U.K.based companies will need to appoint an "only representative"
in the EEA to ensure compliance of exports (or leave the
compliance obligations with individual EU importers). It may
be appropriate to consider whether to make a defensive switch
now to an "only representative" not established in the U.K..
Under the Biocidal Products Directive, the European Chemicals
Agency (ECHA) has put in place a system of representatives
for non-EU companies who are included in the Article 95 list of
substances and suppliers. U.K.-based Article 95 representatives
would probably also have to be replaced after the U.K. is no
longer a part of the EU.
The U.K. currently acts as an evaluating member state authority
under the EU chemicals laws, including for biocides and
substance evaluations under REACH. Where an evaluation by
the U.K. competent authority would not have been completed

Vol. 66 No. 8 * 38 * August 2016 Compoundings

ILMA Compoundings August 2016

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