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Impact of Brexit on REACH Presenters

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Impact of Brexit on REACH Presenters 01.12.2016 | Webinar Impact of Brexit on REACH Presenters Riku Rinta-Jouppi Keven Harlow Partner, Head of Global Compliance Reachlaw Business Partner (UK & Ireland) Some technical advice for this webinar Let’s make this webinar interactive: 1. You are able to send questions to us using chat, please do that! We will answer your questions in Q & A, if possible. 2. Remaining questions you have been sending may be answered after the presentation by e-mail. 3. All questions – unless you claim them as confidential (“this is CBI”) - will be included in a separate Q&A document, which you can order from [email protected] 4. In case you want us to contact you after the webinar for Q&A, please send an e-mail to [email protected] AND IN ANY CASE PLEASE SEND US FEEDBACK, THANK YOU! 3 REACHLaw in brief What we do? We provide global regulatory compliance and environmental sustainability services to ensure market access and operational sustainability for global businesses KEY FACTS ABOUT US SERVICE AREAS OUR CLIENTS Established in Helsinki Global chemicals regulatory More than 300 customers Offices in Brussels, New compliance, e.g. from 40+ countries, from Delhi and Istanbul Fortune 100 companies to 30+ toxicologists, chemists, REACH CLP SMEs. lawyers, socio-econ. Turkish Major industries served: analysts, business and Biocides Compliance Oil, chemicals, specialty environmental specialists K-REACH China REACH chemicals, metals, 20+ local partners in space sector and other Europe, Asia, Latin-America We prepare the required downstream users (DU) and the USA dossiers to authorities, industries, etc. 350+ REACH registrations by SDSs, labels and provide Our customers are 2010 deadline, 5% /all OR related business strategy, manufacturers, importers, Language support in legal and monitoring traders, DU´s, industry 10+ different languages support. associations and eSpheres investor Provide Outsourcing governmental More info about Us at: solutions for chemical organizations. www.reachlaw.fi compliance management Supply chain compliance management tools: www.compliantsuppliers.com Disclaimer AGENDA 1. Brexit- Background and key negotiation points 2. REACH options on the table for the UK 3. REACH status of UK companies after Brexit 4. Implications for Only Representatives 5. Conclusions 6 Understanding Brexit Realities • Brexit will be an extended transitional process, not a single event • Certain ‘Hard’ Brexit options involve substantially more costs than others • No cake, terms upon exit will not be better than as member as no substantial value created for either party from the separation • There will be a “loss of rights” upon exit for the EU rights that cannot be converted into UK national law High Court Decision: Parliament to Vote on A50, Judgment Includes Analysis of “Loss of Rights” 03/11/2016 Judgment R Miller v. Secretary of State for Exiting the EU: Categories of rights arising under the European Communities Act 1972 and EU law (and now to be subject to Brexit negotiations): Category 1: Rights capable of replication in UK domestic law (eg. Working Time Directive, but without right of reference to EU courts) Category 2: Rights enjoyed in other member states of the EU (eg. free movement of persons, capital, goods and services, right of establishment) Category 3: Rights that could not be replicated in UK domestic law (eg. rights of reference and participation as member of “EU club”) Long Summer After Referendum: impact limited, but uncertainty & difficult trade-offs anticipated “a trade-off between securing a deal as quickly as possible to reduce uncertainty in the short term, and securing the best possible deal for the U.K. to minimize the economic costs of exit over the long term.” UK Treasury ”There are actually two negotiations. First you exit and then you negotiate the new relationship, whatever that is.” C.Malmstrom, EU Trade Commissioner Exit timetable is still uncertain, FTA negotiations can only start upon agreement on terms of exit • The clock only starts ticking when Article 50 TEU notice is given • Exit upon entry into force of Withdrawal Agreement or 2 years from notification • Now the High Court judgment not to allow launching Article 50 process without full debate and vote by the parliament will be appealed by the government, further delay before A50 process • On the other hand, the exit process can’t wait forever as further delay creates significant uncertainty • No agreement on Free Trade Agreement (FTA) with the EU legally necessary for exit from the EU, therefore it is possible that a there is a period during which trading takes place under WTO rules UK Political Process and Positions So Far, 2-5 October, Birmingham Tory Party Conference “Article Fifty – triggered no later than the end of March [2017].” “A Great Repeal Bill to get rid of the European Communities Act – introduced in the next Parliamentary session.” “Our laws made not in Brussels but in Westminster.” “Our judges sitting not in Luxembourg but in courts across the land.” “The authority of EU law in this country ended forever.” “Let’s state one thing loud and clear: we are not leaving the European Union only to give up control of immigration all over again and we are not leaving only to return to the jurisdiction of the European Court of Justice. That’s not going to happen.” PM Theresa May UK Unofficial “Red Lines” (No Compromise), 2-5 October, Birmingham Tory Party Conference “No contribution to the [EU] budget” “No jurisdiction of the European Court of Justice” “The end of Free Movement” “British laws made in our sovereign parliament” Stewart Jackson, aide to David Davis, Secretary of State for Exiting the European Union Hardening Rhetoric: Limitations, Costs & Blocks Next steps: UK’s model for future relationship • The new prime minister needs to agree and present a model for relationship that the UK is seeking with the EU in the future HM Government: Alternatives to membership: possible models for the United Kingdom outside the European Union, March 2016 Next steps: Different groupings available HM Treasury analysis: the long-term economic impact of EU membership and the alternatives, April 2016 Next steps: EU sets the scene for two sets of negotiations • Full rights and obligations apply to the UK as EU member until exit • Withdrawal to take place in an orderly fashion, Article 50 to be activated as quickly as possible • No negotiations of any kind before Article 50 notification • ”Any agreement, which will be concluded with the UK as a third country, will have to be based on a balance of rights and obligations. Access to the Single Market requires acceptance of all four freedoms”, EU Summit Statement, 27th June 2016 • FTA with the EU comes at the back of the queue: ”Britain will not be able to start talks on a new trade arrangement with the EU until other aspects of its exit have been settled”, Cecilia Malmstrom, trade commissioner, 1st July 2016 • Australia: EU takes priority, formal FTA negotiations with UK can start in about 2,5 years after exit from EU is complete Negotiators and contact persons are appointed Jean-Claude Juncker Didier Seeuws Guy Verhofstadt Andreas Herdina President Head Brexit Taskforce Chief negotiator ECHA European Commission European Council EP contact person Managing the UK-EU relationship via bilateral agreements? Switzerland has more than 120 AGENDA 1. Brexit- Background and key negotiation points 2. REACH options on the table for the UK 3. REACH status of UK companies after Brexit 4. Implications for Only Representatives 5. Conclusions 19 EEA Scenario: Still viable to stay as OR in the UK? • Still-in-REACH Scenario - EEA – Very few only representative registrations from Norway, Iceland or Liechtenstein compared to 2249 from the UK (relative position 1.) EEA State No of OR Regs Percentage of Relative position 31.12.2015 total Norway 10 0.10 25. Liechtenstein 1 0.01 29. Iceland 0 0 30. ECHA REACH Registration Statistics by Country, 31.12.2015 AGENDA 1. Brexit- Background and key negotiation points 2. REACH options on the table for the UK 3. REACH status of UK companies after Brexit 4. Implications for Only Representatives 5. Conclusions 21 What will happen with UK companies and subsidiaries in UK and their REACH compliance? • Two main scenarios • Hard or Clean Brexit – WTO rules – NO TRADE DEAL IN 2 YRS – If no FTA in place after 2 year deadline after Article 50 notice given – Orderly exit from the EU but nothing to replace it with – Interim arrangements? Only available option would be to join EEA • Soft Brexit – Negotiated agreement – Continued access to EU Single Market - EU law still applies - Budget Contributions etc. – REACH still in force in some form? Brexit risk analysis for subsidiary acting as OR EU - customers 7. Independent Your OR / New counterparts EU – supplier importers 4. 1c.subsidiary ECHA, SIEF, Substance A Consortia.... 6. 5. EU Non-EU Scope: topics to be covered 1b. 1a. Appointing Parties, substances, legal entities Independent 3. Your company 1b. Appointment Process Non - EU Your(Group) company Manufacturer Group 1c. Appointed Party (OR) 1a. 2. Independent non-EU suppliers 3. Indirect export 4. Independent EU importers Non-EU 5. Potential EU suppliers, reimport suppliersNon-EU 6. New ”REACH counterparts/liabilities/risks” 2. suppliers 7. New liabilities against your customers Purpose of Brexit Risk Analysis • To understand the legal basis for OR operation in different Member States • Identify all relevant relationships, liabilities and risks involved with Brexit • To find ways to manage risks, so that the probability for future losses due to Brexit will be as low as possible • Action plan for management Structure of Brexit Risk Analysis: Gap Year(s) from REACH for the UK? 1. Identification of relationships and liabilities of OR 1. Identification of relationships and liabilities of OR 1.
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