ILMA Compoundings – November 2018 - 16

THE PREREGISTRATION REQUIREMENT AND RISK
The preregistration requirement itself is simple: A preregistration for each existing chemical substance (other than
those excluded as before) must be submitted during the window that begins Jan. 1, 2019, and ends June 30, 2019. The
data is basic information concerning the chemical substance
and its intended use(s). However, its impact is significant
and potentially perilous commercially. The peril is based
in part on the fact that any substance that is manufactured
or imported at 1 t/y or more without a preregistration file
during this window is market ineligible until a registration is
submitted and approved. The peril is also based on the fact
that there is, so far, no provision for the concept of a "late
preregistration," which was employed by European REACH.
Failing to file a preregistration during the window effectively closes the market in Korea for the given chemical
substance until it has been registered and approved. Further
complicating the matter is the fact that the prescribed
registration process contemplates sequential tonnage-based
registrations, from largest tonnage to lowest tonnage. This
naturally prioritizes high-volume chemicals with typically
large Lead Registrants and a large number of corresponding
Joint Registrants. However, this stratified approach multiplies
the impact of preregistration nonsubmitters (at least so far) by
potentially delaying their opportunity to immediately register.

Failing to file a preregistration during the window effectively closes the market in Korea for
the given chemical substance until it
has been registered and approved."
For example, a foreign exporter of a non-preregistered
chemical substance who wants to ship 50 t/y, a group two registrant, could be required to wait until Jan. 1, 2022, to submit
its registration, and then only if the foreign exporter is willing
to be the Lead Registrant. If the foreign exporter is unwilling
to be the Lead Registrant, or if a Lead Registrant has already
been appointed for that chemical substance, the foreign
exporter will be delayed further until the Lead Registrant has
submitted its registration dossier. For purposes of comparison, the vast majority of PEC Lead Registrants submitted
their dossiers within 60 days of the deadline, consuming the
entirety of the three-year period. If future Lead Registrations
track similarly, a failure to preregister could create a six-year
market gap, except for volumes below 1 t/y. If the foreign
exporter in this example wanted to ship 8 t/y, a group three
registrant, the market gap could be as much as 11 years.

NOVEMBER 2018

| COMPOUNDINGS | ILMA.ORG

A change in the rules, or in their interpretation, that would
allow non-preregistered substances to be registered at any
time prior to their deadline, regardless of applicable tonnage
band, would be an unlikely remedy. Since registrations require
a Lead Registrant, any party desiring to be a Joint Registrant
must await the appointment of the Lead Registrant and
submit simultaneously with or subsequent to the Lead Registrant's submittal. Circumstances that would motivate a party
to be the Lead Registrant, in order to facilitate earlier registration, are rare and unlikely. As in Europe, Lead Registrants
in Korea assume primary responsibility for data acquisition
and development to support their registrations, as well as
associated joint registrations. This places a significant upfront
financial burden on the Lead Registrant, even though it will
be diluted over time by contributions of Joint Registrants.
ONLY REPRESENTATIVES REQUIRED
As with registrations, preregistrations require the use of an
Only Representative (OR). There is likely to be a growing
number of ORs to support this new existing-chemicals
registration process, but employ adequate due diligence in
the selection process. Most of the current ORs are relatively
small and can be overwhelmed. Also, be aware that errors
and omissions/professional liability insurance is not available
in Korea. As might be expected, a language barrier is commonly experienced. Emphasis on care and attention to detail
in the selection process cannot be overemphasized.
PREREGISTER EARLY AND PROACTIVELY
Korea has a very limited number of experienced ORs, and
newer entries might require additional time to become
acclimated. Based upon the common experience with the PEC
registrations that were submitted earlier this year, a deluge of
preregistrations will be likely to ensue during the last 60 days
of the window. Preregistrations prepared during this period will
have a meaningful chance of missing the deadline due to the
volume concentration at that time. Readers are strongly recommended to complete preregistrations prior to May 1, 2019.
Exporters who currently ship less than 1 t/y of one or
more chemical substances to Korea should avoid the temptation to defer on preregistration. Those who see themselves in
this category should carefully consider the time span of the
market gap this could create. While there is a cost associated with preregistration, it is negligible compared to the
commercial pre-emption a gap might cause. Given this risk,
companies should include future plans in their preregistration decisions.
Eggenschwiler, an ILMA consultant, is an international
trade attorney and director of global trade for the
Redstone Group LLC. He can be reached at 614-9237472 or jeggenschwiler@redstonegrp.com.

http://www.ILMA.ORG

ILMA Compoundings – November 2018

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