ILMA Compoundings - March 2021 - 32

IN NETWORK

Cross Connections
Brexit and Trade With the EU
By David Wright

T

he U.K. left the European Union (EU) on Jan. 31,
2020, but agreed to follow its rules during a transition period lasting until 11 p.m. on Dec. 31.
Negotiations between the U.K. and the trading bloc fell
into two parts. Initially, the U.K. entered into talks to negotiate a withdrawal settlement taking into account its future
liabilities in terms of EU budgetary spending commitments
and future pension contributions for U.K. staff working in
the European Commission. The second part centered on a
future free trade agreement, which was published on Dec. 24.
Under the free trade agreement, goods can pass between
the U.K. and EU free of tariff or quota, in an unencumbered manner. For lubricants, this means that EU-produced
base oil, additives and even finished goods can be placed on
the U.K. market without restriction, but they are subject to
other regulatory requirements.
The first requirement in any free trade agreement is
to meet the rules of origin. Any U.K.- or EU-originated
product must be produced in that country or region to
qualify. Products imported from outside and then exported
to each respective area in an unprocessed or unamended
form, which does not change the tariff heading, would not
be considered as originating from either place.
So, importing base oil from North America in bulk and
repackaging it into smaller quantities would not be considered as " sufficient processing " to change the origin of the
product. Although there is a tariff on imports of Group III
base oil, and up to 350,000 metric tons this year of Group
II base oil, it can still be imported into the EU free of tariff
under an existing temporary suspension.
The second requirement is to meet the necessary chemical regulations. The key regulation governing chemicals is
REACH. In negotiations, the U.K. refused to be bound by
the jurisdiction of the European Court of Justice, which is
the final arbiter in any EU REACH disputes, so the U.K.
established its own REACH regulatory system, which came
into effect on Jan. 1.
Under the Northern Ireland protocol in treating the
island of Ireland as a single entity, Northern Ireland will
continue to abide by EU REACH and notify the U.K.

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MARCH 2021

| COMPOUNDINGS | ILMA.ORG

regulator, the Health & Safety Executive, of chemicals it
places onto the U.K. market under the " unfettered access "
principle of the U.K.
U.K. REACH, as it affects England, Wales and Scotland,
operates in a similar way to EU REACH with the submission
of data dossiers made to register a chemical substance with a
U.K. authority, authorizations granted and any restrictions
imposed. There is a transfer period of between two, four or six
years from October 2021, depending on product classification and volume, to allow existing EU REACH authorization
holders to make a submission to the U.K. authority.
Enshrined within the U.K./EU free trade agreement was
an ongoing commitment to the Classification of Labelling
and Packaging (CLP) regulation. Unlike REACH, which
emanated from the EU, CLP is based on the United
Nations' General Harmonized System, or GHS, so the U.K.
is committed to continuing to abide by its own version of
CLP, covering England, Wales and Scotland, aside from
the negotiated free trade agreement. As is the case with
REACH, Northern Ireland will continue to abide by the
EU CLP regulation.
Unlike REACH, there is also no transition period for
U.K. importers of chemicals placed on the market under
Great Britain CLP, so labels will need to be compliant from
Jan. 1 with appropriate hazard classifications and the details
of the U.K.-based entity of any imported goods.
Other chemical regulations, including the Biocide
Product Regulation, or BPR, which requires biocides placed
on the market to be pre-authorized, and PIC, or Prior
Informed Consent, continue, as they have been adopted
into U.K. law from EU regulation.
The U.K. has set its sights on becoming a lower-regulation
and perhaps even lower-tax economy in the future. Despite
the free trade agreement, British goods passing across the EU
border will still be subject to an increase in customs checks
and documentation in a way they haven't for some 40 years.
Wright is director general of the United Kingdom
Lubricants Association.


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ILMA Compoundings - March 2021

Table of Contents for the Digital Edition of ILMA Compoundings - March 2021

ILMA Compoundings - March 2021 - Cover1
ILMA Compoundings - March 2021 - Cover2
ILMA Compoundings - March 2021 - 1
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