Regulation Update

What is REACH?

The final registration deadline for the Registration, Evaluation, Authorisation and Restrictions of Chemicals (REACH) Regulation draws closer: 31 May 2018. REACH aims to protect human health and environmental standards across the EU by providing a framework for the collection and evaluation of vast data on chemical substances. By allowing ECHA (the authoritative EU agency for REACH) to “map the chemical universe”, potential risks and hazards caused by chemicals may be minimised. To this end, ECHA expects up to 60,000 registrations to be made for around 25,000 substances by the upcoming deadline.

Registration

31 May 2018 is the final phase-in deadline. Companies that import or manufacture between 1 to 100 tonnes of substances each year will now be required to register with ECHA. The 2018 deadline concludes the registration submission process meaning that ECHA will have collected dossiers from companies importing or manufacturing substances from 1 to over 1,000 tonnes in volume. Registration deadlines for higher tonnage bands in 2010 and 2013 catalysed action between LBMA, LPPM and EMPF to successfully lobby that Good Delivery gold bars should be considered as articles and therefore should be out of scope of the legislative requirements of REACH. LBMA is currently working closely with the UK Health & Safety Executive (HSE) to clarify the position of other gold products as well as platinum and palladium Good Delivery ingots and other products.

Evaluation

From the deadline, ECHA and the member states’ competent authorities will scrutinise the dossiers for sufficient information.

Authorisation

Following evaluation, ECHA may phase out substances identified as dangerous after analysing the benefits of phasing out the substance against its socio-economic value. All precious metals are registered as substances on the ECHA chemicals database in varying forms, such as grains and powders. To access the existing registrations, a Letter of Access can be purchased. A co-registration dossier can then be submitted via a REACH-IT account.

ECHA has issued guidance on REACH responsibilities within a chemicals supply chain. For example, distributors and storage providers of substances will have no registration requirements, but are responsible for providing REACH-related information upstream when necessary.

REACH and Brexit’s implications

As negotiations progress on the framework of future UK and EU interactions, any potential implications of Brexit on the precious metals industry may become clearer. For REACH, complexities arise when considering mutual recognition of registrations between the UK and the EU. From ‘exit day’ in March 2019, the Department for Environment, Food and Rural Affairs (DEFRA) intends to “lift and shift” REACH into UK legislation using the EU (Withdrawal) Bill toolkit. With a recently approved budget of £5.8m for developing a chemicals registration IT system, DEFRA has yet to confirm whether UK registrations would be recognised in the EU after March 2019.

The UK has announced its intention to break away from the jurisdiction of the European Court of Justice (ECJ). As the ECJ governs ECHA, how could mutual recognition work in practice where the UK does not take ECJ decisions into account? As ECHA’s remit on post-Brexit measures may be limited, the UK government has indicated that it will develop a new chemicals agency responsible for REACH (or its post-Brexit equivalent).

Such ‘political red lines’ do however give the UK government the opportunity to design a bespoke chemicals regulation for the UK industry. Whilst looking at alternative REACH equivalent regimes, the government will also actively engage with industry stakeholders for views on possible divergence. The government has made it clear that a future regulatory framework would cause no reduction in environmental standards.

DEFRA, the Department for Exiting the European Union (DExEU) and the Health and Safety Executive (HSE) are collaborating on a joint programme for EU exit and have signposted the March 2018 European Council meeting as important for providing a sense of post-Brexit direction.