ILMA Compoundings August 2016 - 38

LEGAL EASE Preparing for Brexit Jeffrey L. Leiter S 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

Table of Contents for the Digital Edition of ILMA Compoundings August 2016

FROM THE CEO
FROM THE PRESIDENT
BOARD BRIEF
NOTES FROM NLGI
THE HEART OF ILMA
In Memoriam Mike Ryterski (1920–2016)
Radco Industries Promotes Brian Finch
Manufacturing Day is Coming! October 7, 2016
THE EVOLUTION OF GROUP II
VOICES & VIEWS
INTERNATIONAL INSIGHT
FOCUS ON ETHICS
FAMILY BUSINESS
RULES & REGS
POWER PLAY
LEGAL EASE Preparing for Brexit
THE WHITE PAPER

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