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Industry needs to prepare for no-deal Brexit – Germany’s VCI


Chemicals trading between the UK and the EU could come to a “complete standstill” without a Brexit deal and it is “high time” for companies to prepare for this eventuality, the head of the German Chemical Industry Association (VCI) has warned.

The association represents around 1,700 German companies and units of foreign companies, accounting for 90% of the country’s chemicals industry.

Chief executive Utz Tillmann said an “uncontrolled” Brexit would have “direct and serious” consequences and that unilateral technical advice for those affected by the British government “does not solve this problem”.

The UK government is expected to publish no-deal EU withdrawal advice for the chemicals industry in early September.

The likelihood of negotiations failing is growing every day, he added. Without an agreement, or at least common transitional arrangements, customs payments and time-consuming procedures at the border could bring down numerous supply chains, with “suddenly missing registrations or approvals for chemical products from the UK,” he warned. Downstream users would also be “seriously affected”.

In May, the European Chemical Industry Council, Cefic, put forward the idea of allowing the transfer of UK REACH registrations to downstream users of those chemicals in the EU to ensure their continued use after Brexit.

In order to avert “chaotic conditions”, Dr Tillmann said it is necessary for politicians to take “suitable back-up” measures. He called on European leaders to work hard to achieve a negotiated outcome at the EU summit on 18-19 October. The meeting is widely regarded as a make-or-break moment for a Brexit deal.

Dr Tillmann said EU leaders must negotiate a “solution-oriented” deal as time is running out before the 29 March withdrawal date. The UK’s continued membership of Echa is “extremely important”, he added, and regulatory alignment of chemicals must be set out in the guidelines for a future relationship.

In July, the UK reiterated its desire for associate membership of Echa in a Brexit white paper that sets out the government’s vision for a future economic partnership with the EU.

However, preparations are underway at the UK’s Health and Safety Executive (HSE) for changes to the chemicals regulation division workforce in the event a trade deal is not negotiated.

Should this be the case, the HSE would take on most of the responsibilities currently carried out by Echa. These include parts of the plant protection products Regulation and REACH.

And the HSE recently said IT capability to enable the registration and regulation of chemical substances placed on the national market after Brexit is mostly built and “would work” tomorrow if needed.

Meanwhile, environmental groups have warned that a ‘no-deal’ Brexit could make the UK industry a dumping ground for chemicals banned in Europe.