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Brexit business continuity in the chemicals industry

A survey by Chemical Watch has found that almost half of the UK’s chemical firms are planning to create additional legal entities in the EU for business continuity purposes.

Split into different sections according to where respondents were located (UK, EU-27 and non-EU), the survey assumed that Brexit will happen and asked firms which outcome would give them the greatest confidence of maintaining business stability and growth.

Key findings included:

  • Two-thirds of respondents, did not think Brexit offers any opportunities to improve on the regulatory mechanisms of REACH. REACH is a European Union regulation concerning the Registration, Evaluation, Authorisation and restriction of Chemicals. It came into force on 1st June 2007 and replaced a number of regulations with a single system.
  • Of companies with REACH obligations, 58 percent expect business disruption as a result of UK registrations ceasing to be valid. Most still believe, however, that their registrations will still be recognised under future UK rules post-Brexit.
  • Nearly 90 percent of respondents saw a transition period as either business-critical or very important.
  • Most UK (58 percent) and EU-27 respondents (55 percent) were not yet actively moving operations out of the UK, but a third of UK-based respondents are actively planning or organizing to do so. 
  • Almost half (48.15 percent) of the UK firms surveyed were planning to create additional legal entities in the EU for business continuity or considering it. The most common reasons were: regulatory uncertainty (71 percent); tariff barriers (45 percent); economic uncertainty (40 percent); and additional chemical-specific regulatory red tape (34 percent). 

More details.



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