The risk of no-deal Brexit has provoked greater than 60 chemical companies to shift the regulatory approvals from the UK to the EU.
The companies functioning in the UK, have applied to use the European Union regulators for the serious authorizations to safeguard their ability to do business lawfully.
As per the data offered to Guardian by the European Commission, the recent authorizations will become insignificant if there is no presence of transition arrangement.
Rentokil Initial, the FTSE 100 company whose services involve cleaning and pest control, is one of the biggest companies that has moved the registrations missing from the UK, in a move that will permit continuing to hold the dangerous chemicals in EU if there is no-deal Brexit.
The outlook of no-deal Brexit creeps up to turn over many of the complex regulatory systems where European and UK companies operate. Companies in the most firmly regulated sectors, involving the aerospace and automotive industries and those that can operate chemicals are chiefly at the threat of being incapable of doing business if there is an absence of a deal.
A German chemicals distribution company, Brenntag has changed the approvals from the UK, Brenntag, believed that huge multinational companies with the supply chains stirring the UK are at threat of a “rise in the transaction costs” because of Brexit.
The company claimed that “The cost of companies affected by Brexit piles up along diverse dimensions: physical
[longer delivery times]
, administrative/financial [customs duties, paperwork] and regulatory burden.”
Recently, the Chemical Industries Association, a British lobby group, claimed that no-deal Brexit will be “an economic price that is too high to pay”, hampering one of the UK’s biggest industries of export. It will also disturb the supply chains for the world’s biggest companies.
Britain’s chemicals industry makes up greater than 8% of the manufacturing sector, distributes two-thirds of production, with around 50% of exports going to be EU. Production of chemical is focused in four main clusters all over the Grangemouth, Runcorn, Teesside and Hull in Scotland.
The biggest privately held US company, Cargill, by revenues has made preparations to take the steps immediately or during the transition period” to protect its regulatory approvals.
GE-owned Baker Hughes claimed that it was working on the regulatory options, but refused to comment on the steps been taken. The US-based SC Johnson, creator of Mr. Muscle, refused to comment on the regulatory relationships details, where it is said that the products will be present in UK “whatever Brexit scenario approximately unfolds”.
A migration of chemical companies can also add to pressure on the Health and Safety Executive that is under the pressure in making 20% of spending cuts under the government’s severe plans.
On the other hand, in the no-deal scenario the HSE will take most of the accountabilities approved by EU’s European Chemicals Agency (ECHA), denoting the workload can equally surge if companies were enforced to apply to UK and EU regulators similarly. An expert of British chemicals industry told Guardian that extra work was initiated by the exodus of firms from EU was probable to create “a substantial challenge” for the EU27 authorities to engross. The HSE was earlier seen by the industry as one of the more accomplished regulators in EU.