ILMA Compoundings - May 2021 - 15

represent a small fraction of the manufactured substances
facing regulatory exposure.
The EU market has functioned with very similar fluidity
since its formation. Manufacturers and distributors have
not needed to track the potential downstream distribution
dynamics of their products. Once product ingredients are
qualified for the EU market, the supply chain dynamics
flow relatively unencumbered - except for member state
or local laws that are analogous to U.S. state laws like California Prop 65. Compliance with EU REACH has been
the main potential impediment, and once compliance is
established (and maintained), its commercial impact fades.
The EU market functions essentially without borders.
Brexit has disrupted that in ways that many players previously contemplated. With dynamics similar to the impact
that would occur if a U.S. state adopted its own TSCA-like
law that added a market eligibility requirement in competition with TSCA, EU manufacturers and distributors
face a labyrinth of scenarios that challenge their ability to
assure compliance with the new U.K. REACH requirements
after the grandfathering period ends. The opacity of trade
between U.K. companies and EU companies is now very
real, and so is the opportunity for U.K. REACH noncompliant shipments.
URGENT REEVALUATION NEEDED
The motivation for U.S. manufacturers to comply with
U.K. REACH is becoming acute. As was the consideration
with their election to self-register with EU REACH, U.S.
and other global manufacturers are finding self-registration
in the U.K. to be a more difficult evaluation than was
originally believed. One reason for this is that U.S. suppliers based prior thinking on direct sales (or their absence)
to entities in the U.K. There was no perceived need or
opportunity to track indirect sales to U.K. customers
by EU product manufacturers and distributors. Another
reason is that EU customers (product manufacturers and

their distributors) are now recognizing that the complexities of product distribution pose a risk of costly disruption
or penalty.
However, an opacity remains among downstream product
manufacturers and distributors concerning specific substances used in the formulations they make and sell into the
U.K. They are unaware of many substances included in their
purchased materials, due to upstream supplier confidentiality. Similarly, they remain reluctant to candidly reveal details
concerning their intended distribution to the U.K. The
consequence of these tendencies places increased pressure on
foreign substance manufacturers to proactively avoid decline
in EU sales by registering substances in the U.K. without
the hard numbers typically used for such decisions.
GRANDFATHERING
Companies that wish to preserve U.K. market eligibility
for substances registered in the EU must create an account
with U.K. REACH and submit a Downstream User Import
Notification (DUIN) based on an existing EU REACH
substance registration. This is required for substances per se
or in products or articles. This DUIN must be submitted by
Oct. 27 to qualify for grandfathering.
Company registration and submittal of a DUIN will
typically require assistance by an only representative in the
U.K. Several EU only representatives have opened and registered offices in the U.K., which enables a smooth and quick
company registration and DUIN submittal for customers
of those only representatives. Also, manufacturers that have
offices in the U.K. might qualify to submit the company
registration and DUIN through that entity or office.
Although this step imposes costs that might be unnecessary if the manufacturer ultimately chooses not to register
substances in the U.K., it offers a relatively inexpensive way
to preserve substance market eligibility in the U.K. until
the registration deadline, which can amount to an extension of up to six years, depending on the substance and
registration volume.
Eggenschwiler, an ILMA consultant, is an international
trade attorney and is principal consultant, global trade
and chemical regulation services, at the Redstone Group,
a Trinity Consultants company. He can be reached at
614-923-7472 or jeggenschwiler@redstonegrp.com.

ILMA Compoundings - May 2021

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